Rebecca Hubbard
Posted: Wednesday, August 4, 2010 12:11 pm

The Ministry of Defence is hoping to save £20m per year after it signed a long-term contract with Austin Hayes, an industrial coatings contractor, to refurbish ammunition packs.

The Leeds-based company won the £18.5m contract and claims that over the next 10 years, it could end up being worth more than £40 million.

The firm, under the contract, will supply refurbished munitions packaging components to munitions manufacturers situated around the world supplying British troops.

The person responsible for the acquisition of munitions packaging, Royal Navy commander Peter Gilbert, said: "For the MoD, this partnering agreement has secured greater flexibility from industry in reaction to our increasingly dynamic operational requirements, and incentivised the development of innovative ideas that could make the total recovery process even more efficient.

"For Austin Hayes, this partnering agreement provides a clearer insight into the MoD's requirements and enables a degree of more stable planning on a longer term basis.

"Such partnering demonstrates that, with innovative thinking and the right attitudes on both sides, contracting for sustainable products and services is achievable and brings genuine benefits."

Nik Vjestica, Austin Hayes owner and managing director, thinks that the deal would "provide a stable platform" to work with the MoD for future development and research into other cost-effective packaging methods.

The deal builds on the existing relationship with the Ministry of Defence. 

The company, which regularly turns over £4 million, was founded in 1953. Work on repairing and making new ammunition packaging was started in the 1960s.

Vjestica added: "With them we will share the responsibility in developing future strategies which will benefit the taxpayer by providing better value for money, benefit our environment by developing greener technologies and ultimately providing our serving troops with a better and improved product."