The Federal Defence Department has entered negotiations with Thales Australia, under the banner Munitions Australia, for it to continue operating munitions factories in Benalla and Mulwala.
Federal Defence Industry Minister Christopher Pyne yesterday said the announcement would provide certainty for workers the factories would remain open long-term.
Mr Pyne stressed the importance of such factories to Australia’s defence force.
Employment at the Benalla and Mulwala sites increased by more than 80 employees last year under the existing contract, generating vital job opportunities in regional Victoria and NSW, Mr Pyne said.
‘‘The Thales Australia supply chain includes 130 local small-to-medium enterprises, providing a wide range of goods and services to the Benalla and Mulwala sites,’’ he said yesterday.
‘‘The negotiations with Thales will see a new strategic arrangement for the management and operation of the factories, improving price competitiveness and increasing export potential for Australian manufactured ammunition and explosive products.’’.
Mr Pyne said the ‘‘long-term, performance-based’’ arrangement would also provide a greater degree of certainty for Thales as the principal tenant and operator of the facilities.
‘‘Drawing on the depth of engineering and manufacturing skills resident in these factories, the decision to commence negotiations with Thales builds on the well-established relationship between Thales and defence,’’ he said.