Kempsey hat maker Akubra has won a lucrative new Defence Force contract.

Under the contract it will supply around 12,000 slouch hats a year to the Australian Defence Forces, for at least the next five years..

The company has been making slouch hats for the armed forces since World War One.

Akubra spokesman Roy Wilkinson said the contract could be an economic boost for the Macleay, as production will have to increase.

"Under the previous tender we were getting a lot less than we're getting now," he said.

"So you know in effect we're probably trebling our production of the slouch hat and it's all important.

"Every part of what we do is important.

"If that means we're going to get another 8000 hats per annum to manufacture here in Kempsey well that's important for people's jobs.

"It will add to employment. It will secure employment here. It just helps you know secure our business model."

Mr Wilkinson says the $5 million dollar contract runs for at least five years.

He said the ongoing relationship with the Defence Forces means a lot to the family company.

"I couldn't tell you how important it is to the family," he said.

"Especially the family have given, that you know I'm now working with fifth generation of the same ownership, so you know there's obviously been a long history of supplying the slouch hat.

"It's something we're very passionate about.

"We know what we're doing and you know of course really it is an item of the uniform that should be made in Australia."