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Hi-tech welder on track to join defence industry

Business

An Adelaide manufacturer of hi-tech welding equipment is embarking on a joint project with a huge global player that it hopes will help it gain a foothold in the lucrative defence manufacturing sector.

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Mile End-based K-TIG Limited has commercialised CSIRO technology to weld materials faster and stronger than traditional techniques.

Until now, the publicly-listed company has focused on the pipe, tank and pressure vessel industries.

But this week, K-TIG signed a Memorandum of Understanding with major Korean company Hanwha Defence Group and Hanwha Defence Australia, to develop advanced keyhole welding procedures for armoured applications.

Hanwha is South Korea’s largest defence company and also operates in aerospace, fintech, mining and clean energy.

It is also the preferred supplier for the Australian Army’s Land 8116 self-propelled artillery project, and shortlisted for the Land400 Phase 3 Infantry Fighting Vehicle project.

The K-TIG system can perform a traditional six-hour weld in less than four minutes to a quality standard and unlike traditional welding it requires no edged preparation or filler materials.

K-TIG managing director Adrian Smith said the MOU with Hanwha would trigger a 24-week joint project to demonstrate the K-TIG technology in Adelaide on the specific defence materials at specific joint geometries to prove its “superior hardness characteristics”.

“Traditionally when you weld two pieces of armour together you change the mechanical properties because you melt the metal and recrystallise it around the joint and the joint is not as hard as the base metal,” he said.

“But our technology and the way we weld in a single pass involves much less degradation in the strength of the joint so our joint hardness is comparable to the base metals plus we have less defects.

A Hanwha k9 self-propelled howitzer. Picture: Hanwha Defence

“Once we’ve proven the suitability then we will look at building it into their manufacturing processes for 8116 and the Land400 vehicles they are bidding for.

“If it’s successful on this project, they have manufacturing lines for these guns and the Land400 vehicles they are bidding for.”

Hanwha will offer 30 of its K9 Huntsman self-propelled howitzers in the first phase of the 8116 Protected Mobile Fires project. It will build and assemble the vehicles in Geelong with a budget estimated at up to $2.6 billion.

Smith said if the K-TIG welding technique proved successful, Hanwha would look to incorporate it into its global operations.

“That’s the real significance of it and also, once we’ve got some established in-service vehicles using this technology, there’s all the other armour vehicle manufacturers worldwide because the economic and quality benefits will translate into all the other vehicles – it’s a change of technology for everybody potentially.”

The welding technology was initially developed in Adelaide more than a decade ago by the CSIRO, before K-TIG was spun out to commercialise it.

K-TIG listed on the Australian Securities Exchange in October 2019 following a $7 million capital raise. It embarked on a further $6 million capital raise late last year.

The company also established a North American sales and distribution network last year, which is beginning to pay dividends, and has also established a formal R&D group in Adelaide.

K-TIG has 12 staff in Adelaide where the welders are assembled from locally manufactured and imported parts before being shipped to customers around the world.

K-TIG managing director Adrian Smith (left) and Hanwha Defence Australia’s Richard Cho at the MOU signing this week.

The company is looking to expand to 14 SA staff in the coming weeks ahead of further growth.

Smith said having a physical presence in America had helped K-TIG move its customer base from early adopters to mainstream users.

“Now we’ve got 50-60 customers out there who are very happy with it and know that it works and we’re seeing scale growth because it’s an established technology,” he said.

“It’s early days – we’re only six months into it – but it’s going great guns and we’re seeing really rapid growth in the number of companies wanting to engage with us because we’re now local in America.

“We’re looking at 300-400 per cent revenue growth this year so we’re pretty happy with that.”

K-TIG Limited has a market capitalisation of $81.8 million. Its shares opened at $0.49 on the ASX this morning.

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