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Defence,
ADI to sign
ammo deal
Australian Defence Indus
tries and the Dcfcnce Depart
ment will sign a long-awaited
defence ammunition contract
next week, providing the Aus
tralian Defence Forces with an
assured supply of ammunition
into the next century.
A spokesman for ADI said yes
terday the signing would coincide
with a ccremony marking the start
of construction of ADI's new am
munition plant at Benalla, northern
Victoria, next Friday.
No amount has yet been an
nounced for the contract, although
il is expected to be one of the largest
ever signed by defence. The con
tract will run for 20 years.
The new state-of-the-art ammu
nition factory will be built on the
1500-hectare Benalla site during the
next M years. It will employ up to
300 people.
The Government-owned ADI is
Australia's largest specialist defence
industry firm. It was formed in
,1989 to run the notoriously ineffi
cient production operations of the
Department of Defence.
ADI inherited seven factories in
volved in defence ammunition pro
duction. One of them at Footscray,
Victoria, dated back to the last cen
tury. All were geared towards out
put of ammunition at World War II
levels with gross over-capacity.
ADI said in its 1991 annual re
port that this over-capacity was a
"reflection of the strategic view of
. the world taken by previous govern
ments".
The finished product was regard
ed as top quality but was expensive
by world standards. Even ADI said
the cost of ammunition was unac
ceptably high and nothing short of a
major restructuring could get the
price down to an acceptable level.
Although Australia could buy its
ammunition overseas at a consider
able saving, Defence has always
taken the view that local production
is essential for self-reliance.
Even with the new factory, ADF
is unlikely to ever want enough am
munition to enable cheap produc
tion, although it is expected to be
much cheaper than at present.
ADI is closing three of its old
plants at St Mary's, NSW, and
Footscray and Maribyrnong, Victo
ria.
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