Cash flow can be a challenge on defence contracts, says SME

Penguin Composites, a north-west Tasmanian company supplying vehicle sets for Hawkei light protected vehicles, has said more could be done to help smaller companies awarded defence contracts.

Local paper The Advocate reports general manager Adrian Polden saying there was a lag between costs and revenues when tooling up to supply defence projects, and better support from a line of credit would help.

“We’ve been supported well, but we’ve also had to rely on, basically, personally finance,” Polden told The Advocate.

“If we’re really interested in getting more work into the smaller centres and the regional centres, it’s got to be supported by [a] line of credit.”

Penguin was awarded work supplying bonnets and other components to Thales in 2017, replacing Quickstep Holdings. It has since grown its headcount from 30 to 60.

The company began in 1976 making kayaks and canoes, and is now a diversified supplier of composite and metal products including recreational vehicles, power poles, igloos and parts for infrastructure. 

Opposition defence minister Brendan O’Connor visited their site recently, saying it was important to better support businesses winning defence work, and that the contract process needed to be made easier.

Picture: Defence/Hawkei in Iraq

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