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2023-01-01

Ammunition, its Trajectory, and Manufacturers

Ammunition is what gives a weapon system lethality. Since its invention in the mid-19th century, ammunition has played a decisive role in how militaries, law enforcement, and security personnel operate. There is a direct correlation between supplies and the escalation, prolonging and intensifying the outcomes of armed conflict and crime. The axiom, “a gun without ammunition is useless,” highlights two important points; a defence force needs to have an adequate supply to defend its nation, and supply will shape military tactics.

Local companies that provide reliable ammunition products are, therefore, crucial to the functioning of a capable defence force and the sovereignty of states.

The international market and scale of ammunition is huge and continues to grow even as demand may not be able to keep up with supply. According to Fortune Business Insights, in 2019, the global market size of ammunition was valued at US$25.46 billion and is projected to reach US$29.96 billion in 2027.

Global demand versus supply for small arms ammunition has been an issue for decades. Past and ongoing conflicts, as well as the commercial market, demand a high number of cartridges, often needing a globalised approach to procurement. In 2005, in the U.S., the Lake City Arms Ammunition Plant produced around 1.2 billion small calibre cartridges each year for the U.S. Army, and even these quantities were still not enough as more had to be imported. From 2020 to the present, the U.S. market has been facing a shortage of bullets against growing gun sales and demand.

The Small Calibre Ammunitions Market

According to Emergen Research, in 2020, the small calibre ammunition market increased to US$7.74 billion and is expected to reach US$ 9.35 billion in 2028, with a compound annual growth rate (CAGR) of 2.3 per cent between 2020 and 2027. The ‘Global Small Caliber Ammunition Market’ report states the contributing factors to this growth are increased defence spending, growing interest in activities such as hunting and shooting, increasing number of civilian gun owners, rising concerns regarding personal safety, and owning a gun for self-defence and protection.

In end-use, the global small calibre ammunition market is split into military, law enforcement, hunting and sporting, and others. Law enforcement is expected to register a significantly rapid growth rate during the forecast period due to the higher usage of small-calibre ammunition, especially for training purposes. Another major reason cited is a rapid investment in setting up troops and task forces for special operations, requiring more weapons and ammunition.

The global demand for small-calibre ammunition is set to grow considerably. Spikes in demand for all ammunition calibres are likely to occur when considering ongoing conflicts.

The Large Calibre Ammunitions and Aircraft Munitions Markets

The global large calibre ammunition market is projected to achieve steady growth from 2022 to 2028. Valued at US$369 million in 2020, it is expected to reach US$452.5 million in 2028, according to Emergen Research. Different sources predict a different CAGR, ranging from 2.5 per cent to 5 per cent. This growth rate is due to several factors, mainly an increase in foreign deployment of armed forces and rising demand for firepower support on the battlefield. Notably, artillery munition accounted for a significantly large revenue share in 2020.

“The ability to target enemy positions near inhabited areas without causing collateral damage is something that majority of governments recognise as a benefit of possessing artillery ammunition,” the report stated. The CAGR may rise as ongoing conflicts are demanding more artillery munition.

The aircraft munitions market was estimated at US$463 million in 2021 and is projected to reach US$571 million by 2026 at a CAGR of 4.3 per cent, according to a MarketsandMarkets report. Rising demand for different types of missiles with various ranges is driving the market. The adoption of these systems by air forces worldwide has largely been due to the effectiveness of the system. “Advanced precision-guided weapon technology is now a prerequisite for a modern military inventory,” the report stated.

The increasing demand for a diverse range of aircraft munitions may highlight an access issue. Armed forces’ entry into the aircraft munitions market may come at a high price if regional suppliers are unavailable, hindering the quantitative and qualitative procurement measures. Therefore, the importance for armed forces to have a tried and tested regional munitions supplier is pivotal to modernisation efforts that are taking place globally.

Manufacturing modernisation efforts such as the UAE’s Industry 4.0 initiative point to the increasing global trend to establish production sovereignty and advanced capabilities in industries such as defence.

To produce and manufacture munition, a deep understanding of munition, along with the necessary machinery, raw materials and components, is essential. Armed forces should invest in reliable, regional munition providers with strong supply chains and international standards. State-of-the-art facilities, such as those established in the UAE for munition production, play a direct role in safeguarding nations and regions against the evolving threats seen today.

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