AUSTAL will expand its defence shipbuilding capability in Western Australia after securing a $245 million loan from the federal government’s National Reconstruction Fund Corporation (NRFC), enabling construction of new advanced manufacturing facilities at the Australian Marine Complex in Henderson.
The funding, announced this week, will support Austal’s delivery of the Australian Army’s Landing Craft Heavy (LCH) program, a major $4 billion project to build eight 100‑metre vessels that will form the backbone of the Army’s future littoral manoeuvre capability.
Under the agreement, the Commonwealth is tocover all financing costs, allowing Austal to invest in new infrastructure without carrying the capital burden normally associated with large‑scale shipyard expansion.
NRFC chief executive David Gall said the investment would “embed vital sovereign naval assembly and quality assurance capabilities onshore", strengthening Australia’s long‑term defence industrial base.
The loan is tofund: new modular manufacturing lines; expanded assembly halls; upgraded launch and test facilities; and specialised infrastructure for large steel‑hulled vessels.
The upgrades will allow Austal to transition from its traditional aluminium shipbuilding focus to large‑scale steel naval construction, a capability the government has identified as strategically important under the Defence Strategic Review.
Austal chief executive Paddy Gregg said the investment would accelerate the company’s ability to deliver the LCH program and future defence projects.
“This support enables us to build the facilities we need to deliver complex steel vessels at scale,” he said. “It positions Henderson as a long‑term sovereign shipbuilding hub.”
The expansion is expected to create around 780 jobs across engineering, fabrication, project management and advanced manufacturing, with flow‑on benefits for WA’s defence supply chain.
The government says the investment will help retain skilled workers in the state’s naval shipbuilding sector, which faces increasing demand from Army, Navy and AUKUS‑related programs.
The NRFC loan follows a series of recent federal investments aimed at strengthening Australia’s defence industrial capacity, including: long‑lead funding for Army’s Landing Craft Medium program; expanded sustainment work at Henderson; and support for WA companies supplying components into AUKUS submarine programs.
The government says the Henderson precinct will play a central role in future maritime capability, including amphibious and littoral operations.
Austal’s Australian operations now include: the LCH program; the LCM program; patrol boat sustainment; steel manufacturing capability development; and export work supporting U.S. Navy and Coast Guard programs.
The company’s U.S. shipyard in Alabama is also undergoing expansion, supported by Export Finance Australia loans totalling US$250 million, enabling construction of new assembly facilities for Coast Guard cutters and Navy surveillance vessels.
Defence Industry Minister Pat Conroy said the NRFC investment would ensure Australia maintains the industrial capacity needed to deliver and sustain critical maritime assets.
“This is about building the sovereign capability required to keep Australians safe,” he said. “Austal’s expansion will support the Army’s future operations and strengthen our national resilience.”
Construction of the new Henderson facilities will begin in 2027, with the first Landing Craft Heavy scheduled for delivery in 2029.