Gun & Ammunition Manufacturing
Description
Companies in this industry manufacture small arms and ammunition. Major companies include American Outdoor Brands, Colt, Remington Outdoor, and Vista Outdoor (all based in the US), as well as Beretta (Italy), FN Herstal (Belgium), Glock (Austria), Heckler & Koch (Germany), Kontsern Kalashnikov (Russia), Norinco (China), and Taurus Armas (Brazil).
International trade of small arms, parts, accessories, and ammunition involving leading exporters and importers is estimated to be worth about $7 billion per year, according to the United Nations Office for Disarmament Affairs (UNODA). Ukraine is the largest importers of small arms while the US is the largest exporter of small arms, according to the Stockholm International Peace Research Institute (SIPRI).
The US gun and ammunition manufacturing industry includes about 600 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $10 billion.
COMPETITIVE LANDSCAPE
Demand is driven partly by hunters, gun enthusiasts, and weapon upgrades by police departments. The profitability of individual companies is closely linked to marketing. Large companies have economies of scale in purchasing. Small companies can compete effectively by producing premium-priced high-quality or decorative guns. The industry is highly concentrated: the top 50 companies account for over 90% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Centerfire pistols cartridges take up a major part US industry revenue (about 20%) followed by rimfire rifle/pistol cartridges (less than 10%), shotgun shells (less than 10%), and primers (less than 10%) account for the remainder. The US industry produces about eight million guns per year: majority of the guns are pistols and revolvers; followed by rifles, and then shotguns and other firearms which take up the remaining number. Within a category, a company may make guns of different caliber and style. The most popular pistol calibers are 9 millimeter, .45, and .22. The most popular revolver calibers are .357, .45, and .38.
Gun manufacture is similar to the manufacture of other metal products with moving parts that require precision machining and assembly. A typical gun contains between 50 and 100 parts. The precision parts are made from raw steel shapes using expensive computer-controlled machining stations. Because most manufacturers make several different models using the same machinery, production is in batches. Some manufacturers contract out all of their parts manufacturing to machine shops. Wood or plastic parts for stocks may be manufactured by outside contractors or produced in-house. Parts are assembled and finished by hand (sometimes with elaborate metal etching or other design work) and weapons are individually test-fired.
Ammunition consists of the projectile (or bullet), case, primer, and propellant (gunpowder). These components are manufactured separately, then assembled to form the final cartridge. Bullets are usually made from lead or lead alloys; cases are typically made of brass, steel, or aluminum, with brass being the most common. Bullets are made by pouring molten lead into a mold. The molded bullet is cooled quickly and removed from the mold. Cases are formed from annealed brass sheets, and their shapes are made using a punch and die set. Shotgun shell cases are made of brass and polypropylene plastic. Primers are made from two pieces of metal that encase a small amount of impact-sensitive explosive material. Gunpowder may be made by the ammunition manufacturer or purchased from suppliers.
Ammunition assembly is highly automated. Cases are cleaned and polished, then primers are inserted into the case. The case is then charged, or filled with the correct amount of gunpowder. Bullets are then inserted into the case. Some bullets may be jacketed with another metal to create various performance traits. Examples include full-metal jacket (FMJ), jacketed hollow point (JHP), and jacketed soft point (JSP). Ammunition is manufactured in runs, which are assigned lot codes that are printed on the ammunition's box and allow it to be inventoried and traced. Manufacturers routinely test-fire ammunition to ensure safety and quality. If a performance issue is found, ammunition from that lot can be recalled.
International trade of small arms, parts, accessories, and ammunition involving leading exporters and importers is estimated to be worth about $7 billion per year, according to the United Nations Office for Disarmament Affairs (UNODA). Ukraine is the largest importers of small arms while the US is the largest exporter of small arms, according to the Stockholm International Peace Research Institute (SIPRI).
The US gun and ammunition manufacturing industry includes about 600 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $10 billion.
COMPETITIVE LANDSCAPE
Demand is driven partly by hunters, gun enthusiasts, and weapon upgrades by police departments. The profitability of individual companies is closely linked to marketing. Large companies have economies of scale in purchasing. Small companies can compete effectively by producing premium-priced high-quality or decorative guns. The industry is highly concentrated: the top 50 companies account for over 90% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Centerfire pistols cartridges take up a major part US industry revenue (about 20%) followed by rimfire rifle/pistol cartridges (less than 10%), shotgun shells (less than 10%), and primers (less than 10%) account for the remainder. The US industry produces about eight million guns per year: majority of the guns are pistols and revolvers; followed by rifles, and then shotguns and other firearms which take up the remaining number. Within a category, a company may make guns of different caliber and style. The most popular pistol calibers are 9 millimeter, .45, and .22. The most popular revolver calibers are .357, .45, and .38.
Gun manufacture is similar to the manufacture of other metal products with moving parts that require precision machining and assembly. A typical gun contains between 50 and 100 parts. The precision parts are made from raw steel shapes using expensive computer-controlled machining stations. Because most manufacturers make several different models using the same machinery, production is in batches. Some manufacturers contract out all of their parts manufacturing to machine shops. Wood or plastic parts for stocks may be manufactured by outside contractors or produced in-house. Parts are assembled and finished by hand (sometimes with elaborate metal etching or other design work) and weapons are individually test-fired.
Ammunition consists of the projectile (or bullet), case, primer, and propellant (gunpowder). These components are manufactured separately, then assembled to form the final cartridge. Bullets are usually made from lead or lead alloys; cases are typically made of brass, steel, or aluminum, with brass being the most common. Bullets are made by pouring molten lead into a mold. The molded bullet is cooled quickly and removed from the mold. Cases are formed from annealed brass sheets, and their shapes are made using a punch and die set. Shotgun shell cases are made of brass and polypropylene plastic. Primers are made from two pieces of metal that encase a small amount of impact-sensitive explosive material. Gunpowder may be made by the ammunition manufacturer or purchased from suppliers.
Ammunition assembly is highly automated. Cases are cleaned and polished, then primers are inserted into the case. The case is then charged, or filled with the correct amount of gunpowder. Bullets are then inserted into the case. Some bullets may be jacketed with another metal to create various performance traits. Examples include full-metal jacket (FMJ), jacketed hollow point (JHP), and jacketed soft point (JSP). Ammunition is manufactured in runs, which are assigned lot codes that are printed on the ammunition's box and allow it to be inventoried and traced. Manufacturers routinely test-fire ammunition to ensure safety and quality. If a performance issue is found, ammunition from that lot can be recalled.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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