American manufacturers are rushing to alleviate ammunition shortages caused by a pandemic

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JUST TWO Companies, Vista Outdoor and Olin Corp, supply most of America’s ammunition needs, mainly through two long-established brands. Remington, part of Vista, was founded in 1816, and Winchester Ammunition, owned by Olin Corp, was founded in 1866. Due to the increasing demand for bullets, both companies enjoy rapid growth that usually only new companies enjoy.

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Three times a day, pick-up trucks line up in front of Remington’s munitions factory on the outskirts of Little Rock, Arkansas, to take away the fruits of the round-the-clock shifts. It’s a sharp reversal from last summer when Remington went broke for the second time since 2018. Production was reduced to a trickle of balls of all raw materials that could be drawn from suppliers who had no certainty of being paid.

Even as Remington languished – it was then owned by a private equity firm, Cerberus Capital, which was more focused on complex financial transactions than growing the company’s sales – the ammunition market picked up. The biggest factor was Covid-19 and its associated restrictions, which encouraged millions of people to hunt and target shooting outdoors. Background checks on arms purchases, a commonly used market watch measure, had increased annually, but over the past year they had increased by an unprecedented 40%.

Remington was able to raise prices seven times. It has billions of dollars worth of unfinished business. Ammunition dealers surveyed by the National Shooting Sports Foundation (NSSF), a trading group, said it could have sold three times more ammunition in the first half of 2021 if it had been available. Vista, Remington’s new parent company, has increased its working capital and its workforce. The unit’s operating profit this year is expected to match the $ 81 million Vista paid for the business. At Winchester Ammunition, third-quarter revenue nearly doubled year over year to $ 400 million and gross operating profit nearly quadrupled.

The ammunition and arms industry prays that the good times will continue. In the past, there has been a surge in demand as gun owners – mostly white and male – feared new restrictions. Now it’s about new demographic groups. A survey by the NSSF shows that the proportion of female recreational shooters increased from 19% to 25% between 2006 and 2019. Now, 28% of gun owners are Hispanic, 25% Black, and 19% Asians. Gun clubs are springing up for every niche. For example, the Pink Pistols, a rifle and social group for sexual minorities, has 48 chapters across America. His motto: “Choose someone of your own caliber”.

Political opposition to firearms remains strong, with the result that companies have recently been relocating to places that may be a little friendlier. Remington’s licensed firearms division is moving from New York to Georgia, where gun laws are more permissive, and Smith & Wesson, another iconic brand, recently announced plans to move sticks from Massachusetts to Tennessee. But customers for guns and ammunition are popping up everywhere.â– 

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This article appeared in the business section of the print edition under the heading “Reloaded”


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