AFP, SUBANG, Malaysia: Top Austrian arms producer, Steyr Mannlicher, will shift production of its Steyr assault rifles and pistols to Malaysia, Defence Minister Najib Razak said Monday.

“Steyr Mannlicher will transfer fully the license to manufacture and export Steyr rifles and pistols in the global market to Malaysia,” Najib said after opening a four-day international defence exhibition here.

Major international arms manufacturers from the United States, Britain, South Africa and France are showcasing their state-of-the-art equipment, from battle tanks to infantry gear.

Najib said the Steyr assault rifles and pistols could be promoted in the Middle East and Africa as the weapons were technically superior compared to other makers found in the region.

“Considering the size of the market, it could be potential revenue earner for the country,” he said.

Najib announced that local defence firm National Aerospace Defence Industries (NADI) had concluded the deal with Steyr Mannlicher to manufacture Steyr rifles and pistols.

The joint venture firm, incorporated in March, would be known as Steyr Mannlicher (M) Sdn Bhd.

“With this development, Malaysia is now one of the leading manufacturers of military rifles and pistols in the world,” he said as he launched the Steyr AUGA3 model.

The rifle has a grenade launcher and inbuilt attachments for various sighting systems. Arms experts say its main competitor is the Heckler and Koch G36 assault rifle.

Najib said with full manufacturing rights located in Malaysia, Malaysians would acquire the skills to develop the weapon system to a higher degree of technical sophistication.

Chee Eng Boon, chief executive officer of SME Aerospace Sdn Bhd, a unit owned by NADI, told reporters that the production of the Steyr AUGA3 rifle would begin by the end of the year.

SME has produced the earlier Steyr AUGA1 since 1992 under licence, he said.

Chee said Malaysia hoped to export the AUGA3 rifle to Australia, New Zealand, Saudi Arabia and Oman. “We hope to explore new markets and produce up to 15,000 units per year.”

Christian Simku, Steyr Mannlicher manager, said Malaysia was picked to produce the Steyr rifles and pistols because it had a proven track record and the new weapon had potential.

“Australia and many Middle East countries are interested in the latest rifle,” he said, adding that each weapon cost some 2,000 dollars.