DroneShield to expand R&D and manufacturing capacity

Sydney-based DroneShield Limited will invest $13 million in a significant R&D and manufacturing capacity expansion at its HQ and at a new site in Sydney. It will add 2,500m² to the R&D centre at its Sydney HQ and open a new 3,000m² production facility in nearby Alexandria.

Together with planned expansions to its Australian contract manufacturing, and plans to set up contract manufacturing in Europe and the US, DroneShield says it can currently meet annual demand for about $500 millions-worth of product and this is expected to expand to $2.4 billion by the end of 2026.

The expansion in Australia is concurrent with DroneShield’s European and US manufacturing initiatives, against the backdrop of record global demand, it adds.

DroneShield Limited will make the investment via a 5-year lease and fitout commitment. The new production facility in Alexandria is expected to open in December 2025. This, and its investment in added R&D capacity, is expected to raise annual production capacity to $2.4 billion as it targets a $2.34 billion and rapidly growing market including in Europe, its fastest-growing export market, the company says. As DroneShield engages with its third party supply chain, which is substantially Australian, there is no requirement for heavy machinery and similar capital expenditure investment.

The new facility, including advanced in-house production, testing and warehousing capabilities, is DroneShield’s largest to date and more than three times the size of its current production assembly floor near central Sydney. The existing production assembly floor will be converted into an additional R&D area for the Company, resulting in a 5,530sqm total R&D area, the company explains.

“In response to rising threats and multiple wars taking place across the globe, Australia’s allies are increasing investment in modern defence capabilities,” said Oleg Vornik, CEO of DroneShield. “We are stepping up to meet this demand by investing in state-of-the-art facilities here and abroad, and in sovereign Australian skills development to provide the most modern and effective counter-drone capabilities in the world.”

This investment comes on the heels of DroneShield announcing it has received a $61.6 million European contract in June, the biggest single order in its history, followed shortly afterwards by a $9.7 million Latin American contract and an $11.7 million Five-Eyes R&D contract.

In line with the broader increase in military spending across the EU region, DroneShield says it is planning to establish a European Centre of Excellence, including a manufacturing and production facility, to support the continent’s domestic defence programs such as the European Commission’s €800bn ReArm Europe Plan / Readiness 2030, which was announced in March this year.

In 2024, exports accounted for 91 per cent of DroneShield’s existing output, proving them a vital example of the broader manufacturing capabilities Australia can deliver as part of its Future Made in Australia (FMIA) plan.

The changing landscape and rising threats have increased younger generations’ interest in working in Australia’s defence industry, according to Vornik.

“Interest in working in defence had been declining over decades of peace,” he said. “But we are seeing a rise in national pride as tyrants attempt to change the world order, and that’s translating to an uptick in younger staff seeking opportunities and adding real and timely value to Australia’s defence efforts.”