Australia has unveiled plans to produce its first locally-made missiles as early as next year under a A$37 million ($24.5 million) contract with American munitions giant Lockheed Martin Corp, Report informs via Bloomberg.

Australia will work with the company to construct a small, initial batch of missiles as early as 2025, with the intention of ramping up mass production by the end of the decade, Acting Defence Minister Pat Conroy told a press briefing in Canberra on Tuesday.

“The long term goal is to move the Australian army from being able to strike at 40 kilometers to being able to strike at 1,000 kilometers,” Conroy said, adding that the Indo Pacific region was facing its greatest arms race since 1945.

The missile deal is part of a broader goal by the Australian government to reshape its military away from a focus on ground combat and toward a greater emphasis on long-range strike and area denial capabilities.

Australia is facing increasing strategic competition between the US and China in small Pacific nations just off the country’s coastline, as well as escalating tensions between Beijing and Southeast Asian countries like the Philippines in the South China Sea.

Conroy said the initial missiles produced in Australia would be suitable for launch from a Guided Multiple Launch Rocket System system. The government wants to then move toward manufacturing them on a broader scale.

In addition, Australia is planning to purchase longer range precision strike missiles, which can hit targets as far as 500 kilometers away, Conroy said, without specifying a timeline except to say the government aims to get the capability by “mid-decade.”