Defence partnering for success – REDARC, SMEs partnering with SMEs

@AuManufacturing’s sponsored series reporting on BAE Systems Australia’s Partnering for success defence industry supplier event, turns to a different type of partnership – that between SMEs themselves vying for defence contracts. Here is REDARC Electronics’ partnering story.

It is not only defence prime contractors partnering with defence SMEs that is powering the defence sector today, but SMEs partnering with each other to multiply their joint technologies and capabilities.

Adelaide-based REDARC Electronics, best known for its rugged vehicle electronics, is one that has used partnering to grow occasional business with defence customers into long term contracts that are taking it to new levels of capability and into highly competitive export markets.

CEO and Owner Anthony Kittel (pictured, below) was looking to increase his defence focus through just such a synergistic partnership during a visit to London in 2017, happening upon electronic lighting design company MARL International.

MARL, with only 50 employees far smaller than REDARC with its 385 staff, was looking for an Australian partner to deliver on its contracts to supply internal lighting for the nine Hunter class frigates being built by BAE Systems Australia for the RAN.

Kittel said REDARC had ambitions not to become a Tier 1 supplier to defence, but to become a very capable Tier 2 supplier during the London visit.

“It became a bit of a dating exercise.

“Over time we built up a bit of a rapport, we had similar values and similar philosophies of business, and that helped us get on well together.”

Kittel said building the relationship was the key, and that takes time and a willingness to be totally open and honest with prospective partners – too many partnerships have gone sour if one SME suspects the other is not being completely frank.

“Things only started to get really serious during 2020…and in 2021 we signed a tendering agreement.

“There is always jockeying about how profit is going to be shared (in such a relationship) and how risk is going to be shared.”

Eventually the partners agreed that REDARC would be prime contractor in the relationship in Australia, with MARL doing a full transfer of technology to Australia, and REDARC also taking up an Asia Pacific representative role for the UK company.

Said Kittel: “Of course there has got to be something in it for each partner, but again, you have to be clear and honest with each other if it is to work.”

REDARC is to supply the internal lighting for the frigate fleeting – there are 79 lighting variants and more than 12,000 lights on each ship.

The company will complete prototypes of the first lights in Q4 of this year.

“Not everything will be made in Australia to start with, but as progress more of the product will be made locally.”

Pictures: REDARC/Lonsdale factory/Anthony Kittel

@AuManufacturing’s series Defence industry partnering for success is sponsored by defence sector prime contractor BAE Systems Australia.