Austal secures $100 million loan to expand US shipyard
Austal USA Secures $100 Million Loan for Shipyard Expansion
Austal USA has successfully secured a $100 million loan from Export Finance Australia (EFA) to enhance its shipyard operations in Mobile, Alabama. This funding will support the construction of a new facility aimed at increasing production capacity for large steel-hull vessels, crucial for fulfilling contracts with the U.S. Navy and Coast Guard. The loan underscores Austal’s commitment to expanding its capabilities and strengthening ties between the Australian and U.S. defense sectors.
Expansion Plans and Strategic Partnerships
The financing from EFA will facilitate the construction of Final Assembly 2 (FA2), a state-of-the-art manufacturing facility covering 192,000 square feet. Groundbreaking for FA2 took place in July 2024, with completion anticipated by summer 2026. This new facility is expected to significantly boost Austal’s production capacity, particularly for large vessels, as the company continues to fulfill its extensive order book valued at $13.1 billion.
Austal CEO Paddy Gregg emphasized the importance of this funding, stating, “Securing Australian government funding for our U.S. infrastructure expansion is a major milestone for Austal.” He noted that the loan reflects the company’s long-term contracts with the U.S. government, which include up to 11 Offshore Patrol Cutters for the Coast Guard and seven ocean surveillance ships for the Navy.
In addition to the FA2 facility, Austal is also progressing with the construction of Module Manufacturing Facility 3 (MMF3). This initiative is part of a broader strategy to enhance both shipbuilding and submarine production capabilities in the United States. The recent loan announcement follows a memorandum of understanding between Austal and Master Boat Builders Inc. in Coden, Alabama. This partnership aims to streamline production processes and address skilled labor shortages in the Gulf Coast shipbuilding sector.
Strengthening Defense Ties
The Albanese Government has expressed strong support for Australian defense companies like Austal, encouraging them to expand and secure international contracts. Minister for Defence Industry, Pat Conroy, highlighted the significance of Austal’s expansion, stating, “Austal’s expansion shows the strength of Australian businesses to export, invest, and support shared Australian-U.S. priorities such as defense.”
Through collaborative efforts with Master Boat Builders, Austal aims to enhance flexibility in meeting evolving fleet requirements. By distributing work across both companies’ facilities, they intend to reduce production bottlenecks and shorten build schedules, ensuring they can respond effectively to future demand. This partnership also includes plans for co-investing in workforce development initiatives to address the skilled labor needs in the region.
