More Kaboom Stuff, Part II

Soldiers from 10th Para Brigade during an exercise in 2019. BTDM

SHAH ALAM: More kaboom stuff, part II. It appears that the Army is getting more ammo and rounds for its troops. The last time round it was mortar bombs, goose rounds, explosive charges and others. Now it wants suppliers to supply it with 105mm rounds, 40mm grenades – low and high velocity – hand grenades – smoke and fragmentation as well as flares and pyrotechnics.

An Oto Melara 105mm pack howitzer getting reconnected to its Vamtac hauler after firing rounds at the Firepower Exercise 2017.

As with the mortar rounds and explosive charges, the 105mm round and grenades were previously procured from SMEO Sdn Bhd, the partly state-owned ordnance company. SMEO manufacture them locally from components sourced from overseas or in the case of small orders import them directly from foreign manufacturers.
A soldier being trained to throw a hand grenade. BTDM

It is likely that SMEO can compete with others for the above tenders as it has the necessary license and track record to do so but it it will be competing with other companies then. It has lost similar tenders for other ammunition from 30mm rounds to 57mm and 76mm rounds used by the RMN ships. Based on the recent tenders I believe the Defence Ministry will soon be calling for open competition for small arms ammo – 5.56mm, 7.62mm and even the 12.7mm – the bread and butter of SMEO. If this happens, its effectively calling for the end of the company or at least its manufacturing capability. The company can survive as a trading company by winning tenders for all types of ammunition and other type of explosives for the military.
Red smoke hangs in the background after a RMAF EC725 lands during an exercise with 10th Para Brigade in 2019. BTDM

LV grenades – 20000 units.

There is a requirement for Malaysian Army to be equipped with 40 mm HEHC – LV round that have fragmentation and blast upon impact that can be used with Multiple Grenade Launcher (MGL),
M203 or another similar weapon.

HV grenades – 4000 units

There is a requirement to equip the Automatic Grenade Launcher (AGL) or any other similar weapon with Cartridge 40 MM High Explosive Dual Purpose (HEDP) High Velocity.

A G-Wagon fitted with an AGL during the exhibition held at Port Dickson for the 2018 Army Day.

Hand grenades – 10000 units

There is a requirement for the use of the Hand Grenade High Explosive (HE) for the Malaysian Army that capable to incapacitating personnel with or without Combat Body Armour and head protection.

Multi coloured (white, blue, red and yellow) grenade and signal mini flare cartridge – 70000 units

105mm HE ammunition – 3000 units

— Malaysian Defence

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Shah Alam

53 Comments

  1. Nammo seems to have good products ranges.

    Do we ever had any contracts for any weaponry or munitions with them? Apart from the m72 law.

    Reply
    AFAIK no

  2. “calling for open competition”

    “the end of the company”

    And so it should be, if it weren’t competitive under its own merit by today. As I said, the time for tongkat is over. Cronyism begone! Open competition is the way forward even if we have to suffer a little, but long run we will get our money’s worth.

  3. @ joe

    it costs a lot to have a national defence capability.

    why you see most countries have just one. indonesia for example will always give its ammo orders to PINDAD. Turkey MKEK, Pakistan POF, etc.

    What MINDEF needs to do IMO is to return all the strategic military industries under government control. SMEO especially, needs to be under LTAT or something.

  4. @Chua
    It depends if by definition “open competition” is an RFP or tender. By some, an RFP is considered to be sufficiently “open”. By others, including me, it should follow the proper tender process with full transparency. So “open” can be open (pardon the pun) for interpretation by different people, but it should follow the true purpose of “open competition”.

    @…
    “SMEO especially, needs to be under LTAT”
    Haven’t we learn anything from PSC-NGPV, NGVTech-Samuderas, Boustead-LCS debacle already? Enough with Government-linked already! Why can’t we learn it just doesn’t work for us.If they can’t survive by themselves, giving them tongkat will turn them into Proton pre-Geely era. Nobody then want to touch Proton cars with a 10ft pole. The same will happen with SMEO ammo, mark my words.

  5. Taib- “If SMEO is out of picture, can other local players enter the market”

    Even if other players enter the market; can they actually be a better alternative to SME? Can they actually sustain themselves by making a profit whilst also offering ammo at the right prices?

    SME’s main problem when it comes to ammo production is that it doesn’t have the needed domestic and export orders. On top of that all the main components needed have to be imported and paid for in foreign currencies.

    The whole idea behind SME was so we could be self reliant and wouldn’t have to depend on others – like many other ideas this sounded great on paper but didn’t turn out so well in practice.

    The various problems or conundrums we have, including SME; all boils down to the policy we have in place. A policy long in need of a total revamp to undo years of badly flawed and highly damaging policies (from how we manage procurement, to the amounts we allocate for defence, to the emphasis placed on the local industry) which are deeply ingrained in the system.

  6. @ joe

    Since when PSC-NGPV, NGVTech-Samuderas was government linked??

    All of indonesian, singaporean defence industries are govenment linked. Tell to them too that they need to do open tender for their defence procurements!

  7. @ azlan

    IMO something like SMEO, is not in a business to make money. It exists so that we could have independent ammunition making capability. it is also not just a matter of importing stuff. it is a matter of importing raw materials that is not considered to be weapons, and converting them into ammunition and arms. IMO SMEO should not be owned by an individual like it is right now, but owned by the government. Either it is to be owned by LTAT, or directly say put under the army Kor Ordnans for example.

  8. … – “IMO something like SMEO, is not in a business to make money”

    It’s also should not be in the business of losing money. Also, it should be able to deliver faster and if not cheaper, on par with foreign suppliers.

    When it’s faster and cheaper to buy from abroad; there is fundamentally flawed

    … – “it is also not just a matter of importing stuff. it is a matter of importing raw materials that is not considered to be weapons, and converting them into ammunition and arms”

    I have no idea what you’re driving at.

    Practically everything needed for the manufacture of ammo/explosives has to be imported and paid for in foreign currency. This raises the question of how really “self sufficient” we are and how SME would be able to manufacture stuff in the event of troubles or us facing difficulties buying abroad – the whole purpose of achieving “self sufficiency” and not being reliant on others; or as you put it : “have independent ammunition making capability”.

    How “independent”’and “self sufficient” are we; given our circumstances? The answer is “not very” despite all the hype and political expediency which comes with both words. For that matter; after decades in existence; apart from just license producing stuff what R&D has SME actually done to better achieve “self sufficiency”?

  9. … – “MO SMEO should not be owned by an individual like it is right now, but owned by the government”

    Pros and cons to both.

    For me: I have no issues if it’s owned by Dick Dastardly and Muttley as long as it can deliver products priced competitively and in a timely manner. I against the notion that the taxpayer should be forced to pay more so we can’t maintain the illusion that we’re shed sufficient (which were not) or that SME has to be kept afloat because it benefits the nation (it doesn’t if you look at it objectively and holistically).

  10. @ azlan

    ” I have no idea what you’re driving at. ”

    one word. embargo. a local ammunition manufacturing capability will ensure we can build ourbown ammo from raw materials if in any way we are prevented from getting ready made ammo.

  11. @…
    “singaporean defence industries”
    That never made any financial sense. Their homegrown equipment are f**king expensive if compared to buying off the shelf from other makers. But unlike us they have the stronger economy and currency plus far higher percentage allocated for defence to support such inefficiencies and they accept the penalties of “costs a lot to have a national defence capability”.

  12. @joe
    Very much agreed.

    @…
    Can we actually manufacture ammo 100% locally including mining raw materials?

    What about critical spare parts?

  13. @ chua

    Materials can be imported. Importing raw materials which is not weapons and importing ready made ammo which is considered weapons is 2 different things.

    Critical spare parts? I don’t understand what you mean by that.

    @ joe

    Does buying medical or life insurance make any financial sense?

    Another thing. When you spend billions on something, buying it 100% from overseas means that you are giving thousands of people in that country jobs to create it. Would you rather have those jobs being given to your countrymen instead?

  14. … – “one word. embargo”

    Five words : the availability of raw ingredients.

    As I’ve questioned before : in the event of an emergency order how fast can SMS produce and deliver? Depends on the quantities of raw ingredients that is stockpiled. In the unlikely event we face difficulties buying easy made ammo; chances we’ll face the same issue buying the needed components/raw ingredients.

    …, – “build ourbown ammo from raw materials if in any way we are prevented from getting ready made ammo.”

    Sounds great on paper and politically expedient. That is precisely the reasoning behind SME having a manufacturing ability. In reality however it’s dependent on various factors.

    Just because we have a certain ability doesn’t mean we are really “self sufficient” especially if all the components/raw ingredients needed for the production of small arms and explosives has to be imported from abroad.

    Something is deeply flawed when it’s cheaper, faster and more practical to source from abroad. Why should the taxpayer pay more buying the same thing locally just so we can maintain the illusion of self sufficiency”; which we aren’t.

    Just because one can manufacture ammo (using imported raw ingredients) doesn’t mean one is “self sufficient”. Why should the government continue feeding SME by awarding contacts for things which cost more; merely to keep SME afloat? Why should the end user and taxpayer be penalised to benefit the local industry under the illusion that tangible benefits are obtained by being “self sufficient” …. which we aren’t …

  15. … – “Would you rather have those jobs being given to your countrymen instead?”

    What happens if those local jobs are not sustainable? Do we award contracts (for higher priced items) just so those jobs can be maintained? Is that the best way to utilise taxpayers cash and for how long do we continue this? It’s precisely this line of reasoning why we’re in such a rut now.

    There are certain things we should do to create jobs and to improve the local industry (whether in defence or otherwise). It however must not be at the expense of the taxpayer. It must sustainable and
    must lead to tangible benefits.

  16. Chua – “What about critical spare parts”

    Indeed.

    The likelihood of us being embargoed is slim. If however it were to happen and was over a long period; we’d face difficulties in obtaining almost everything : spare engines, missile reloads, spares for aircraft, radars, artillery, batteries, etc, etc – everything.

    It’s not as if we stockpile large amounts of spares and other consumables because we foresee the possibility of being embargoed or in a protracted conflict. If we were embargoed; chances are our main main concern would be the economy; not our inability to procure parts for the Hornets or Jernas.

    I’m all for improving the local industry but it mustn’t be at the expense of the end user and taxpayer. Both shouldn’t have to pay more just to keep local companies afloat. The whole illusion of “self sufficiency” (itself political driven) and us deceiving ourselves into believing that what we do actually can be exported (price competitively) is a large reason why we’re in the position we’re now in.

    A case of use not making best use of our cash and doing things which are politically driven; at great expense to the end user and taxpayer.

  17. This was.a post by “stanman” some years ago.

    “Even when it comes to ammunition we have very little supply security as we import EVERYTHING from brass cups to primers. Even the UK has no supply security as it buys most of the powder it uses from Holland. Tank ammo? Hah! They machine the bodies but many critical components (fuzes etrc.) are imported and assembled.
    Self Sufficiency has NEVER been anything other than a fig leaf.
    You want to know why we produce our own webbing? To protect our own garment and stitching industry with a hefty 40% excise on all stitched products.”

  18. @…
    Yes and no. Insurance only makes sense to yourself when you can feed yourself and keep healthy already. If you are barely doing that, sometimes going hungry, you won’t think about spending money to buy insurance, won’t you? The same it works for SG because they can afford it and their people aren’t grumbling about wasting money while they remain hungry. We on the other hand….

    I said it before, Im all for local production if it makes financial sense. Building ships and hundreds of armoured vehicles is acceptable because of the multi-year long job creation by the hundreds/thousands and their CKD price isn\’t too ridiculous, provided its planned & managed professionally. But to CKD a mere 18 units light arty guns? Or doing complex electronics locally for just 6 ships? Or producing ammo with imported parts for orders that comes on & off a few years? Or make guns that are inferior quality to the original? How does it make sense? There are somethings we should do and there are some others we shouldn’t even dare to consider.

  19. @ azlan

    ” It’s precisely this line of reasoning why we’re in such a rut now ”

    We are in a rut right now because we fail to do local manufacturing properly and deliver those products (gowind, gagah samudera, kedahs). there should be no issues if those projects deliver the products on spec and on schedule.

    BTW we have not seen stanman for quite a while now…

    @ joe

    ” producing ammo with imported parts for orders that comes on & off a few years? ”

    We started SMEO in 1969. Ammo production should be much more stable and long term than building IFVs and ships. It cant be sustainable if we keep doing open tender for something we can do locally.

  20. …. – “We are in a rut right now because we fail to do local manufacturing properly and deliver those products”

    We’re in this position because of a highly flawed and politically driven policy which amongst other things places emphasis on the local industry under the illusion that it actually benefits the country.

    The end user and taxpayer should never have to pay higher prices just to support the local industry based on the dubious claim that it actually promotes self sufficiency …..

  21. @…
    “Ammo production should be much more stable and long term”
    Think about it. Ammo are by definition, a consumable item. If there is lesser consumption, there is lesser demand for it right? We aren’t at war, we hardly have live fire exercises and Im guessing most are left to be time expired and disposed off. In that view, ATM is probably prudent in keeping minimal safe peacetime level stocks (I hope!). This is evident from their infrequent replenishment buys.

    This is wasting taxpayer money keeping the company alive with such a business model. Business needs to constantly generate income, staffs needs to get paid monthly, overheads needs to be paid on time. If they don’t intend to be an Ali Baba company, how are they going to get the money to survive on a business that gets small orders once every 2-3 years? What are the staffs going to do in between order periods?

    So what did SMEO did in the past 50 years to justify their own survival? I talked about smart rounds, have they ever did something about it?

  22. All of our local defence manufacturing should create a path for us in the future to create our own defence equipment.

    I will take Indonesia for example. They have recently managed to design and build their own Coast Guard 80m OPV

    http://pbs.twimg.com/media/EHX6s1jUcAUnym6.jpg

    http://pbs.twimg.com/media/EDyCGhvU8AE_pS4.jpg

    http://1.bp.blogspot.com/-VVrTlj078Vg/XamuvHvQHEI/AAAAAAABILA/SGMZ5BV3LRoXzEOaewruWUvoK5jTOV1rQCLcBGAsYHQ/s1600/Bakamla%2BKN321-3.jpg

    http://miro.medium.com/max/2560/1*stIScvYVbt5ngsQP3-5Psg@2x.jpeg

    http://cdn.medcom.id/images/content/2020/03/08/1119656/5yK72LwrWs.jpg

    All 3 ships were bought for just Rupiah 600 billion (USD41 million). That is less than USD14 million per ship for a large 80m OPV. Our smaller LMS68 costs more than USD60 million each. That means for the same budget of 4 LMS68, you could buy 18 of the BAKAMLA 80m OPV !

    http://nasional.tempo.co/read/1261405/bakamla-luncurkan-3-kapal-penjaga-perbatasan/full&view=ok

  23. @ joe

    ” Think about it ”

    Yes think about it. When was SMEO was established? 1969. What was the condition of the country in 1969?

    So do you want to continue this capability? If Yes, stop open tender for small arms ammo and just order from SMEO.

    Dont want to maintain this capability? Then it will close and disappear. Decision needs to be done. If Mindef does not want this capability, then help SMEO to close down and liquidate all the manufacturing equipments.

    If we cannot maintain a local defence capability, in the future dont start one.

  24. That is indeed the rationale behind various things we do (Steyrs, M-4s, Kedahs, LCSs, AV-8s, etc) but in reality it hasn’t worked out as well as we intended. We are no closer to bring self sufficient as we were years ago.

    We don’t have economics of scale and other needed prerequisites. Company’s tend not to get the orders they need and at times have to be bailed out (using taxpayers funds) by the government and the end user and taxpayer ends up paying more.

    Most companies also do not make the transition of merely being a middle man or the manufacturer of licensed foreign products to one being able to provide the country with added value. Take SME; after decades of merely producing licensed stuff; it has not done any R&D towards improving on what it’s a able to offer.

    Something fundamentally flawed with the way we do things when we supposedly have a ability to maintain self sufficiency (driven by political imperatives) but it’s cheaper and faster to buy from abroad.

    This is exactly what I meant when I stress that the whole defence policy; from how we allocate funds, to how we handle procurement, to the part the local industry plays; is in need of a major holistic rethink and revamp.
    Without this we are destined to keep repeating the same mistakes and to stay in the rut we’re in.

  25. There are companies which have done pretty well. Take AIROD; despite various issues over the years it does its job and has long gained foreign customers. The company that provides the IR reducing paint has done well, including exports. It actually conducted its own R&D without government help. It doesn’t have large booths at DSA and little political pull but it has achieved something.

    The vast majority of others however; like the Little Bird agent; makes money by merely being a middle man but provides zero added value. It is the present rotten, flawed and self defeating system/policy we have in place which enables this. Under the guise of “self sufficiency” and the illusion it actually benefits the country.

    There are times when local companies go bust; leaving the MAF in a fix as parts/support for certain things are disrupted.

  26. …. – “f Mindef does not want this capability, then help SMEO to close down and liquidate all the manufacturing equipments”

    If goes beyond MINDEF. Logically if ab entity is losing money and can’t deliver what it’s supposed to deliver it has to shut or reinvent itself (this applies not only to
    SME). The problem is the whole issue is tied to politics.

    Critics will also accuse the government of not providing jobs to “anak tempatan”. Others will actually believes we can be sufficient (despite bing reliant on foreign sources for the tech and raw materials at the right prices.
    Others will say we are not going to war; paying higher prices to keep local companies afloat is a price worth paying to maintain a local capability.

    … – “If we cannot maintain a local defence capability, in the future dont start one”

    We have to have firm goals; knowing what we want to achieve and what we can. Also knowing our limitations and setting a point when we are willing to cut our losses if something is not sustainable.

  27. @ azlan

    “We have to have firm goals; knowing what we want to achieve and what we can. Also knowing our limitations and setting a point when we are willing to cut our losses if something is not sustainable”

    We can achieve building our own ammo. But we need to keep buying ammo from our own factory to maintain that capability rather than do open tender. Open tenders for something we cannot do is fine.

    If we dont want the capability that we already have like SMEO, then a firm decision to close it (with it proper retrenchment of the manpower resources and helping to divest the equipments and making sure it does not fall into wrong hands) must be taken, and not just leave it be like a zombie.

  28. @ azlan

    Yes of course goyang kaki middlemen with no add on value processes need to be banished. But SMEO with actual manufacturing capability? If you can keep sending planes to be repaired to Airod, why cant you continue ammo directly to SMEO (which coincidentally owned by the same person).

    If the government have issues with the owner, then the government sholud bring SMEO back under full govenment ownership.

  29. … – “We can achieve building our own ammo”

    License producing ammo using components sourced from abroad is something we’ve long done.

    If one adopts the approach that national interests takes precedence over the end user and tax payer then fine. To me it’s a self defeating policy which leads us nowhere. To me keeping a local company afloat based on the “self sufficiency” myth is a strict no. It’s ridiculous to buy “local” (not really “local) when others can deliver faster and cheaper.

    As I pointed out – “Critics will also accuse the government of not providing jobs to “anak tempatan”. Others will actually believes we can be sufficient (despite bing reliant on foreign sources for the tech and raw materials at the right prices.
    Others will say we are not going to war; paying higher prices to keep local companies afloat is a price worth paying to maintain a local capability”

    We strictly don’t have the luxury to continue with our longstanding deeply flawed and ingrained practises. If we do we won’t progress, our cash won’t be our to optimum/effective use and the MAF will be stuck in its present rut.

  30. …. – “? If you can keep sending planes to be repaired to Airod, why cant you continue ammo directly to SMEO (which coincidentally owned by the same person)”

    Because AIROD at least gains and continues to gain foreign customers and provides services (locally and abroad) at competitive prices. SME can’t compete with anyone and is losing money. Why do you think we find it cheaper, faster and more practical to source ammo and explosives from abroad?

    That’s why ….

    … – “r, then the government sholud bring SMEO back under full govenment ownership.”

    Really? If the government continues with its flawed policies and can’t provide sufficient orders what good will it do?

    Doesn’t make a different if SME is owned by the government, a private enterprise or Dick Dastardly if it can’t provide ammo at competitive prices and can’t reinvent itself.

  31. @ azlan

    “Doesn’t make a different if SME is owned by the government, a private enterprise or Dick Dastardly if it can’t provide ammo at competitive prices and can’t reinvent itself”

    1) is SMEO ammo prices not competitive?

    2) is local ammo production capability which can allow us to produce ammo if we are being militarily embargoed a capability we want to delete?

    3) If no 3 is yes, we need to officially decide and properly dispose of the said capability.

    4) if no 3 is no, then we need to continue buying ammo that can be manufactured by SMEO rather than buying from overseas.

  32. …. – “If the government have issues with the owner”

    What issues does it have with the owner?

    The issue is that SME doesn’t have sufficient local orders and an export base which would enable it be competitive. The result is that we are buying from abroad and SME can’t sustain itself.

  33. BTW there is tons of things that SMEO can do other than just manufacturing ammo if you put extra thought into it.

    As they already building M16s and have M16 toolings.

    1) refurbishment and rebuild of M16A1 to as new condition

    2) rebuilding M16A1 into DMR for infantry squads (longer barrel than the M4 so better accuracy to longer ranges)

    3) creating special AR15 based SBR for tankers and IFV crews, something similar to the Maxim PDX

    http://4.bp.blogspot.com/-G-7UB5HJDIU/XEbg-rVw16I/AAAAAAAATWU/-4lFXmaVXYYqqP7ky6PYdTmZeT-8AykKwCLcBGAs/w1200-h630-p-k-no-nu/Maxim%2BDefense%2Bannounces%2Bnew%2BPDX%2BSBR%2Band%2Bpistol%2Bin%2B7.62x39mm%2Band%2B5.56%2BNATO.jpg

  34. Another issue with your AIROD/SME comparison is that AIROD is the only entity here certified and able to perform depot level maintenance for various types of platforms operated. Without AIROD we’d have to send the platforms abroad – more time consuming and costly.

    Without SME; we’d easily be able to source ammo and explosives abroad (which we do); faster and cheaper than SME is able to.

  35. @ azlan

    ” The issue is that SME doesn’t have sufficient local orders ”

    So what can we do to solve that issue?

    “Another issue with your AIROD/SME comparison is that AIROD is the only entity here certified and able to perform depot level maintenance for various types of platforms operated. Without AIROD we’d have to send the platforms abroad – more time consuming and costly”

    SMEO is also the is the only entity here certified and able to manufacture small arms ammo. Is actually ordering thru different tenders (also time needed to test those ammos to check its specifications etc etc) faster and cheaper than giving SMEO multi year contracts so SMEO can manage its materials lead time?

  36. … – “is SMEO ammo prices not competitive”

    If it was we wouldn’t have sourced ammo from abroad.

    As has been discussed previously how can SME remain competitive due to various factors. If it was competitive and could deliver fast; we wouldn’t have awarded various contracts to companies abroad. Those companies either have stocks on hand or can produce at lower prices.

    … – “2) is local ammo production capability which can allow us to produce ammo if we are being militarily embargoed a capability we want to delete”

    Depends on how fast SME can ramp up production and deliver. That depends on whether it has the needed components/raw ingredients in stock to enable immediate production.

  37. @…
    AIROD is competitive in the open market. SMEO isn’t. Even if Government were to open tender for plane MRO, I am confident AIROD can win it fair & square.

    See why one entity could thrive by its own while the other will perpetually drain government funds? If we can accept this penalty and can afford it, well fine by me but the thing is, we can’t. We don’t have much to spend on defence, so we have to make it count for every kupang.

  38. @…
    “So what can we do to solve that issue?”
    Well we have to consume the ammo. How? Well, either go to war on pretext of killing terrorists or go crazy during live fire exercises. Too extreme? Well dig a big hole, dump ammo inside and light the fuse, then enjoy the fireworks. Rinse & repeat every few months.

    “giving SMEO multi year contracts”
    How to give them multi-year contracts if the order pattern is on & off a couple of years?

    Talking about embargoment how likely is that going to happen anyways? We would have to frackup so bad up to Saddam or Ghaddafi levels for the free world to embargo us to such extents. Our economy & people would suffer firstly before our military stockpile dwindles.

    Reply
    We don’t do that, surplus ammo are sold overseas mostly the US

  39. @ azlan

    ” Depends on how fast SME can ramp up production and deliver ”

    a consistent multi year contract for ammo will eliminate that point.

    @ joe

    ” See why one entity could thrive by its own while the other will perpetually drain government funds? ”

    why you can direct award aircraft MRO to airod, but not so for ammo to SMEO?

    ” We don’t have much to spend on defence, so we have to make it count for every kupang ”

    lots of other means without having to kill our existing ammunition manufacturing capability.

  40. … – “a consistent multi year contract for ammo will eliminate that point.”

    No …. Not as clear cut as that.

    It depends on how much ammo we expand on an annual basis during training and exercises; as well as replacing time expired stockpiles.

    …. – “why you can direct award aircraft MRO to airod, but not so for ammo to SMEO?”

    Because AIROD is the only entity in the country certified and equipped to perform depot level maintenance for various aircraft operated. The alternative to AIROD would be sending aircraft abroad rather; takes longer and more expensive. Another point is that AIROD performs work requiring a high level of skill and experience.

    SME merely license produces ammo with components fully sourced from abroad and in some cases merely assembles with components sourced from abroad. It simply can’t compete price wise with foreign supports we’ve sourced from; which is why we ordered what we did in the first place.

    The only thing which SME can possibly compete price wise is small arms ammo. We don’t use enough 7.62mm, 57mm, 105mm, 155mm, 76mm, 40mm, 30mm, 25mm, 12.7mm and other things to enable SME to produce in the numbers required to keep prices down.

  41. Police, MMEA, TUDM, TLDM, TD all consume ammo.

    Having the need to be able to fight on 2 fronts in both East and West Malaysia will need us to have increased stockpile of ammo.

    Small quantity rounds like AGL grenades, yes do a tender.

    Small arms ammo that SMEO can produce, why do we need to have open tender for that?

  42. September 14, 2020 at 6:38 pm
    The possibility of an arms embargo has been used to justify self sufficiency. If we really examine the issue objectively and dispassionately; several facts come into play. Certain countries are better placed to withstand embargoes than others. If we were embargoed and SME was actually able to produce at short notice the ammo we need: in the long run we’d face difficulties obtaining spares for just about everything we operate – from the Hornets to the Lekuis to our missile systems. Unless we embarked on certain adventures; chances of us being embargoed are slim. If it were to occur our main worry would be the economy..

    The type of embargo and by whom also plays a part. If we were not at war and no engaged in any activities that sees us expanding ammo in large quantities; it won’t be an issue

    If we were embargoed say by the EU; we’d still have other avenues to rely on. If we were under a UN embargo then we’d be truly buggered – an extremely unlikely scenario however.

  43. … – “Police, MMEA, TUDM, TLDM, TD all consume ammo”

    If they did in the quantities required then SME would be in a much healthier position.

    It boils down how much ammo we actuality use. We have stockpiled but will only replenish if the stockpile has gotten below a certain level; either through usage or expiry.

    … – “Small arms ammo that SMEO can produce, why do we need to have open tender for that?”

    I suppose to ensure we get the best deal as possible. If a foreign supplier can supply cheaper and faster than SME (indeed the case) then awarding SME a contract merely because it’s a local company isn’t doing the taxpayer justice; not the optimum way to use our funds.

  44. @…
    “why you can direct award aircraft MRO to airod”
    When did I ever gave you that impression? Haven’t you see me hollering for open tenders so far? What I did say is this: “Government were to open tender for plane MRO, I am confident AIROD can win it fair & square.”

    “Police, MMEA, TUDM, TLDM, TD all consume ammo”
    If all of them can consume yearly what SMEO can optimally produced yearly, yeah why not? But this isn’t what’s happening now right?

  45. @ joe

    “But this isn’t what’s happening now right?”

    what is happening is ammo bought from overseas thru goyang kaki middlemens. that is better than supporting our own local ammo manufacturer right?

  46. …. – “what is happening is ammo bought from overseas thru goyang kaki middlemens. that is better than supporting our own local ammo manufacturer right?”

    Depends.

    If one adopts the attitude that paying a higher price merely to support the local industry is a price worth paying. Instead of being hand fed indefinitely; the local company should reinvent itself by offering added value. After decades in business SME still doesn’t do anything beyond license producing and assembling stuff using components sourced from abroad.

    Or one can adopt the position (like me) that the end user and taxpayer should never have to pay higher just so a local company can sustain itself; that the needs of the local industry, should never take precedence over the needs of the end user.

    As it stands we’ve found that it’s cheaper and faster to source from abroad.

    Supporting locals/anak tempatan is great if it can be sustainable and if we don’t have to pay higher prices and wait longer for delivery.

  47. @…
    “ammo bought from overseas thru goyang kaki middlemens”

    The Government haven’t done that yet, from report hint by Marhalim above: “I believe the Defence Ministry will soon be calling for open competition for small arms ammo – 5.56mm, 7.62mm and even the 12.7mm”.

    This is a classic supply & demand issue. There is little demand but the capacity to oversupply is present. In normal scenario, it presses down prices but expands the buying market (when its cheaper more can buy). In this case, there are no other buyers, and if SMEO throw prices, they are dead as they cannot recoup the cost of manufacturing these ammo.

    And as seen from your news, open competition means local companies doesn’t enjoy preferences and even one such vaunted entity as H&K cannot rest on their laurels & protectionism. Even one such as them became complacent and lost whatmore our local companies feeding off protectionism.

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