zold said:
If all the ammo companies are running 24/7, then it is a shame that we do not see more new ammo startups using this time to get their foot into the market.
There are a number of problems in the manufacturing and supply chain, number one being lack of raw materials. Most ammunition companies are running 24/7 but with a reduced work force due to COVID19. Less people, less product. Raw materials are in short supply due to shut downs. Lead was in short supply when the lead mines shut down in February and most of the copper mines have been shut down since April. So, if you want to be a start-up in the ammunition business, you virtually have no access to the raw materials that you need to produce any product.
Another issue is the "operating margin" the ammunition companies are enjoying. There is currently no incentive for any ammunition or component supplier to increase investment to increase production. Most all companies increased their prices by 5% on August 1 and they can with current production, sell everything they produce without discounting or increasing capital investment. Their margins are approaching all time highs.
So, it's almost a perfect storm and we are stuck in a row boat, in that storm. Not so happy sailing.