Quickstep Signs JSF Composite Parts Manufacturing Deal Worth $580m

4 Feb 11

Australian advanced materials company Quickstep Holdings Limited has signed a Long Term Agreement (LTA) to manufacture $580 million worth of parts for the international F-35 Joint Strike Fighter (JSF) program over the next 20 years.

Under the framework established in the LTA, first JSF parts and first cash flow will be delivered in 2012.
The LTA was signed today in Sydney, Australia, with Northrop Grumman Corporation Los Angeles, a leading global security company.

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Under the MOU, Quickstep will supply up to 16 different JSF components, including lower side skins, maintenance access panels, fuel tank covers, lower skins and in-board weapons bay doors, projected to amount to some 36,000+ parts over the life of the program and could generate annual turnover of around $50 million by 2015. The total value of the work over the life of the aircraft could be up to $700M.

With this large-scale manufacturing agreement now in place, Quickstep also today announced plans to establish a major new aerospace manufacturing facility at Bankstown Airport in south-west Sydney, signing a 10-year lease over 4,200sqm of buildings that were previously used by US aerospace giant Boeing, in a move that will secure the Company’s long-term aerospace manufacturing capabilities.

Quickstep Chief Executive, Philippe Odouard, said it was an historic day for the Company, marking the culmination of many years of hard work in promoting Quickstep’s aerospace manufacturing capabilities and demonstrating its ability to meet the high standards required under the JSF program requirements.

“The signing of this LTA signals a genuine quantum shift in Quickstep’s development. The international defence industry has perhaps one of the highest barriers to entry of any industry in the world, but, for companies that are successful, the contracts are generally large scale and long term. Quickstep has now earned its place as a supplier for JSF, and we hope many additional aerospace and defence contracts will soon follow,” Odouard said.

“In addition, our success in securing specific sections of Boeing’s former manufacturing site in Sydney will provide Quickstep with a long-term lease over a manufacturing facility that offers the scale, resources and utilities necessary to undertake large-scale aerospace and defence manufacturing.

“The facility at Bankstown Airport was previously a substantial aerospace manufacturing facility with a workforce with aerospace industry skill-sets in place. This represents an absolutely outstanding opportunity for Quickstep to lock-in the manufacturing capacity required for the delivery of first JSF parts in 2012 and support further contracts as they are secured.”

The Lockheed Martin F-35 Lightning JSF is an advanced stealth multi-role combat aircraft that will be the mainstay of US and allied air forces to around mid-century.

Australia will acquire up to 100 aircraft, with the first entering service in 2018.

The $16 billion bill makes it Australia's most expensive equipment acquisition.

Defence Materiel Minister Jason Clare said the deal would probably inject more than half a billion dollars into the Australian economy and lead to the creation of up to 400 jobs.

He said $10 million in assistance from the federal government had helped lure Quickstep to Bankstown.

Quickstep is a Perth-based firm that specialises in advanced materials manufacturing for the global aerospace and defence industries.

After the announcement on Wednesday, Quickstep shares rose from 42 cents, where they traded last before entering a trading halt on Monday, to 55.5 cents.

At 1246 AEDT, Quickstep shares had eased to 46 cents, up 8.2 per cent.

"That's terrific news for Bankstown. Around 3000 of these planes are expected to be built over the next 20 years and Quickstep plans to build parts for many of them," he said in a statement.

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