Boresight Ltd (ASX: BST) has signed a lease for a new 812 square metre manufacturing facility in Huntsville, Alabama, a site approximately 15 times the size of its current US premises. The expansion is designed to lift US manufacturing capacity and meet growing military and defence demand for the company’s aerial target drones.
The lease runs for a 3-year period on normal commercial terms, with options for extensions.
Why the expansion matters: from hundreds to thousands
The move signals a step-change in production scale. Boresight has stated the new facility will initially be able to manufacture more than 5,000 BQ-400 aerial target drones per year, with capacity to eventually produce all of the company’s drone offerings at scale.
The expanded footprint is expected to unlock economies of scale and bulk purchasing of components, which the company says will drive down manufacturing costs. To support the higher output, Boresight plans to purchase additional 3D printing and other supporting technology.
Key production points from the announcement include:
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Initial capacity of 5,000+ BQ-400 drones per year
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The BQ-400, with over 6,000 sold to date, will be manufactured at the site
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The new BQ-750 Block 2 will also be produced there
The BQ-750 Block 2 launch earlier this month confirmed immediate commercial traction for the new airframe, with first orders already delivered and the drone scheduled to fly at a major international C-UAS activity later in 2026.
- Sufficient space remains to grow capacity further as customer demand increases
For investors, the logic is straightforward. Higher production volumes combined with lower unit costs point to potential margin and competitiveness upside, provided demand continues to build.
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The “Made in the USA” advantage
For a defence supplier, where products are manufactured can carry as much weight as what they cost. Boresight has framed US-based production around three benefits.
The first is positioning. A “Made in the USA” stamp is described as being of increasing importance within the US military market. The second is policy insulation. Manufacturing domestically reduces exposure to import tariffs and other US government policy decisions that may affect imports. The third is logistics, with production closer to the customer enabling faster delivery and reduced freight costs compared with shipping from Australia.
To understand where these drones fit, it helps to know the C-UAS context. Aerial target drones replicate evolving drone threats, allowing military and industry customers to run repeatable training and testing scenarios without risking high-value ISR assets. This is the market Boresight serves.
Huntsville itself is a notable location within the US defence environment. It is a large US government and defence industry hub, home to multiple Counter-Uncrewed Aerial Systems (C-UAS) companies. Boresight noted that Alabama State, Huntsville City and local County governments have been strong supporters since the company first established a US entity in the city in 2023.
| Factor | What It Means | Investor Impact |
|---|---|---|
| Made in the USA | Local production stamp | Stronger appeal in US military market |
| Tariff insulation | Avoids import policy risk | More stable cost base |
| Proximity to customer | Faster delivery, lower freight | Improved margins, customer lock-in |
Building the team and the CEO’s view
The larger footprint also creates room to grow the workforce. Boresight expects the new site to enable the hiring of additional sales staff, drone technicians and support staff, bringing them together under one roof for enhanced coordination and efficiency. Additional sales staff are intended to widen market reach, while additional technicians would increase production output.
The company has outlined a clear split between its two hubs. The US facility will serve the US market, while the Fyshwick, Australia site continues to manufacture for non-US customers and remains the global innovation and product development hub.
Justin Olde, Managing Director & Chief Executive Officer
“This new facility will allow Boresight to expand and scale our manufacturing capacity to meet surging demand from our US based customers, both the military and industry. It enables a massive scaling of production from the hundreds to thousands of aerial target drones, driving up efficiencies and driving down costs.
The ability to service US customers directly from our US facility increases our responsiveness to customer requirements whilst reducing delivery lead times and freight costs. It also helps to insulate Boresight from US Government decisions on import tariffs and other policy changes that may occur.”
What happens next
Boresight has already taken occupancy of the new Huntsville facility, with a defined timeline for migrating production from its existing site.
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Boresight has taken occupancy of the new Huntsville facility.
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Production capacity transfer from the existing site is set to commence in August 2026.
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The transition is targeted for completion by end-September 2026.
The expansion sharpens Boresight’s positioning within a US defence market where demand for aerial target drones continues to grow. With a substantially larger manufacturing base, domestic production credentials and a clearer separation between its US and Australian operations, the company has laid the groundwork to scale output as customer requirements evolve.
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