Major factors driving the market are the unstable geopolitical climate and increasing threat of terrorism, which lead to increasing military and defense expenditures. The United States allocated a budget of USD 611 billion during FY 2017, during which about USD 16 million were spent on medium (30mm XM814, 30mm Mk310, 50mm PABM – Programmable Air-Bursting Munitions) caliber weapon systems. The medium calibre ammunition market is anticipated to grow at a CAGR of 1.88% during the forecast period 2018 - 2023.
INCREASING THREAT OF TERRORISM
From a broad perspective, it can be said that the world woke up to terrorism in 2001 when Al-Qaeda carried out its attack on the World Trade Center in New York City, United States. Ever since, terrorist activities have been on the rise, and have become the most pressing issue for decision-makers dealing with diplomatic and military operations. On a global scale, Iraq emerged as the most vulnerable country to terrorist attacks. In 2016, there were approximately 2,415 terrorist incidents causing 6,960 deaths and 11,900 injuries.
Especially, the governments in the United States, the United Kingdom, the Kingdom of Saudi Arabia, and Australia have prioritised national security. For example, the NATO (North Atlantic Treaty Organization) is currently eyeing 40 mm (medium) caliber rounds for under-barrel and standalone shoulder-fired launchers, as well as crew-served automatic launchers. Shoulder-fired launchers are usually used for civilian use in riot-control. Whereas, under-barrel are used on battlefields.
The 40 mm rounds will be available at different levels of performance, namely, the 40 mm low-velocity rounds (or LV), which uses 40x46SR (Semi-Rimmed) ammunition for shoulder-fires and under-barrel launchers, and, the 40 mm high velocity (or HV), which uses 40x53SR rounds from crew-served automatic launchers.
The LV rounds are usually used with individual weapons, like M320 and M203 grenade launchers, while HV rounds are used with MK19 grenade machine gun. All of these have been extensively used in the battlefields of Iraq and Afghanistan.
The contract (by the US government) for the manufacture of LV rounds has been given to General Dynamics, whereas, American Ordnance will manufacture the HV rounds. Both the types of bullets are intended to be fielded by August 2019.
Therefore, the increasing threat of terrorism has led to higher spending by governments, to protect themselves, thereby driving investment into the ammunition industry.
Source: Mordor Intelligence Analysis
Source: Mordor Intelligence Analysis
Stringent laws and regulations serve as a deterrent for foreign companies trying to expand into other countries making it a restraint for medium caliber ammunition industry as its supply chains are not confined to a single nation.
Some countries follow a protectionist strategy to protect the domestic ammunition industry against foreign monopoly. For example, as part of the Make in India initiative, the Ministry of Finance, Government of India recently added a provision in the General Finance Rules (GFR) which gives preference to the domestic industry over foreign companies in government procurement contracts. Rule 153 (Reserved Items and other Purchase/Price Preference Policy) of GFR-2017 gives the central government power to provide for the mandatory procurement of any goods and services from any category of bidders, or provide for preference to bidders on the grounds of promotion of locally manufactured goods or locally provided services. The arms trade is one industry that will have a far-reaching impact because the World Trade Organization (WTO) (of which India is a member since 1995) has no regulations against protectionist policies on arms trade (unlike other industries).
Another example is the United States, which has the Specialty Metals Restriction. It forbids the Department of Defense from buying aircraft, missile and space systems, ships, tank and automotive items, weapon systems, ammunition or any related components if they are made of any specialty metal that is not melted or produced in the United States.
Rheinmetall AG, General Dynamics Corporation, BAE Systems plc, Denel SOC Ltd., Nexter Systems SA, CBC, Nammo AS, Mesko SA, and Orbital ATK Inc. among others.
- Sep 2018: US DOD announced that Alliant Techsystems Operations LLC and General Dynamics Ordnance and Tactical Systems will receive a contract worth USD 1.8 billion for the procurement of medium caliber ammunition. Two companies will compete for each order. The ammunition includes rounds which can be used in primary armament on the U.S. Army Bradley fighting vehicle, anti-materiel rifle, AH-64 Apache helicopter and other
- Aug 2017: Rheinmetall integrated its operations in Australia and New Zealand into a single operational unit, which includes the existing operations of Rheinmetall Defence Australia, Rheinmetall MAN Military Vehicles Australia, Rheinmetall Electronic Solutions Australia, and Logistic Solutions Australia.
- Jul 2017: Rheinmetall announced the further strengthening of its partnership with Supashock through the agreement to acquire 49% of the Australian-based company.
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1.1 Scope of the Study
1.2 Market Definition
1.3 Executive Summary
2. Research Methodology
2.1 Study Deliverables
2.2 Study Assumptions
2.3 Research Phases
3. MARKET INSIGHTS
3.1 Market Overview and Trends
3.2 Industry Attractiveness - Porter's Five Forces Analysis
3.2.1 Bargaining Power of Suppliers
3.2.2 Bargaining Power of Buyers
3.2.3 Threat of New Entrant
3.2.4 Threat Of Substitute Products and Services
3.2.5 Competitive Rivalry within the Industry
4. MARKET DYNAMICS
5. MEDIUM CALIBER AMMUNITION MARKET, SEGMENTED BY APPLICATION
6. GLOBAL MARKET ANALYSIS
6.1 North America
6.1.1 United States
6.1.4 Rest of North America
6.2.1 United Kingdom
6.2.6 Rest of Europe
6.3.4 South Korea
6.3.5 Rest of Asia-Pacific
6.4 South America
6.4.3 Rest of South America
6.5 Middle East & Africa (MEA)
6.5.1 Saudi Arabia
6.5.3 South Africa
6.5.5 Rest of Middle East & Africa
7. COMPETITIVE LANDSCAPE
7.2 Market Share Analysis
8. COMPANY PROFILES
8.1 Rheinmetall AG
8.2 General Dynamics Corporation
8.3 BAE Systems plc
8.4 Denel SOC Ltd.
8.5 Nexter Systems SA
8.7 Nammo AS
8.9 Orbital ATK Inc.
9. FUTURE MARKET OUTLOOK