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As DroneShield (ASX: DRO) has been clocking up major contracts on almost a weekly basis recently, the fast-growing Australian defence technology company has announced a $13 million investment towards expanding its manufacturing and R&D capability.
The company has made a multi-year lease and fitout commitment into a brand new 3,000sqm production facility in Sydney’s Alexandria which is expected to open in December this year, and will also add 2,500sqm of R&D area to its headquarters.
DroneShield reports the expansion will lift its own annual production capacity to $900 million in estimated value by mid-2026, with a combined manufacturing capacity to $2.4 billion by the end of 2026.
This aligns with a $2.34 billion global sales pipeline that DroneShield is targeting, including in its fastest-growing export market Europe where the group received the largest single order in its history late last month valued at $61.6 million.
The European order was soon followed by a $9.7 million Latin American contract and an $11.7 million Five-Eyes R&D contract.
The latest $13 million investment relates to five years of the initial lease commitment as well as the fit-out cost for its expanded R&D area, and the new production facility.
DroneShield clarifies that as it engages with third party supply chain, substantially Australian, there is no requirement for heavy machinery and similar capital expenditure investment.
The new facility, including advanced in-house production, testing and warehousing capabilities is DroneShield’s largest to date and more than three times the size of its current production assembly floor near central Sydney.
The existing production assembly floor will be converted into an additional R&D area for the Company, resulting in a 5,530sqm total R&D area.
"In response to rising threats and multiple wars taking place across the globe, Australia’s allies are increasing investment in modern defence capabilities," says DroneShield CEO Oleg Vornik.
"We are stepping up to meet this demand by investing in state-of-the-art facilities here and abroad, and in sovereign Australian skills development to provide the most modern and effective counter-drone capabilities in the world.
"Our new facility in Alexandria will epitomise the value Australian engineering can bring to a changing geopolitical landscape."
In 2024, exports accounted for 91 per cent of DroneShield’s existing facilities, proving them a vital example of the broader manufacturing capabilities Australia can deliver as part of its Future Made in Australia (FMIA) plan.
The changing landscape and rising threats have increased younger generations’ interest in working in Australia’s defence industry, according to Vornik.
"Interest in working in defence had been declining over decades of peace," Vornik says.
"But we are seeing a rise in national pride as tyrants attempt to change the world order, and that’s translating to an uptick in younger staff seeking opportunities and adding real and timely value to Australia’s defence efforts."
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