European Ammunition - ETH Z

Surveying Europe’s Production and Procurement of Small Arms and Light Weapons AmmunitionThe Cases of Italy, France,

and the Russian Federation

Edited by Benjamin King

AWorkingPaperoftheSmallArmsSurvey

10

2 Small Arms Survey Working Paper 10 King European Small Arms and Light Weapons Ammunition 3

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About the Small Arms Survey

The SmallArms Survey is an independent research project located at theGraduate Institute of International and Development Studies in Geneva,Switzerland.Establishedin1999,theprojectissupportedbytheSwissFederalDepartmentofForeignAffairs,andbysustainedcontributionsfromtheGov-ernmentsofCanada,Finland,Germany,theNetherlands,Norway,Sweden,and theUnitedKingdom.TheSurvey isalsograteful forpastandcurrentprojectsupportreceivedfromtheGovernmentsofAustralia,Belgium,Den-mark,France,NewZealand,Spain,andtheUnitedStates,aswellasfromdif-ferentUnitedNationsagencies,programmes,andinstitutes. TheobjectivesoftheSmallArmsSurveyare:tobetheprincipalsourceofpublicinformationonallaspectsofsmallarmsandarmedviolence;toserveasaresourcecentreforgovernments,policy-makers,researchers,andactiv-ists;tomonitornationalandinternationalinitiatives(governmentalandnon-governmental)onsmallarms;tosupporteffortstoaddresstheeffectsofsmallarmsproliferationandmisuse;andtoactasaclearinghouseforthesharingofinformationandthedisseminationofbestpractices.TheSurveyalsospon-sorsfield researchand information-gatheringefforts, especially inaffectedstatesandregions.Theprojecthasaninternationalstaffwithexpertiseinse-curitystudies,politicalscience,law,economics,developmentstudies,sociol-ogy,andcriminology,andcollaborateswithanetworkofresearchers,partnerinstitutions, non-governmental organizations, and governments in morethan50countries.

SmallArmsSurveyGraduateInstituteofInternationalandDevelopmentStudies47AvenueBlanc,1202Geneva,Switzerland

p +41229085777f +41227322738e [email protected]

w www.smallarmssurvey.org


Occasional Papers

1 Re-Armament in Sierra Leone: One Year after the Lomé Peace Agreement,by

EricBerman,December2000

2 Removing Small Arms from Society: A Review of Weapons Collection and

Destruction Programmes,bySamiFaltas,GlennMcDonald,andCamilla

Waszink,July2001

3 Legal Controls on Small Arms and Light Weapons in Southeast Asia,by

KatherineKramer(withNonviolenceInternationalSoutheastAsia),

July2001

4 Shining a Light on Small Arms Exports: The Record of State Transparency,by

MariaHaug,MartinLangvandslien,LoraLumpe,andNicMarsh(with

NISAT),January2002

5 Stray Bullets: The Impact of Small Arms Misuse in Central America,byWilliam

Godnick,withRobertMuggahandCamillaWaszink,November2002

6 Politics from the Barrel of a Gun: Small Arms Proliferation and Conflict in the

Republic of Georgia,bySpyrosDemetriou,November2002

7 Making Global Public Policy: The Case of Small Arms and Light Weapons,by

EdwardLauranceandRachelStohl,December2002

8 Small Arms in the Pacific,byPhilipAlpersandConorTwyford,March2003

9 Demand, Stockpiles, and Social Controls: Small Arms in Yemen,byDerekB.

Miller,May2003

10 Beyond the Kalashnikov: Small Arms Production, Exports, and Stockpiles in

the Russian Federation,byMaximPyadushkin,withMariaHaugand

AnnaMatveeva,August2003

11 In the Shadow of a Cease-fire: The Impacts of Small Arms Availability and

Misuse in Sri Lanka,byChrisSmith,October2003

12 Small Arms in Kyrgyzstan: Post-revolutionary Proliferation,byS.Neil

MacFarlaneandStinaTorjesen,March2007,ISBN2-8288-0076-8(first

printedasKyrgyzstan: A Small Arms Anomaly in Central Asia?,byS.Neil

MacFarlaneandStinaTorjesen,February2004)

13 Small Arms and Light Weapons Production in Eastern, Central, and Southeast

Europe,byYuditKiss,October2004,ISBN2-8288-0057-1

14 Securing Haiti’s Transition: Reviewing Human Insecurity and the Prospects for

Disarmament, Demobilization, and Reintegration,byRobertMuggah,

October2005,updated,ISBN2-8288-0066-0

15 Silencing Guns: Local Perspectives on Small Arms and Armed Violence in

Rural South Pacific Islands Communities,editedbyEmileLeBrunand

RobertMuggah,June2005,ISBN2-8288-0064-4

16 Behind a Veil of Secrecy: Military Small Arms and Light Weapons Production

in Western Europe,byReinhildeWeidacher,November2005,ISBN

2-8288-0065-2

17 Tajikistan’s Road to Stability: Reduction in Small Arms Proliferation and

Remaining Challenges,byStinaTorjesen,ChristinaWille,andS.Neil

MacFarlane,November2005,ISBN2-8288-0067-9

18 Demanding Attention: Addressing the Dynamics of Small Arms Demand,by

DavidAtwood,Anne-KathrinGlatz,andRobertMuggah,January2006,

ISBN2-8288-0069-5

19 A Guide to the US Small Arms Market, Industry, and Exports,1998–2004,by

TamarGabelnick,MariaHaug,andLoraLumpe,September2006,ISBN

2-8288-0071-7

20 Small Arms, Armed Violence, and Insecurity in Nigeria: The Niger Delta in

Perspective,byJenniferM.HazenwithJonasHorner,December2007,

ISBN2-8288-0090-3

21 Crisis in Karamoja: Armed Violence and the Failure of Disarmament in Uganda’s

Most Deprived Region,byJamesBevan,June2008,ISBN2-8288-0094-6

22 Blowback: Kenya’s Illicit Ammunition Problem in Turkana North District, by

JamesBevan,June2008,ISBN2-8288-0098-9

23 Gangs of Central America: Causes, Costs, and Interventions, byDennisRodgers,

RobertMuggah,andChrisStevenson, May2009,ISBN978-2-940415-13-7

24 Arms in and around Mauritania: National and Regional Security Implications, by

StéphaniePézardwithAnne-KathrinGlatz,June2010,ISBN978-2-940415-33-5

25 Transparency Counts: Assessing State Reporting on Small Arms Transfers,

2001–08,byJasnaLazarevic,June2010,ISBN978-2-940415-34-2


Special Reports

1 Humanitarianism Under Threat: The Humanitarian Impact of Small Arms and

Light Weapons, byRobertMuggahandEricBerman,commissionedby

theReferenceGrouponSmallArmsoftheUNInter-AgencyStanding

Committee,July2001

2 Small Arms Availability, Trade, and Impacts in the Republic of Congo, by

SpyrosDemetriou,RobertMuggah,andIanBiddle,commissionedby

theInternationalOrganizationforMigrationandtheUNDevelopment

Programme,April2002

3 Kosovo and the Gun: A Baseline Assessment of Small Arms and Light Weapons

in Kosovo, byAnnaKhakeeandNicolasFlorquin,commissionedbythe

UnitedNationsDevelopmentProgramme,June2003

4 A Fragile Peace: Guns and Security in Post-conflict Macedonia, bySuzetteR.

Grillot,Wolf-ChristianPaes,HansRisser,andShellyO.Stoneman,

commissionedbyUnitedNationsDevelopmentProgramme,and

co-publishedbytheBonnInternationalCenterforConversion,SEESAC

inBelgrade,andtheSmallArmsSurvey,June2004,ISBN2-8288-0056-3

5 Gun-running in Papua New Guinea: From Arrows to Assault Weapons in the

Southern Highlands,byPhilipAlpers,June2005,ISBN2-8288-0062-8

6 La République Centrafricaine: Une étude de cas sur les armes légères et les

conflits (The Central African Republic: A case study of small arms and con-

flicts),byEricG.Berman,publishedwithfinancialsupportfromUNDP,

July2006,ISBN2-8288-0073-3

7 Small Arms in Burundi: Disarming the Civilian Population in Peacetime (Les

armes légères au Burundi: après la paix, le défi du désarmement civil), by

StéphaniePézardandNicolasFlorquin,co-publishedwithLigueIteka

withsupportfromUNDP–BurundiandOxfam–NOVIB,inEnglishand

French,ISBN2-8288-0080-6

8 Quoi de neuf sur le front congolais? Évaluation de base sur la circulation des

armes légères et de petit calibre en République du Congo (What’s new on the

Congolese front? Fundamental evaluation of the circulation of small arms and

light weapons in the Republic of the Congo), byRobertMuggahandRyan

Nichols,publishedwithUNDP–RepublicofCongo,December2007,

ISBN2-8288-0089-X

9 Small Arms in Rio de Janeiro: The Guns, the Buyback, and the Victims, by

PabloDreyfus,LuisEduardoGuedes,BenLessing,AntônioRangel

Bandeira,MarcelodeSousaNascimento,andPatriciaSilveiraRivero,a

studybytheSmallArmsSurvey,VivaRio,andISER,December2008,

ISBN2-8288-0102-0

10 Firearm-related Violence in Mozambique, ajointpublicationoftheMinistryof

theInteriorofMozambique,theWorldHealthOrganization—Mozambique,

andtheSmallArmsSurvey,June2009,ISBN978-2-940415-14-4


Book Series

Armed and Aimless: Armed Groups, Guns, and Human Security in the ECOWAS

Region, editedbyNicolasFlorquinandEricG.Berman,May2005,ISBN

2-8288-0063-6

Armés mais désœuvrés: groupes armés, armes légères et sécurité humaine dans la

région de la CEDEAO, editedbyNicolasFlorquinandEricG.Berman,

co-publishedwithGRIP,March2006,ISBN2-87291-023-9

Targeting Ammunition: A Primer, editedbyStéphaniePézardandHolger

Anders,co-publishedwithCICS,GRIP,SEESAC,andVivaRio,June2006,

ISBN2-8288-0072-5

No Refuge: The Crisis of Refugee Militarization in Africa, editedbyRobert

Muggah,co-publishedwithBICC,publishedbyZedBooks,July2006,ISBN

1-84277-789-0

Conventional Ammunition in Surplus: A Reference Guide, editedbyJames

Bevan,publishedincooperationwithBICC,FAS,GRIP,andSEESAC,

January2008,ISBN2-8288-0092-X

Ammunition Tracing Kit: Protocols and Procedures for Recording Small-calibre

Ammunition, developedbyJamesBevan,June2008,ISBN2-8288-0097-0

The Central African Republic and Small Arms: A Regional Tinderbox, byEricG.

BermanwithLouisaN.Lombard,December2008,ISBN2-8288-0103-9

Primed and Purposeful: Armed Groups and Human Security Efforts in the

Philippines,by SolimanM.Santos,Jr.andPazVerdadesM.Santos,ajoint

publicationoftheSouth–SouthNetworkforNon-StateArmedGroup

EngagementandtheSmallArmsSurvey, April2010,ISBN978-2-940415-29-8

Table of contents

List of tables, figures, and boxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

About the authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Abbreviations and acronyms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Introduction by Benjamin King. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Exports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Chapter 1: Small Arms and Light Weapons Ammunition: A Look at

Western Producers and Their Markets by Pierre Gobinet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Classifyingtheproducts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Cartridge-based ammunition..................................................................... 25

Non-cartridge-based, explosive ammunition............................................. 26

FeaturessharedbyWesternammunitionproducers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Available production estimates.................................................................. 27

Mass manufacturing ammunition without licensing production............. 29

Ammunition machinery: marketing savoir-faire and exporting

production potential................................................................................... 31

The NATO standard: a business multiplier............................................... 31

Balancing national ammunition independence and market

competitiveness.......................................................................................... 33


OverviewofWesternammunitionmarkets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Company mergers and acquisitions: the lure and supremacy

of the US defence market............................................................................ 36

Armed conflicts and domestic ammunition markets.................................. 37

Old stock purchases and hand loading....................................................... 39

Ammunition contracts.............................................................................. 41

ThemajorplayersinNorthAmericaandEurope...................................... 44

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Chapter 2: Italian Procurement, Exports, and Consumption of Small-

and Large-calibre Ammunition and Munitions by Giacomo Persi Paoli. . . . . . . 54

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Introduction to defence procurement......................................................... 56

Methodology and preliminary observations on procurement.................... 57

Data........................................................................................................... 58

Analysis..................................................................................................... 67

Consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Methodology.............................................................................................. 69

Data........................................................................................................... 69

Analysis..................................................................................................... 70

Exports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Methodology.............................................................................................. 76

Analysis of exports, 2005–08..................................................................... 77

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Chapter 3: An Initial Survey of Small Arms and Light Weapons Ammunition

Production, Procurement, Allocation, Exports, and Transfers by the French

Law Enforcement and Military Services by Pierre Gobinet. . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Frenchammunition-manufacturingcapacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

BackgroundfiguresontheFrenchdefenceindustry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Current trends........................................................................................... 90

Dire straits for French ammunition-manufacturing capacity................... 91

Researchfindings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Allocation to law enforcement services...................................................... 94

National gendarmerie................................................................................ 95

National police........................................................................................... 96

Army units................................................................................................ 98

Estimated combined annual purchase figures for 2009............................ 101

Commercialexportsandtransfersofammunition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Chapter 4: Russian Small Arms and Light Weapons Ammunition

Production, Procurement, and Exports by Maxim Pyadushkin. . . . . . . . . . . . . . . . . . . . . 107

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Methodologyandsources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Productsandproducers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Production,domesticprocurement,andexports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

Small arms ammunition production, procurement, and exports............. 113

Light weapons ammunition production and exports............................... 116

Anoverviewofexports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Endnotes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121


List of tables, figures, and boxes

Tables

Table 1.1 Standardbasicclassificationofarmsintosmallarmsorlight

weapons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Table 1.2 Distinguishingweaponsbytheirammunitioncalibres. . . . . . . . . . . . . . . . . 26

Table 2.1 Confirmedtransactionsin2005andpossiblefuturepurchases

withanestimatedprocurementdatein2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60









Table 2.6 Allocationandconsumptionfortrainingpurposesofammunition

andmunitionsofthelargestbrigadeintheItalianArmy,containing4,500–

5,000soldiers,2005–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Table 2.7 Ammunitionacquisitionandconsumptionofahighlyspecialized

unitoftheItalianArmy,2007–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Table 2.8 Regionalanalysis,invalueandquantity,ofItalianammunition

exports,2005–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78


exportstoAfrica,2005–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79


exportstotheAmericas,2005–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79


exportstoAsia,2005–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80


exportstoEurope,2005–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Table 3.1 Gendarmerieaverageannualprocurementandallocation

figures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Table 3.2 Nationalpolicepurchases,2004–09. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Table 3.3 Averagearmyprocurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Table 3.4 Frenchdefenceandsecurityforcesallocation,2009. . . . . . . . . . . . . . . . . . . . . 101

Table 4.1 MilitarysmallarmsammunitionproducedbyRussian

manufacturers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Table 4.2 Russiansmallarmsammunitionproductionand

exports,2004–08. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Table 4.3 Russianlightweaponsammunitionproductionand

exports,2006–09. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Figure

Figure 1 Varietiesofnon-cartridge-basedammunition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Boxes

Box 1.1 IntergovernmentalregimetoencouragecompetitionintheEuro-

peandefenceequipmentmarket. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Box 1.2 Ensuringfairandequaltreatmentofsuppliersasakeyprincipleof

theCodeofConductonDefenceProcurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43


About the authors

Benjamin King is a consultant for the SmallArms Survey. Previously, he

workedasatechnicaladviserfortheCarterCenterinLakesstate,Southern

Sudan.Hisprofessionalfocushascentredonconflict-trendanalysis,violence

reductionprogrammes,andweaponspolicy.Hehasextensiveexperiencein

projectmanagementandresearchinSudan,Uganda,andChina.Heholdsa

master’sdegreeinInternationalPolicywithaspecializationinconflictreso-

lution from the Monterey Institute of International Studies in the United

States.

Pierre GobinetisaformerFrenchgendarmerieofficer.Hegraduatedfrom

Saint-Cyr,theFrenchArmyAcademy,in1999andsubsequentlyworkedin

thegendarmerieforeightyears.Heservedinseveralriotcontrolandpublic

orderunits,andspent threeyearsasa liaisonofficer toEUROPOL inThe

Hague, Netherlands. He holds a master’s degree from the University of

Portsmouth,UK,andisnowafull-timeresearcherattheSmallArmsSurvey.

Giacomo Persi Paoli is a consultant for the SmallArms Survey and a re-

search fellow at the United Nations Institute for Disarmament Research

(UNIDIR). Previously, he was lead researcher at UNIDIR, conducting the

projectonPost-manufactureMarkingofSmallArmsandLightWeapons,and

aconsultantfortheConventionalArmsBranchoftheUnitedNationsOffice

forDisarmamentAffairsinNewYork.HeisanofficeroftheItalianNavyand

aPh.D.candidateinEconomicTheoryandInstitutionsattheUniversityof

RomeTorVergata.HeholdsanMAinPoliticalSciencefromtheUniversity

ofPisaandanMAinInternationalAffairsandDiplomacyfromtheUniver-

sityofTrieste.

Maxim PyadushkinisaRussiandefenceandaerospacejournalistwritingfor

several Russian and international publications.After his graduation from

theSchoolof InternationalRelationsofMoscow’sMGIMOUniversity in

1995,heworkedinvariouspositionsattheRussianForeignMinistryforsev-

eralyears.In2000–04heworkedasadeputydirectoroftheCentreforAnaly-

sis of Strategies and Technologies, the Moscow-based defence think tank,

whereheranseveralpublicationsaswellasheading theSmallArmsPro-

gramme.HeistheauthoroftheSmallArmsSurveyoccasionalpaper, ‘Be-

yondtheKalashnikov:SmallArmsProduction,Exports,andStockpilesinthe

RussianFederation’,andaregularcontributortoSmallArmsSurveyyearbooks.


Acknowledgements

Onbehalfofalloftheauthors,Iwouldliketoexpressourgratitudetoallof

thosewhoassistedinthispublication.Firstly,weareindebtedtothegovern-

mentagencies,ineachofthecasestudies,thatprovidedvitalassistancetothe

research. In France, the national gendarmerie’s Equipment Procurement

Division,theDirectiondessystèmesd’armes—unitédemanagementopéra-

tionsd’armementterrestresoftheDélégationgénéralepourl’armement,and

thenationalpolice’sBureaudel’armementetdesmatériels techniques are

warmlythankedfortheirtrustandcooperationduringthisproject.Wealso

wishtothankseveralofficialsattheDélégationauxaffairesstratégiquesand

theDirectiongénéraledesdouanes(BureauE2)forgrantingusefultelephone

interviews.InItaly,thepersonnelofboththeParachuteBrigade‘Folgore’and

the9thAssaultRegiment‘Col.Moschin’oftheItalianArmygreatlyassisted

uswiththeiravailabilityandsupportthroughouttheproject,particularlyin

thedatacollectionphase. In theRussianFederation,ourgratitudegoes to

Rosoboronexportforitsresponsetoourinformationrequests.Additionally,

wewouldliketoexpressourappreciationtotheGovernmentofGermanyfor

itscontinuedsupportoftheauthorizedtradechapteroftheSmallArmsSur-

vey’syearbook,the2010editionofwhichincludedthebackgroundpapers

thatcomprisethisvolume.

Manyindividualsalsocontributedtheirtimeandexpertisetoourwork.

PatriceBouveretofObservatoiredesarmements,VadimKozyulinofthePIR

Centre,andNeilCorneyoftheOmegaFoundationprovidedvaluablefeed-

backontheinitialdraftsofthepapers,whileJamesBevan,EricBerman,and

MattSchroederweretherewithguidancealongtheway.AlbertZulkharneev,

MatthiasNowak,andFabioDanieleDonderohelpedfact-checkeachdocu-

ment.And,finally,weareextremelygratefultoAlessandraAllenforhersup-

port indirectingthepublicationprocess,AlexPotter forcopy-editing,and

DonaldStrachanforproofreading.

Benjamin King, May 2010

Abbreviations and acronyms

ATGW anti-tankguidedweaponATK AlliantTechsystemsCHF SwissfrancCoeweb ForeignTradeStatisticsDatabaseDAPN Directiondel’administrationdelapolicenationaleDGA Délégationgénéralepourl’armementDGGN DirectiongénéraledelagendarmerienationaleEADS EuropeanAeronauticDefenceandSpaceCompanyEDA EuropeanDefenceAgencyEUR euroEURENCO EuropeanEnergeticsCorporationGDOTS GeneralDynamicsOrdnanceandTacticalSystemsISTAT ItalianNationalInstituteofStatisticsJorAmmo JordanAmmunitionManufacturingandServicesCompanyMANPADS man-portableairdefencesystem/sNATO NorthAtlanticTreatyOrganizationNGO non-governmentalorganizationOSCE OrganizationforSecurityandCooperationinEuropeR&D researchanddevelopmentRISTA-EW reconnaissanceinformationsurveillancetargetacquisition— electronicwarfareRPG rocket-propelledgrenadeRUB RussianroubleSMS subscribingmemberstateSNPE Sociéténationaledespoudresetd’explosifsUK UnitedKingdomUN UnitedNationsUNROCA UnitedNationsRegisterofConventionalWeaponsUS UnitedStates

USD USdollar


IntroductionBenjamin King

Enumeratingastate’sdemandandsupplychainsforsmallarmsandlight

weaponsammunitionremainsadifficultundertaking.Thisislargelyanout-

comeofmanynations’reluctancetofullydiscloseinformation,togetherwith

pooraccountingpracticesthathidethevalueofthedatainaggregatetotals.

Thisworkingpaperillustratesthesechallengesbydetailingthemostcompre-

hensive picture possible of three countries’ procurement, production, and

exportationofammunitionforsmallarmsandlightweapons.Giventhevari-

etyintransparencyanddisparatemeansofdisclosure,eachresearchertooka

uniqueapproachtowardsfactfinding.Comprehensivedataonprocurement,

production,andexportswasnotuncoveredinanyofthecases,asnoneof

these threecountriescompilesorpublicizessuch information. Instead, the

best information available was gathered through a compilation of sources

fromeachcountry.

Inadditiontocontributingtotheknowledgeonammunitionproduction

andprocurement,anothergoalwastoexaminetransparencyinpracticefor

largeammunition-producingcountries.TheSurveyalreadyevaluatestrans-

parency in exports through the annual SmallArms Survey’s Transparency

Barometer,whichranks44majorsmallarms-exportnations.Intermsofex-

port transparency,thenationsstudiedincludeboththemoderatelytransparent

andoneoftheleasttransparent.ItalyandFrancerank11thand12th,respec-

tively,whiletheRussianFederationisamongthemostopaque,ranking41st

(SmallArmsSurvey,2009,pp.49–50).

Thecasestudiesonlyexamineammunitiondesignedordestinedforstate

securitypurposes.Therefore,alldataappliestopoliceandmilitarypurchases

only.Civilianorillegallytransferredammunitionisonlybrieflyaddressed.

Beforemovingtothecasestudies,theopeningchapterprovidesabroad

overviewofWesternsmallarmsandlightweaponsammunitionproduction

andtradebyexaminingsomeoftheleadingfactorsthatdrivethesupplyand

demand affecting the industry. These are the dynamics within the global

ammunitionmarketasawholethatinfluencethethreesubsequentcasestudies.

Through case studies of three states—Italy, France, and the Russian

Federation—weassesstheirrespectivepracticesintheproduction;procure-

ment;export;and,whenpossible,consumptionofammunition.Theresulting

datanotonlyprovidesascalefortheindustryasawhole,butalsorevealsthe

realitiesoftransparencyandopaquenessintheammunitionmarket.

Someofthekeyfindingsofthispublicationincludethefollowing:

• Thesellingofindustrialknow-howisacommonpractice,givingmanyna-

tions small arms ammunition production capacity. Sophisticated light

weaponsammunitionproduction,however, is limitedtolargeindustrial

powers.

• ThevariouseditionsoftheEuropeanDefenceAgency’sElectronic Bulletin

Board on Defence Contract Opportunities areagoodsourceofpastandfuture

procurementtransactions,althoughtheydohavesomelimitations.

• AmmunitionallocationandconsumptiondatashowsthatItalyandFrance

bothusethegreatestquantityofammunitionstocksfortrainingpurposes.

• Export statisticsoftenpresentaggregateammunitiondata for importing

country,exportingcountry,andbyweight(kilograms)andmonetaryval-

ue.Oftenthequantityandtypeofammunitionarenotrecorded.

• Ammunitionaccountingisoftengroupedwithotherweapons-relateditemsin

amiscellaneouscategory,resultingininexacttotalsforproductionandexports.

• The Russian Federation has a law preventing the disclosure of procure-

mentinformation,forreasonsofnationalsecurity.

Production

Theproductionofsmallarmsandlightweaponsammunitionisamajorin-

dustryand,unliketheproductionoftheweaponsthemselves,isnotlimited

toindustrialpowers.Becauseofthestandardizationofcalibresofsmallarms

ammunition,therelativelylowtechnologicalrequirementsneeded,andthe

industrialpracticeofsellingammunition-manufacturingknow-how,muchof


theammunitioncanbeproducedbynationswith little industrialcapacity.

Sophisticated formsofnon-cartridge-based lightweaponsammunitionare

the exception, however, as the advanced technological requirements limit

productiontolargeindustrialpowers.Eachofthethreecountriesexamined

herehasalargesmallarmsandlightweaponsammunitionindustry,employ-

inghundredsorthousandsofpeopleandcontributingtensofmillionsofdol-

lars to their economies. The ammunition market is confronting numerous

political and economic realities, however. Confronting decreasing defence

budgetsandadjustingtotradeagreementsandconflictsaresomeofthemul-

tiplefactorscurrentlyaffectingthecasecountries.

Self-relianceinammunitionproductionisoftenviewedasanimportant

aspectofanation’soveralldefenceandsecuritystrategy.Yetresultsfromthis

publicationsuggestthatthisbeliefislessferventlyfelt.TheRussianFedera-

tionappearstobeoneofthefewremainingcountriescapableofproducingall

itsammunitionneeds.Amoretypicalapproachtoammunitionacquisition

includeslargequantitiesofimports,asseeninItalyandFrance.Marketcom-

petitionislargelyresponsibleforthisshift.Competitivepricingonstandard-

ized-calibre ammunition and specialized new technologies have increased

incentivestopurchasefromdiverseproviders.Theseforceshavedrivenout

smallarmsammunitionproductioninFranceentirely,whileItalyrelieson

companiesinneighbouringEuropeancountriestosupplyitwithspecialized

lightweaponsammunition.

Procurement

Procurementinformationcanbefoundthroughanumberofsources,includ-

inggovernmentprocurementwebsites,nationalreports,andthemedia.The

mostusefulandconsistentinformationsourceusedbytheauthorswasthe

variouseditionsoftheItalian Defence Contracts Bulletin,whichfollowspro-

curementtransactions.ThisissimilarincontenttotheElectronic Bulletin Board

on Defence Contract Opportunities of the European Defence Agency (EDA).

Ammunitiontypeandquantitiesaregivenbycountry,withwinningbidprices

providedbythesupplier.Overall,thisisatransparentapproach.TheEDA

Electronic Bulletin Boardis,however,voluntaryandlimitedtoEUcountries.

Additionally, a EUR 1 million barrier for reporting presumably eliminates

manysmallarmsammunitiontransfers,asitwouldtakeordersinthemil-

lionsofroundsforthemajorityofsmallercalibrestoreachthatthreshold.

Bulletinboardsare,however,oflittlevalueintotallingtheprocurements

obtained.Countriessupportingdomesticcompaniesdidnotappeartoreport

internalpurchasesinthecasesstudiesexamined.Italianprocurementtrans-

actions posted on the Italian Ministry of Defence website, for instance,

revealednoordersforammunitionfilledbyItalianproducers,yetconsump-

tioninformationfoundthevastmajorityofsuchammunitioncamefromItal-

ianmanufacturers.TheRussianFederation,bycontrast,doesnotreportpro-

curementinformation.Somecompanies,however,diddisclosepercentages

ofammunitionsalesthatwenttothestateandforexport.

Exports

Despitenotedimprovementsbymanynations,oneoftheprinciplefindings

throughoutthecasestudiesisthelackofspecificityindetailingtheammuni-

tiontrade.Thisisparticularlytruefornationalreportingonexportsofammu-

nition. Two layers in the current trade practice hide important details of

ammunition exports. Firstly, ammunition is compiled as one entity under

currentaccountingpractices.AcategorysuchastheItalianMinistryofDe-

fence’s ‘Bombs, grenades, torpedoes, mines, missiles, cartridges and other

ammunitionandprojectilesandpartsthereof,includingbuckshot,shotand

cartridgewads’combinestheentirerangeofitems,i.e.fromshotgunshellsto

120mmmortarbombsandtorpedoes.Thisrestrictsourabilitytoexamine

stateversuscivilianintendedammunition,anti-personnelversusanti-mate-

rialammunition,orevenwhetherammunitionisdesignedforland-orsea-

basedapplications.Furtherdisguisingthefactsofammunitionexportsisthe

factthatsuchexportsareoftenrecordedinan‘other’category,combinedwith

miscellaneousdefence-relateditemsandparts.TheRussianFederation,forin-

stance,usesthecategory‘other’toencompasslargerpiecesofequipment.This

provideslittlemorethanamaximumrangeoftheammunitionexported.


Thesecondlayerofrestrictionsresearchersoftenfaceisaggregaterecords

ofammunition.Ammunition, likeothercommodities, is reportedoftenby

weightand/ortotalvalue.Typically,thetotalquantityofaparticulartypeof

ammunition is leftout.Disregarding typeandquantityseverely limits the

utilityofthedatabydisguisingtheintendeduseoftheammunition.

Conclusion

ThetimingofthispublicationwiththefirstPreparatoryCommitteemeeting

onapossibleArmsTradeTreatyisnotacoincidence.ThisWorkingPaperis

intendedtocontributetothediscussiononstatereportingpractices,which

willbeatopicfornegotiations.Certainly,itcanbesaidthatagreatnumberof

improvements have been made throughout the course of the past decade.

Further steps can nevertheless be taken to increase transparency without

harmingnationalsecurity.

Bibliography

SmallArmsSurvey.2009.Small Arms Survey 2009: Shadows of War.Cambridge:

CambridgeUniversityPress.

Chapter 1 Small Arms and Light Weapons Ammunition: A Look at Western Producers and Their MarketsPierre Gobinet

Introduction

Ahostofacademicandspecializedpublicationshavetackledthesmallarms

and lightweapons issue,either fromaguncontrolandhumanitarianper-

spective,orfromamoretechnical,encyclopedicstandpoint.Comparatively

littlemarketresearchexistsontheammunitiontheseweaponsuse,although

asimplisticsayinghasitthatafirearmwithoutammunitionisonlyanexpen-

siveclub.Ifwelookatanexample,lightweapons,forinstance,haveahigh

impact in themediaandonpublicopinion (SmallArmsSurvey,2008,pp.

8–12),mostlybecauseoftheirammunition’shighlethality,whichgrantsthem

aquasi-politicaldimension.Suchweaponsareextremelyreliantonaproper

supplyofammunition,eitherbecausetheyusemodern,high-valueammuni-

tionorbecausetheirrateoffireissuchthatlogisticshavetobeputinplaceto

makesurethereisaconstantsupplyofammunitionforusersinthefield.Itis

safetosay,therefore,thatammunitionavailabilitygovernsthetypeofweap-

onsusedinmostoftheconflictsaroundtheworld.

Ammunition is, first and foremost, a commodity—a consumable good

ratherthanadurablegood.Thisdefinitionimpliescharacteristicsthatsetam-

munitionapartfromitsintendedrecipients,thesmallarmsandlightweap-

onsthataremanufacturedtofireit.Drawingonarangeofsources,suchas

technicalreviews,specializedacademicpapers,interviewswithmilitaryand

lawenforcementpersonnel,andinformalcontactswithmanufacturers,this

chapterseekstopaintageneralpictureoftheEuropeanandNorthAmerican

ammunitionindustry,therebyvoluntarilylimitingthescopeoftheresearch

andfindingstoWesternammunitionproducersandtheirmarkets.Theau-

thorthushopestointroducethereadertoanarrayofmajorWesternsmall


armsandlightweaponsammunitionproducersandtotheirmarketenviron-

ments.Sinceammunitionisthecoreproductoftheindustry,thenextpartof

thischapterstartsbyestablishinganacademicallysoundammunitionclassi-

ficationmethodthatisrequiredtoadequatelyanalyseammunitionmarkets

andproducerscomparatively.Thefollowingparthighlightsasetofcommon,

recurrentfeaturesthatseemtobesharedbymostlargeWesternammunition

manufacturers.ThefinalpartlooksatthemaincharacteristicsofWesternam-

munitionmarketsandendswithabriefrundownofthemajorcartridgemak-

ersinNorthAmericaandEurope.

Classifying the products

The UN’s 1997 Report of the Panel of Governmental Experts on Small Arms

(UNGA,1997)andthe1999Report of the Group of Experts on the Problem of Am-

munition and Explosives(UNGA,1999)includesmallarmsandlightweapons

ammunitionasanintrinsicpartofthesmallarmsandlightweaponscategory

andrecommendsitsspecificstudy.Accordingtothesetwodocuments,porta-

bleweaponscanbasicallybecategorizedaseithersmall armsorlight weapons,

asshowninTable1.1.

Assuch,andnotwithstandingthecontroversialissueoflandmines,thiscate-

gorizationplacesportabilityasthefactordistinguishingbothsmallarmsand

lightweapons.Thisisnotappropriate,however,whenstudyingammunition.

Aweaponmaybeportablebyasinglesoldier,butifitsrateoffireishigh,then

itwillrequireatremendousamountofammunitionlogisticstobeoperation-

alinthefieldandwillthuslosealltheinitialbenefitsofportability.Further-

more,focusingfirstonammunitionmakesobvioussensewhenstudyingthe

arms-manufacturingbusiness,asitwillusuallydeterminetheblueprintsof

smallarmsandlightweaponsmanufacturinginthelongrun.Weaponsare

madeforacertaintypeofammunition,whereasspecificammunitionisrarely

madeforaweapon.AccordingtoSmallArmsSurveyresearch,themostprac-

ticaldistinctiontomakeintermsofammunitionistoseparatecartridge-based

fromnon-cartridge-basedammunition.Thisthenbreaksdownbycalibreand

guidancefeatures.Giventhesheerdiversityofcalibres,effects,ranges,and

origin,however,thischapterdoesnotpretendtobeadetailedtechnicalover-

viewnoranexhaustiveballisticsinventoryofsmallarmsandlightweapons

ammunition(referinsteadtoCourtney-Green,1991;Allsopetal.,1997;Ness

andWilliams,2007).Instead,basedoncollateddatapublishedbytheSmall

ArmsSurvey(PézardandAnders,2006,pp.24–25),thechapterfocuseson

projectilesmostcommonlyusedbyWesterncountries,includingNATOand

formerWarsawPactstandardcartridgecalibres.

Cartridge-based ammunitionCartridgesareself-containedunitsthatsharefourbasiccomponents:

• cartridgecase;

• primer;

• propellant/powder;and

• projectile/bullet.

Agivencalibrecanbeemployedinmanydifferenttypesofweaponsandwill

havevariousdenominationsaccordingtothecountryoforiginandmanufac-

turer.The.50projectile,forinstance,whichwillbereferredtoas‘12.7mm’

whenusingthemetricsystem,iswidelyconsideredasthethresholdbetween

smallarmsandlightweaponscartridge-basedcalibres.

Table 1.1Standard basic classification of arms into small arms or light weapons

Small arms Light weapons

Revolvers & self-loading pistols

Heavy machine guns and anti-materiel rifles (12.7–20 mm)

Rifles & carbines Hand-held, under-barrel & mounted grenade launchers

Assault rifles Portable anti-tank guns

Sub-machine guns Portable anti-aircraft guns

Light machine guns Recoilless rifles

Portable launchers of anti-tank missiles & rocket systems

Portable launchers of anti-aircraft missile systems

Mortars of calibres less than 120 mm


Table 1.2Distinguishing weapons by their ammunition calibres

Weapons using cali-bres under 12.7 mm

Weapons using calibres 12.7–20 mm

Shotguns Anti-materiel rifles: US Barrett M82

Pistols Heavy sniper rifles

Machine pistols Heavy machine guns: US .50 Browning M-series (M2); Russian DShK

Sub-machine guns Medium calibre cannons

Rifles Objective crew-served weapons/objective individual combat weapons

Assault rifles

Light sniper rifles

Light machine guns

General purpose machine guns

Non-military weapons

Non-cartridge-based, explosive ammunitionThemoreexpensiveandtechnologicallysophisticatednon-cartridge-based

ammunitioncanbedividedintothreegroups.

Guided rocket-propelled projectilesfeaturetwo-stage,solid-fuelrocketmotors

withhigh-explosivetwo-stagewarheadsandshapedchargesandcanbedi-

rectedtowardsthetargetafterlaunchwhileinflight.Thetrajectorycanbeal-

teredinflighteitherbytheoperatororbyanautomatedguidancecontrolsys-

tem,andtheoperatorcanmakeadjustmentstocompensateforthetarget’s

movements.Theseprojectilesaredesignedtohitmobiletargetssuchastanks,

lightvehicles,andaircraft.Therearearestrictednumberofproducersbecause

thenumberofcustomersandthequantitiesrequiredarelowerthanforsmall

armsammunition,andthereareconsiderabletechnologicalchallengesinthe

productionprocess.Theseprojectilesarefiredbyman-portableairdefence

systems(MANPADS)andanti-tankguidedweapons(ATGWs)systems.

Unguided rocket-propelled grenades (RPGs)followthetrajectoryassignedby

thefirerandcannotbeadjustedoncefired.Thisisreferredtoas‘direct’or‘line

ofsight’fire.Ammunitionislaunchedfromtherocketlauncher’sunrifledtube,

Figure 1

Varieties of non-cartridge-based ammunition

Source: Pézard and Anders (2006, p. 24)

sotheprojectiledoesnotspin.Finsareoftenaddedtotheprojectilesforstabi-

lization.Theyallfeatureawarheadsectionandapropellantsectionandare

usedagainstlightandarmouredvehicles,bunkers,orbuildings,andalsoas

anti-personnelweapons.

Thefinalcategory,non-rocket-propelled projectiles,canbefurthersubdivided

intothreedistinctammunitiongroups:mortarrounds(indirect-fireweapons),

rifle grenades (fired from hand-held, under-barrel, or automatic grenade

launchers),andrecoillessriflerounds(notunlikeconventionalartilleryshells).

Features shared by Western ammunition producersAvailable production estimatesDespite the lack of existing and officially reliable information, researchers

havetriedtocompileanacceptableestimateoftheglobalannualvolumeof

ammunitionproduction,oftenwithconflictingresults.In2005ForecastInter-

national(2005)roughlyestimatedtheglobalproductionofsmallarmsammu-

nitionproducedformilitaryforcesat13billionrounds.In2007,accordingto

thesamesource,thecombinedoutputsofEuropeanandAsiansmallarms

ammunitionmanufacturersalonewerebelievedtoaveragearound15billion

roundsperyear(ForecastInternational,2008a;2008b).Thislastfiguresheds

Non-cartridge-based ammunition

Guided rocket-propelled projectiles

Unguided rocket-propelled projectiles

Non-rocket-propelled projectiles

MANPADS ATGWs rPGs Mortarsrifle

grenadesrecoilless

rifle rounds


littlelightontheextentofUSproductionfigures,andalsohighlightsthedif-

ficultyofseparatingdefenceandcivilianammunitionproductionstatistics

forpropercomparativeanalysis.Arecurrentfigureplacestheglobalammu-

nitionoutputbetween10and14billion roundsperyear,whichmeansan

averageofalmost33millionroundsmanufacturedeveryday(OxfamInter-

national,2006).Theindustrialmanufactureofsmallarmsandlightweapons

ammunitionformilitary,security,andpoliceforces,aswellasforciviliancus-

tomeruse,suppliesamodern,globalmarketinvolvingatleast76countries,

withauthorized international transfersaveraginganestimatedUSD4.3billion

annually(SmallArmsSurvey,2010,p.7;OxfamInternational,2006).

Fewammunitionproducersprovideadequatefiguresand,asdiscussed

laterinthisstudy,anumberofcompaniesmanufactureandexportproduc-

tionequipmenttoanincreasingnumberofdevelopingcountries,undoubt-

edlymakingthesefiguresanunderestimate.EuropeandtheCommonwealth

ofIndependentStatescontain36percentofsmallarmsandlightweapons

ammunition-producingstates(SmallArmsSurvey,2005,p.14).Asubstantial

proportionofammunitionproducersarealsobasedintheUnitedStates,in-

cluding the Lake City Army Ammunition Plant, which stands out as the

world’slargestproducerofmilitaryammunition.

Acommonargumentintheacademiccommunityisthattheglobalmarket

for small arms and light weapons ammunition provides the backdrop for

illicitammunitiontransfers,whichcanpotentiallystemfromthe‘authorized’

realmsofproduction,transfers(throughdiversion,forinstance),andofficial

nationalstocks.Exportdataexistsforonly17percentoftheroundsonthe

market,leavingover80percent(upto10billionrounds)ofglobalsupplies

unaccounted for (Oxfam International, 2006, p. 1). The UK-based charity

Oxfamissuedareport in2006analysingammunitionavailability inBagh-

dad’sblackmarket. It foundthatagreatdealoftheavailableammunition

wasnewandoftenofhighquality,withproductiondatesrangingfrom1999

to2004andoriginatingfromfactoriesinEasternEuropeandtheRussianFed-

eration.According to this report, the ammunition was either smuggled in

acrosstheborderordivertedfromimportedsuppliesoriginallyintendedfor

thenewIraqisecurityforces(OxfamInternational,2006,p.8).Thissuggested

thatatthatstagenewlyimportedammunitionwasbecomingwidespread,as

opposedtoearliertimesintheconflictwhen,allegedly,ammunitionoriginat-

edpredominantlyfromexistingIraqistockpiles.

Mass manufacturing ammunition without licensing productionMostmajoractorsshareanumberoffeaturesintheammunition-manufactur-

ingbusiness.Industrializedmassmanufacturingofammunitionhasbecome

the business of modern, profit-oriented companies and industrial plants

activelycompetingforcustomersworldwide.Theirgoalistorationalizeand

optimizearangeofmachinerytomanufactureemptycartridgecases,bullets,

andprimers,aswellasthepropellantorexplosive.Theproductionprocess

canthereforeincludevariousstagesoflargeandsmallcalibreassembly,and

cartridgecaseandbulletmanufacture.Agivenmanufacturermightpurchase

itsammunitioncasingsfromonecompanyandoutsourceothercomponents

suchaspowder,primers,andthepropellantsfromother,separatecompanies.

Thenitsplantwillmanufacturetheprojectileandassemblethefinishedcar-

tridgeusing largelyautomatedmachinery tomelt leadcores; shapebullet

jackets; load primers and powder; and insert the completed rounds into

racks,stripperclips,andeventuallyintosealedboxes.Allthecomponentsare

thenassembledtogetheronthebasisofoptimizedcost-efficiencyandtight

qualitycontrolstandards.Sub-contractorsmayotherwiseberequiredtopro-

vide fully assembled cartridges, and some manufacturers select their sub-

contractorsandcartridgesupplierspreferablyincountriesthatusetheiram-

munition,inordertopromoteoffsetandindustrialbalance(Berman,2010).

Theproductioncapacityofasingleproductionlineiscalculatedonthe

basisofitsmaximumoutput;foratypicalassemblylinethismayamount,for

instance,to130roundsperminute,withapotentialannualoutputcalculated

tobeintheregionof7–12millionrounds(PézardandAnders,2006,p.51).

However,distinguishingwhatispossiblefromwhatisthenormishazardous

becausecomparativecriteriaareseldomapplicablebetweenvariousplants:

Kenya’sOrdnanceFactoriesCorporationinEldoret,whichinitiallyimported

productionequipmentfromBelgiuminthelate1990s,wasreportedtohave

anestimatedannualoutputof20millionroundsofsmallarmsammunition

(Stohl,1998,p.14).Attheotherendofthespectrum,Israel’smainproducer,

IsraelMilitaryIndustries,isreputedtobecapableofproducing1.25million


cartridgesperday,orapproximately500millionperyear(OxfamInternation-

al,2006,p.3).Thecapacityofaproductionlinecanbeevaluatedintermsofa

maximumamountofroundsproducedpershift(e.g.15,000–20,000),butwill

also depend on the number and duration (e.g. eight hours) of the plant’s

weeklyproductionshifts.Higherdemandwilldictateheightenedlevelsof

activity,butproductionwillfluctuate inorder toadapt to routinemainte-

nanceorcompensateforovercapacity.

Oneofthechallengesnowfacedbythesecompaniesandtheirsubsidiar-

ies ispossibledisruptionintheirsupplychains,sincetheyreceivecompo-

nentsfromcountriesworldwide.Delaysinthedeliveryofsuppliescandis-

ruptforecastsandthewholeproductionchain.Thus,themarketleadershave

developedflexibleproductionlinestoswitchtoanotherproductincaseof

delays and manage multiple-contract ammunition requirements issued by

thepoliceorarmy.Forinstance,althoughroundspecificationsdifferforWest-

ernmilitaryandpoliceunits,roundsareusuallymadefromthesamemetals

andmachinedinthesameproductionlines.

Onedefiningfeatureofthismarketistheacknowledgedabsenceoflicensed

productionagreementsforsmallarmsammunition.Onceanoriginalcalibre

designhasbecomewidespread,mostlyonthebasisofNATOorformerWar-

sawPactstandardizationagreementsandpractices,alargenumberofmanu-

facturersaroundtheglobecansetupproductionfacilitiesandstartmanufac-

turingtheroundsbasedontheoriginaldesignstandardswithoutcontractor

royaltiesbeingpaidtotheoriginalmanufacturer(s).Themostfamousexample

isthe5.56x45mmNATOstandardammunition,originallymanufacturedby

Belgium’sFNHerstal,thedesignsforwhichweremadepublictoallowpro-

ductionbyothermanufacturers.Inspiteofthisstandardization,manycontrac-

tors have willingly oriented their marketing towards high-end, high-price

nichemarketstocompensateforhighfixedcostssuchassalariesandresearch

anddevelopment(R&D).Severalsmallarmsammunitionmanufacturersnow

focus theirproduct rangeexclusivelyonadvancedmilitaryandcommercial

variantsofthe5.56x45/.223Rem,7.62x51/.308Win.,and8.6x70/.338Lapua

Magnum.Theproductioncostforatypicalcartridgeisgenerallydividedas:

1/3cartridge;1/3primedcasepluspropellant;and1/3loading,assembling,

andpackaging.1ForacomplexprojectilesuchasNammo’s12.7mmmultipur-

poseround,mostofthefactorycostscovertheprojectile,whereasitscombined

casing,propellant,andprimeraccountforlessthan50percentoftheround’s

manufacturingexpenses(Berman,2010).

Ammunition machinery: marketing savoir-faire and exporting production potentialAnumberofcompanieshavecapitalizedonthelowtechnologicalentrybar-

rierforsmallarmsammunitionproductionandareexclusivelydedicatedto

theproductionandmarketingofammunitionmachinery.Thismarketliteral-

lyprovidesammunitionproductioncapacitiestoitsclientsandaccountsfor

the widespread establishment of ammunition-manufacturing facilities

aroundtheworld.ThetraditionalmarketleadersinthissectorareGermany’s

FritzWerner/MANFerrostaal,France’sManurhin,andBelgium’sNewLach-

aussée(Anders,2005).AccordingtoaGroupederechercheetd’information

surlapaixetlasécuritéstudy,asurprising90percentoftheworld’sNATO-

compatiblemilitaryammunitionmanufacturingplantswereapparentlyset

upandtailoredbyGerman,French,andBelgiancompanies(Anders,2005).

For instance,Turkeyreportedlysignedacontract in2000fortheestablish-

mentofadomesticproductionplantwithsuppliersfromGermany,France,

andBelgiumandsubsequentlyestablisheditselfasanimportantammunition

exporter(AmnestyInternational,2004,p.34).Othercompanieschoosetoex-

tendtheirbusinessopportunitiesbydevelopingtheirownmachineryexport

potential.Forinstance,Bulgaria’sARSENALJSCompanyKazanlak,ontopof

beingamajorregionalammunitionmanufacturer,alsoboastsanengineering

facilityand‘isinvolvedinthetransferofknow-howtomanufactureweapons

andammunition,installsworkshopsandtestsequipmentin[the]customer’s

country,performsqualitycontrol,trainsitspersonnelandgivesanytechnical

assistance’(ARSENALJSCompany,2009).

The NATO standard: a business multiplierThe world’s most distributed calibres belong to two main family groups,

largelybasedonthegeographicaloriginofmanufactureduringthecoldwar

whentheEasternandWesternblocsimposedcompetingammunitionstand-

ards on their allied and satellite countries. These calibres are now largely


standardized,butwillstillusuallybereferredtoaseither‘NATO’or‘Warsaw

Pact’calibres.

TheNATOfamilyincludesfamouscalibressuchas:

• 5.56x45mmNATO;

• 7.62x51mmNATO;

• 9x19mmParabellumNATOor‘Luger’;

• 12.7x99mmor.50BMGBrowning.

TheWarsawPactcalibresarealsowellknown:

• 5.45x39mmWarsawPact;



• 9x17mmWarsawPact;


• 12.7x107mmor12.7x108mmWarsawPact;

• 14.5x114mmRussianmachinegun.

ToindicatethattheirammunitionisproducedaccordingtoNATOdesignand

safetystandards,Westernmanufacturersengraveacrosswithinacircleon

the cartridge cases. This indicates that the ammunition was loaded in a

NATO-approvedfacilityandmeetstheNATOproductionspecificationsfor

that round (NATO, 2009). Standardized cartridges thus facilitate resupply,

weaponsdesign,andcomparison,andultimatelylowerammunitionmanu-

facturingandstoragecosts.Asatokenofhighqualityforsmallarmsammu-

nition,thesymbolalsobecomesmarketable.

Many emerging countries have arms-manufacturing plants that have

beenproducingeitherindigenousorex-Sovietdesignitems,includingam-

munition,foranumberofyears.However,theirexportpotentialislow,as

mostindustrializedcountries,evenonesthatarenotNATOmembers,have

adoptedNATOstandardsfortheirarmiesandnowdemandNATO-compati-

ble goods and ammunition. Thus, manufacturers who do not standardize

theirammunitionproductionmayultimatelyenduprestrictingtheirbusi-

nessopportunities.CountrieswhodochoosetostartproducingNATOstand-

ardammunitionalsosetupexportpromotionboardstoenticestate-owned

ordnancefactoriesintorestructuring,modernizing,andwideningtheirrange

ofproducts.Suchwasthedriveinitiatedin2006byIndiatoboostitsrapidly

decreasingdefenceexports.Accordingtothecountry’sparliamentarycom-

mittee,failuretomanufactureweaponsuptoNATOstandardshadbadlyhit

ammunitionsales.India’s40government-ownedordnancefactoriesrespon-

siblefor itsmainlyindigenousdefenceproduction,whichuptothatpoint

hadonlysuppliedregionalandneighbouringmarkets,hadtobeadaptedand

modernized(Murphy,2005).

Balancing national ammunition independence and market competitivenessHistorically,ammunitionmanufacturinghasbeenanationalprerogativethat

depended on small-scale, state-owned, and often subsidized production

facilities exclusively oriented to meet the domestic demand of a nation’s

armedservices.Productionwasthustailoredtothelatter’sneedsandwas

neitherprofitablenorprofitoriented.Similarly,newentriesintheammuni-

tion-manufacturing business will nowadays often be state sponsored and

aimed exclusively towards the domestic armed forces market. New and

emerging regional production companies often start out with plants that

remain idle between orders of ammunition from their respective govern-

ments. Mzinga Corporation in Tanzania and Kenya’s Ordnance Factories

CorporationinEldoret,forinstance,weresetuptoproducevarioustypesof

ammunitionalongtheselines(PézardandAnders,2006,pp.49,56–57).

Morerecently,andinordertomaketheenterpriseprofitableinthelong

run and face market competitors, the inevitable trend for all small arms

ammunition producers is to consolidate at the national level. This is most

oftenaccomplishedviaamixofstatesponsorship,progressiveprivatization,

foreigninvestment,acquisitions,andjointventures,withaneyeonpossible

exportpotential.AnexcellentexampleisJordan’srecentlyestablishedJordan

AmmunitionManufacturingandServicesCompany(JorAmmo),whichwas

setupasajointventureamongJordan’sKingAbdullahIIDesignandDevel-

opmentBureau,MecarofBelgium,andtheUS-basedDMVHoldings.The

newplant’sinfrastructure,comprisingamodernballisticslaboratoryinthe


vicinityofAmman,shouldquicklygiveJordanself-sufficiencyinbothR&D

and theproductionof conventionalammunition.According to specialized

media sources, this plant is expected to start fulfilling its first Jordanian

armedforcesUSD43millioncontractbymid-October2009anddeliverthe

firstrounds(5.56mm,7.62mm,and9mm)andmortarshells(60mmand120

mm)in2010.JorAmmowillofcourseseektoextendandeventuallyexportits

productrangetomeetdifferentuserrequirements(Foss,2009).

Governmentswhofailtoinjectthisproperbusinessmixoftenrisklosing

theirnationalsmallarmsmanufacturingcapacityinitsentirety.Forinstance,

whereasinItalyallsmallcalibreammunitionconsumedbytheItalianmili-

taryforcesisnationallyproducedbyItaliancontractors(seeChapter2ofthis

study formore information),Francenow lacksa small armsammunition-

manufacturing apparatus and thus imports everything (France, 2007).

Although the French government has kept an industrial manufacturing

capacityformediumandlargecalibresintheformofNextermunitions,ithas

chosen to purchase and import all of its small calibre ammunition from

abroad(seeChapter3ofthisstudyformoreinformation).

Themonopolyofstatesoverammunitionproductionandprocurement

has waned. The globalization of the ammunition market has undeniably

alteredthepredominanceofstatesinthisbusiness,toapointwheretheynow

actpredominantlyasclientsratherthanproducers.Thisoccursdespitethe

factthatmanygovernmentsretainasizeablenumberofsharesintheircoun-

try’s arms-manufacturing companies. The contractors, on the other hand,

havebecometherealactorsoftheweapons-manufacturingmarket.Compa-

niesnowinvestmoneybymodernizingnationalandstate-ownedproduction

facilities,allowingthemtobothguaranteenationaldemandforammunition

andincreasetheircapabilitytosupplyexportmarkets.

Still, someof the largestcontractors,despite their thrustandnecessary

presence on the international ammunition market, have kept their role as

exclusive providers of their countries’ armed forces’ ammunition require-

ments.Thisallowsclientstoprotecttheirammunitionsupplybaseafterpri-

vatization. It also enables them to take advantage of ceiling prices for a

number of years, while benefitting from ‘surge manufacture’ to support de-

mandingoperationalcircumstancesastheyarise.Forinstance,theUKstruggled

foryearswithitsgeneralmunitionscapabilities.WhenBAESystemsacquired

thenewlyprivatizedRoyalOrdnanceoperationin1987,thelatteremployed

19,000peopleandcomprised13ageingmunitionsplants.Whileforeignman-

ufacturerswereopenly invited to tender forUKammunitionprogrammes

andrequirements,theRoyalOrdnancefactoriesrefusedtobidabroadforfear

ofeventuallybecomingdependentonoverseassuppliers,whocouldcutoff

somesuppliesintimesofcrisis.Today’sRoyalOrdnancecapacitystandsat

threeplantsandbarely1,700employees(Foss,1993;Chuter,2008).In2008,

BAESystemssealeditscontributiontotheUKMinistryofDefencewiththe

MunitionsAcquisitionSupplySolutiondealtosupplythenation’sarmywith

upto80percentofitssmallarms(5.56mmand7.62mm),mortarbombs(81

mm),mediumcalibre,tank(120mm),artillery(105mmand155mm),and

navalgunammunitionoverthenext15years,adealreportedlyworthupto

USD5.6billion(Chuter,2008).EquallyasimportantisBAESystems’contin-

ued commitment to substantially upgrading, modernizing, and increasing

thecapacityoftheBirtley,Glascoed,andRadwayGreen(thelatterbeingthe

UK’sonlylocalsourceofmilitarysmallarmsammunition)RoyalOrdnance

productionfacilitiesoverthenextfiveyears,threesitesthathaveheavilycon-

tributedtotheUK’ssupplyofammunitionforuseinAfghanistanandIraq.

Accordingtospecializedsources,someoftheseimprovements involvethe

purchaseofnewmachinery,suchasforgesandroboticmachiningcells;the

demolitionofoldfacilities;andtheirreplacementwithenergy-efficientplants

(Cowan,2008).TheseinvestmentscontributesignificantlytotheUK’sammu-

nitionindependenceandsupply,butalsodrasticallyincreasethecompany’s

overseassalespotential.

InNorthAmerica,mostammunitionisproducedbygovernment-owned

contractor-operatedmanufacturingplantsthatareownedbytheUSgovern-

mentbutallocatedtoandoperatedbyaprivatecompanyforadefiniteperiod.

Thisallowsbothentitiestolookaftertheirinterests,whileperformingduties

forwhichtheyarebestsuited.Thegovernmentestablishesrequirementsand

retainsitsammunitionsupplybaseforuseincaseofanationalemergency.

Thecontractorshavetocompetefortheinitialdealandthenmanagethefacili-

tiestoimplementammunitionproduction.Themostfamousexampleofthis

partnershipistheAlliantLakeCitySmallCalibreAmmunitionCompany,a


subsidiaryofUS-basedpropulsionsystemsandmunitionsspecialistAlliant

Techsystems(ATK)ArmamentSystems,whichbeganworkingwiththeUS

ArmyandPentagonontheLakeCityPlantin2000.Overtheyearsthefacility

hasbecomethecountry’smainsourceformilitarysmallcalibreammunition

procurementandisreportedtohaveincreaseditsproductionto1.4billion

roundsperyear,includingupgradesto5.56mm,7.62mm,and.50calibres.In

2009theUSArmyawardedATKaUSD481millioncontracttocontinuerun-

ningtheLakeCityPlantuntil2013(Greene,Holt,andWilkinson,2005,p.13;

Osborn,2009a).

Overview of Western ammunition marketsCompany mergers and acquisitions: the lure and supremacy of the US defence marketDataregardingammunitionmanufacturersisconsistentlyaggregatedwith

moregeneraldefenceindustryfigures,makingitdifficultforresearchersto

distinguish conflicting or opposing trends. Furthermore, overall defence

spendingmaynotnecessarilyreflectammunitionexpenditures.Theglobal

ammunitionmanufacturersindustryischaracterizedbyunendingmergers

and consolidations to ensure continued profitability and competitiveness,

thusresultingintheprogressiveemergenceoffewerbutlargertransnational

producers. Available open-source information on the defence industry in

generalreflectsthepredominanceofatightcircleofUSandEuropeanindus-

tryactorsfightingforcorporatesupremacyandstrategicacquisitionstogain

strongfootholdsinnewandpotentiallypromisingdefencemarkets.Tosus-

taintheirmanufacturingmarginsandprofits,ammunitionmakerseitherin-

vestintheirownorganicgrowthwithin-countryacquisitionsorexpandtheir

presenceinnewkeyinternationalmarketsthroughvariousacquisitions.

ArecentJane’s Industry Quarterlyreportontheglobaldefenceindustry’s

mergers and acquisitions for 2008 confirms the US defence market as the

main arena for the acquisition of defence manufacturing assets, attracting

morethanhalfofglobaltransactions(Jane’sInformationGroup,2009).Again,

theammunitionmanufacturers’actualcontributiontotheseacquisitionfig-

uresremainstobethoroughlyquantified.Majorammunitionproducers,spe-

cificallyUKfirmssuchasBAESystemsorChemring,areactiveplayersand

aggressiveUSDepartmentofDefensecontractors,forinstance,asBAESys-

tems’ USD 4.53 billion takeover ofArmor Holdings attests. The European

market, on the other hand, suffers from intra-community export barriers,

whichmayexplainwhyacquisitionsintheEuropeandefencesectorremain

mostlydomestic:66percentofacquisitionfundsinvestedinEuropebyEuro-

peancompaniesremainedwithinnationalbordersin2008(Jane’sInforma-

tionGroup,2009).Europeancross-borderactivityisspearheadedbytheDus-

seldorf-based landsystemsandammunitionmanufacturerRheinmetall. In

thisregard,Rheinmetall’sacquisitionof51percentofSouthAfrica’sDenel

Munitionsin2008isagoodexample.Germanfirmsalsoaccountedfor31per

centofdealsintheEuropeanlandsystemssectorin2008andclearlycontrib-

utetoindustryconsolidation.WhileEuropeandefencecompaniesaremainly

rootedinthecontinent,thistrendmaychange,sinceanincreasingproportion

oftheirrevenuesarederivedfrommarketselsewhere,partlyasaresultofac-

quisitionsactivityintheUSmarket.Aninterestingdevelopmentmentioned

bythereportisthatinvestmentsandacquisitionsfundsnolongerflowevenly

inbothdirectionsacrosstheAtlantic,andthegulfbetweentheflowoffunds

eastandtheflowwestisrapidlywidening.‘ForeverydollarinvestedbyEu-

ropeansinthepurchaseofUSdefenseassetsin2008,USfirmsspentjustover

twocentsintheEU’(Jane’sInformationGroup,2009).

Armed conflicts and domestic ammunition marketsAmmunition procurement patterns ultimately reflect a country’s political,

geopolitical,andmilitaryactivities.Similarly,currenteventssuchaswars,re-

gionalconflicts,politicalelections,orperiodsofeconomicuncertaintywill

inevitablycauseammunitionmanufacturerstoadapttheirproductionand

pricesaccordingly.Thiswillultimatelyreflectonend-userrates.Forinstance,

manyauthoritativefieldreportsin2006documentedtheincreaseintheprice

ofbulletsinwar-tornSomaliatoarecordUSD1.50perround,mainlyattrib-

utedtothelocalwarlordsstockinguponammunitioninanticipationofan

upsurgeinfightingandimminentarmedclashes(OxfamInternational,2006,

p.1;BBC,2006).Conflictsare,ofcourse,knownasmarketmultipliersforthe


ammunitionindustry,andfiguressuchastheserevealjusthowmuchdistrib-

utorsandarmsbrokerscanprofitfromthem.

However,itisjustasinterestingtostudyhowthesefactorsmayaffectthe

marketupstream,inthecountrieswherethisammunitionisoriginallymade

and marketed. Once again, most of the available open-source information

portraysthemarketsituationintheUnitedStates.Forinstance,areportpub-

lishedinJanuary2007expectedtheUSmarketforsmallarmsandammuni-

tionmanufacturingtoreachUSD6.5billionby2012(SpecialistsinBusiness

Information,2007).However,despiteareported10percentincreaseintheUS

smallarmsandammunitionmarketin2007,thereportsummarypredicted

thatcivilianandmilitarycustomerdemandwouldsubsequentlylullin2008

duetothecountry’seconomiccrisisandstabilizedtheatresofoperationsin

IraqandAfghanistan.Thistrendwouldnowneedtobevalidatedwithactu-

alizeddata.Oneimportantissuehighlightedbydistinctsourcesrelatestothe

impactoftheUSmilitary’sheavydeploymentsoftroopsoverseas,morespe-

cificallyinIraqandAfghanistan,whichallegedlyuseupmorethanabillion

roundsayearforbothtrainingneedsandfieldoperations(Thompson,2007).

Accordingly,ammunitionproducers increased theiroutputsignificantly in

thelastthreeyearstomeetthisdemand.ThenationalUSammunitionpro-

ductionfacilitiesinLakeCityweredriventothelimitandarmyprocurement

authoritiespurchasedadditionalammunitionfromtherecreationalindustry

(notablyOlinWinchesterandIsraeliMilitaryIndustries)toprovidelive-fire

trainingandcombatroundstoregulartroops,andcombatservicesupport,

reserve,andNationalGuardunitspreparingfordeploymentinAfghanistan

andIraq(Galloway,2004).

TheUSArmy’sheavydemandforammunitionfollowingthestartoftheIra-

qiandAfghanconflictscoincidedwithpolicedepartmentsnationwideincreas-

ingtheirowntrainingneedsfollowingthe11September2001terroristattacks.

This surge in the nation’s ammunition requirements also occurred at a time

whenthepricesofcommoditymetals,likebrass,copper,andlead,usedtomake

ammunitionweresoaringduetohighinternationaldemandfromvariousin-

dustrialsectors.Consequently,manyUSpoliceandsheriffs’departmentsen-

counteredskyrocketingprices,ammunitionshortages,anddrasticprocurement

anddistributiondelaysfromcommercialmanufacturers.Asaresult,manywere

forcedtoreducetheirpersonnel’smandatoryhandgunandrifleshootingprac-

ticeinordertosaveammunitionforoperationalneeds.Policeprocurementof-

ficersnowhavetoanticipateordersandnegotiatelong-termcontractstohold

pricesdown.Againstabackdropofhighdemand,allthiscurrentlypointstoa

significantshortageofammunitionintheUnitedStatesforpolicedepartments,

specificallythe.223rifleround(Thompson,2007).

TheUSpublic’suncertainperceptionoftheirpersonalsafetyandsecurity

isoneofthemostinfluentialfactorsthatcanleadnewownerstobuyweap-

onsandenticecurrentownerstoaddtotheiralreadyexistingprivategunand

ammunitionarsenal.Inthisregard,thecivilianammunitionmarketfollowed

trendsofitsown,especiallyafterthepresidentialelectionandunfoundedap-

prehensionthatthenewDemocraticPartyadministrationwouldconspireto

implementnewtaxesandstrengthenregulationsonthepurchasingofam-

munition. Specialized gun shops, Internet sites, and recreational shooters’

blogsclearlymentionthe‘Obamaeffect’torelatethewayNorthAmerican

gunownershavebeenmassivelybuyingupbulkammunitionsupplies,spe-

cifically.223,5.56NATO(usedbytheM16riflevariants),and7.62x39mm

ammunition. Consequently, this drained retailer stocks, regardless of their

ratesandof the current (2008–2010) recession (Johnson,2009;Stewartand

Burton,2009).Prices,orders,andretailerbacklogshaveapparentlygoneoff

thechartsforboththeweaponsandtheirrespectiveammunition.According

tovariousretailersandgunshops,civilianretailpriceshavesurged20–150

percent inthepastseveralyears,dependingonthetypeofammunition

(Ullmer,2008). Ironically,media reports ratherhint that theelectionofa

Democratic Party administration may ultimately have strengthened the

firearms and ammunitions industry at a time when all the other sectors

wereplummeting.

Old stock purchases and hand loadingAs in the car market, for instance, much of the worldwide civilian and

militarydemandforammunitionismetbyoldstocks.Inthecaseofmilitary-

gradeammunition,purchasingfromoldstockshasseveraldistinctadvan-

tages.Troopsinanoverseastheatreofoperationscanbeissuedwithammuni-


tion purchased locally, thus saving precious logistical time, as well as

manufacturingandshippingcosts.Indigenousforcescanalsobeprovided

withammunitionpurchasedfromlocalorregionalstockpiles,oftenthestock-

pilesofformerSovietblocstates.

Ontopofthepreviouslymentionedadvantages,manyoftheseforces

stilluseformerWarsawPactweaponryanditscorrespondingammunition,

andthuscannotbeissuedNATOstandardammunitionandsupplies.For

instance,mostAfghanweaponryisSoviet-era-designedandthuscompati-

blewithRussianammunition, rendering shipments from Western coun-

triesuseless.Ironically,in2006,atatimewhenmostUSlawenforcement

agencies were experiencing severe shortages of ammunition, the Bush

administrationreportedlysoughttospendanestimatedUSD400million

topurchasevastamountsofRussianstocksofammunitionfromRosoboro-

nexport to supply theAfghan NationalArmy in the event that the next

DemocraticPartypresidentwoulddecidetopullUStroopsoutofthecoun-

try after the 2008 US presidential election. Sources mentioned ‘a vast

amount of ordnance, including more than 78 million rounds of AK47

ammunition, 100,000 rocket-propelled grenades and 12,000 tank shells’

(Harding,2006).

Furthermore,purchasingfromoldammunitionstockpilescanleadtocon-

troversialqualitycontrol,dubioustraceabilityissues,andprocurementfraud.

Forinstance,theNew York TimesandAgenceFrance-Pressereportedthatbe-

tweenMarchandDecember2007theUSArmyhadplacedordersformore

thanUSD223millionofmunitionswithAEYInc.,ahithertounknowncon-

tractoroperatingoutofMiamiBeach,Florida,andheadedbya22-year-old

president,EfraimDiveroli (Mannion,2008).Accordingto thecontract, this

ammunitionwasintendedtosupplyAfghansecurityforceswithammunition

originatingfromHungarianstockpiles.On-siteinvestigationinAfghanistan

revealedthat,underthecoveroffakecertificates,AEYwasinfactproviding

Afghan forceswith40-year-oldChinese-made7.62 rounds indecomposing

packaging,andoriginatingfromAlbania.Theinvestigationshowedthatthe

contractorhadbeenpurchasingweaponsandmunitionsfortheAfghanisin

Bulgaria,Romania,theCzechRepublic,andSlovakiaformorethanadecade.

AEYwassubsequentlysuspendedfromfuturecontractingwithUSgovernment

agencies,butthisstillraisesthequestionofhowthiscontractorwasvettedby

USauthoritiesinthefirstplace.Furthermediainterestshowed,forinstance,

thatAEYwaslinkedtoanumberofdubiousammunitiontransactionsforthe

AfghangovernmentwiththeSlovakcompaniesZVSHoldingandPetinaIn-

ternational,andthatAEY’stransactionshadbeeninvestigatedinAlbaniaand

Hungary(Nicholson,2008).

Thecivilianammunitionmarketalsobenefitsfromcheaper,oldstockpile

ammunition.Goinga step further,however, avidhunters, sportsmen,and

shootingenthusiastsalikeprefertoassembletheirroundsathomewithap-

propriatetoolsandmaterials.Self-assemblyand‘handloading’forsportand

huntingpurposesbyresizingandrefillingemptycartridgeswithprimer,pro-

pellant, casings, andbullets ismuchcheaper thanbuying fullyassembled

ammunitioninashop.SourcesestimatethatforaboutUSD100,someonecan

buy enough supplies to make 1,000 ‘hand-loaded’ home-made cartridges

(CBCNews,2008).Thereare,however,nousefulofficialstatisticstodeter-

minetheextentofreloadingintheNorthAmericansportshootingcommuni-

ty,andmuchlesssoworldwide.

Ammunition contractsIntheUnitedStatesandWesternEurope,potentialammunitioncontracts,in

theformofpublicinvitationstotender,areusuallydisclosedandadvertised

publiclybylaw,andaretherebyaccessibleonmostgovernmentwebsitesand

inspecializedperiodicals(seeBox1.1).Majorprocurementcontractsusually

involvesubstantialamountsofammunitionbeingproducedanddelivered

overseveralyears,andareusuallyincludedaspartofanoverarchingarms

procurementcontract.Forinstance,acountry’sministryofdefencemightin-

vite20ormorecompaniestobidforarangeofsmallarmsandmortarammu-

nitioncontractscoveringagivenprocurementcycleofuptofiveyears(Foss,

1993;Berman,2010).Requirementswillincludevarioustypesofsmallarms

ammunitionadaptedtothecountry’sstandardassaultrifle(e.g.theFrench

FAMASortheBritishSA80).Contenderswillapplyfordifferentpartsofthe

contractrequirementsandadvertisetheirproductioncapacitiestoadjustto

theclient’sdesignspecifications.Theagencyissuingtheinvitationcanorder


oneortwohundredthousanddollars’worthof‘testlots’withsmallprelimi-

narycontractsinordertoevaluatevarioussetsofsmallarmscalibreammuni-

tionavailableonthemarket.Oncethedefinitivetendersareselected,deliver-

iescanbeexpectedtostartthefollowingmonthorshortlythereafter(Foss,

1993)(seeBox1.2).

Thecostofsuchhugecontractsexplainswhymostofthecontractors’client

baseismadeupofwealthy,establishedstates,defenceministries,andtheirre-

spective procurement agencies. Dealing with newly formed, struggling—or,

worsestill—illegitimategovernmentscanultimatelyjeopardizemulti-year

contractswithunsolvabledebtissues.Forinstance,in2007,underintense

secessionistpressurefromtheLiberationTigersofTamilEelam,theSriLankan

UnitedNationalFrontauthoritiesbrokeamilitaryammunitionsupplyagreement

withChinaNorthIndustriesCorporationthathadbeensignedin1992,andsigned

anewUSD37.6millionammunition(mostlyformortarandcannonshells)pro-

curementdealwiththeChineseconglomeratePolyTechnologiesinstead,leaving

overUSD200millionindebtfromtheoriginal1992agreement(Karniol,2007).

Box 1.1 Intergovernmental regime to encourage competition in the European defence equipment market

The intergovernmental regime was launched on 1 July 2006 with the participation at that

time of 22 of the 24 Member States of the European Defence Agency (today with the

participation of 25 out of 26 Member States—all except Romania) plus Norway.

The voluntary intergovernmental regime is operated on the basis of the Code of

Conduct on Defence Procurement (CoC), approved by Defence Ministers on 21

November 2005 to cover defence equipment purchases where the provisions of Article

346 of the TFEU are applicable. The Electronic Bulletin Board—Government Contracts,

also launched on 1 July 2006, is a key element of the defence procurement regime and

provides an historic opportunity for suppliers across Europe to bid for defence contracts

advertised by subscribing Member States. The CoC is underpinned by a robust reporting

and monitoring system to help ensure the guiding principles of mutual transparency and

mutual accountability among subscribing Member States are being maintained in order to

gain the confidence that the regime is working as intended.

Working alongside the CoC is the Code of Best Practice in the Supply Chain (CoBPSC)

which was approved ... on 15 May 2005[.] The CoBPSC extends the benefits of greater

competition through the supply chain, especially [to] lower tier companies and SMEs

[small and medium-sized enterprises] who may not be able to bid for contracts directly

but could act as sub-contractors. Its supporting electronic tool[,] the Electronic Bulletin

Board—Industry Contracts (IC)[,] was launched on 29 March 2007 in the common

interface for the Defence Contract Opportunities set in the Defence Agency’s website to

enable Prime Contractors and commercial buyers to advertise sub-contract opportunities.

On 20 September 2006, the EDA Steering Board also agreed important new elements

to support the development of a truly European Defence Equipment Market, by enhanc-

ing Security of Supply and Security of Information across national borders. Member States

subscribing to the regime have committed themselves to endeavour to meet requests from

fellow Member States for goods and services during an emergency, crisis or armed

conflict, including from their own stocks if necessary. Agreed also were rules governing

the security of classified and commercially sensitive information relating to defence

procurement.

Source: Quoted in its entirety from EDA (2008)

Box 1.2

Ensuring fair and equal treatment of suppliers as a key principle of the Code of Conduct on Defence Procurement

New defence procurement opportunities offered by subscribing member states are

notified on one single portal that deals with ‘invitations to tender’. Each invitation to

tender briefly describes the requirements, the procedures, the timescales for the competi-

tion and the award criteria, and links to national websites or provides other directions to

where full documentation can be obtained. A standard format announcement is also

posted when a contract is awarded. In the conduct of the competition itself, fair and

equal treatment will be assured in:

• selection criteria. All companies will be evaluated on the basis of transparent and

objective standards, such as possession of security clearance, required know-how and

previous experience;

• specifications and statements of requirements. These will be formulated as far as possible

in terms of function and performance. International standards will, wherever possible, be

included in the technical specifications rather than national ones or detailed and specific

company-linked requirements;

• award criteria. These will be made clear from the outset. The fundamental criteria for the

selection of the contractor will be the most economically advantageous solution for the

particular requirement, taking into account considerations of costs (both acquisition and

life cycle), compliance, quality and security of supply and offsets;

• debriefing. All unsuccessful bidders who so request will be given feed-back after the

contract is awarded.

Source: EDA (2005)


The major players in North America and Europe

Someoftheworld’slargestammunitionproducersarelocatedinNorthAmerica.

ArecurrentheavyweightactorintheUSammunitionmarketistheMinneapolis-

basedpropulsionsystemsandmunitionsspecialistAlliantTechsystems(ATK),

whichmanufacturesgunsinMesa(Arizona),aswellassmallarmsandmedium

calibreammunitioninLakeCity(Missouri)andRadford(Virginia).Assuch,the

government-owned,contractor-operatedLakeCityArmyAmmunitionPlantlo-

catedinIndependence,JacksonCounty,Missouri,istheworld’slargestproducer

ofmilitaryammunitionwithaquasi-monopolyontheUSandinternationalam-

munitionmarket.Currentlycomprisingmorethan400buildingsandover2,550

employees, theplantopened in1941andwassuccessively runbyRemington

ArmsCompanyandOlinCorporation.Since1941itsactivitieswereonlyinter-

ruptedforafive-yearperiodbetweentheendoftheSecondWorldWarandthe

beginningoftheKoreanconflict.ATKnowoperatestheplant,whichachieveda

recordannualoutputof1.3–1.4billionrounds(mostly5.56mm,7.62mm,.50,and

20mmcartridges)in2005,therebyquadruplingits2001productionratetomeet

increaseddemand(ATK,2005).Earlierreportsplacedtheplant’smaximumca-

pacityatfourmillionroundsaday,‘threeeight-hourshiftsaday,sixdaysaweek’

tomeettheincreaseddemandforammunitionsincethe11September2001at-

tacksandtheUSinvolvementinAfghanistanandIraq(Galloway,2004).Produc-

tionof.50roundshasincreasedtwelvefoldsincetheUnitedStatesinvadedIraqin

early2003(Hindo,2008).

ThesuccessivecontractsawardedtoATKusuallycomprisebothammunition

productionandfacilityrefurbishmentormaintenance.Forinstance,inearly2007,

theUSArmySustainmentCommandinRockIsland,IllinoissignedaUSD284

millionsmallcalibreammunitioncontractwithATKandawardedanadditional

USD46millionforplantmodernization(Daly,2007).InMay2008ATKArma-

mentSystemssecuredaseriesofsmallcalibreammunitioncontractswiththe

USArmytotallingUSD252million,withUSD205.8millionofthisamountas-

signedtofinancetheproductionof522millionroundsof5.56mm,7.62mm,

and.50ammunitionfortheUSArmy,tobecompletedattheLakeCityplantby

30September2009(Lindley,2008;McFarlane,2008).InJanuary2009ATKre-

ceivedanadditionalUSD49millioninstallmentfromtheUSArmySustainment

Commandtomodernize,upgrade,andcomputerizetheplant’sproductionfa-

cilities in order to improve efficiency (Associated Press, 2009). On 7August

2008ATK’sArmamentSystemsDivisionreporteda32percentincreaseinsales

forthe lastquarter, toUSD442million,whileprofits jumped53percent, to

USD 44 million. The value ofATK shares doubled in the period 2004–08 to

aroundUSD106pershare(Hindo,2008).Followingaseriesofdomesticandin-

ternational procurement contracts totalling USD 88.5 million in November

2008,thecompanyannouncedasalesincreaseof11percenttoUSD2.2billion

duringthefirstsixmonthsof2008(Wagstaff-Smith,2008),reflectingthehigh

demandformediumcalibreandmilitarysmallarmsammunition.Inearly2009

theUSArmyalsocontractedATKtoproduceUSD87millionworthofnon-

standard7.62mmammunition,.50ammunition,mortars,andsmallrocketsto

beshippedtotheAfghanNationalArmyinthesameyear(Osborn,2009b).De-

spitethefactthatmilitarysalesmakeupmostoftherevenuesofATK’sArma-

mentSystemsDivision,thecompanyisalsoactiveonthecivilianammunition

marketandinvestssubstantialamountsinmarketingtoenticepoliceofficers

andsporthunters.Thisefforttocatertocivilianclientsmayproveusefultobal-

anceaninevitablereductioninthedivision’smilitarysalesifthenumbersofUS

troopsarereducedinIraqandAfghanistan.Accordingtospecializedsources,

ATKproducedmorethanfivebillionroundsforhuntingandpoliceusein2006

(Thompson,2007).Since2000thecompanyhasuseditsstakesintheLakeCity

plant to enter the highly competitive civilian ammunition consumer market

withpremium-graderoundsandbrightlycolouredboxes.

Despitetherisingcostsofrawmaterials,therepercussionsonammuni-

tionprices,andtherecurrentreportsthatthehuntingmarketisdwindling,

ATKstillretailsitsFederalPremiumammunitionforasmuchasUSD70fora

boxof20andmanagestooutsellWinchesterandRemington(Hindo,2008).

The rest of the US military’s small calibre ammunition is reportedly pro-

duced,viavarioussub-contractors,byATK’smainammunitioncompetitor,

GeneralDynamicsOrdnanceandTacticalSystems(GDOTS),basedinFalls

Church,Virginia,adivisionofGeneralDynamicsCorporation.Anumberof

contractshighlight thenational stakesatplay in thefight forammunition

productionsupremacy,andalsopointtothewilloftheUSArmy’sFieldSup-

port Command to keep two separate contractors at hand to diversify its


ammunitionsourcesandnotdependsolelyonATK’sLakeCityammunition

factory.InAugust2005GDOTSwonaUSD1.2billionsmallarmsammuni-

tionarmycontracttoserveasasecondarysource,abletoproduce500million

roundsannually(GeneralDynamics,2005). InAugust2006GDOTSwona

USD188millionUSArmycontractcoveringtheproductionofavarietyof

smallarmsammunitionsuchas5.56mm,7.62mm,and.50rounds,tobecom-

pletedanddeliveredayearlater(GeneralDynamics,2006).In2007GDOTS

wonaUSD44millionUSArmyFieldSupportCommandcontracttosupply

5.56mm,7.62mm,and.50ammunitionfortrainingpurposesandoperations

inAfghanistanandIraq(GeneralDynamics,2007).

Düsseldorf-basedRheinmetallisoneofEurope’slargestsuppliersofland

forcestechnology(Newdick,2008a).Its21-square-mileweaponsandmuni-

tionsproductionplantemploysabout1,100workersbasedinUnterlüss in

north-westernGermany,inthevicinityofthreemajorNATOtrainingareas.

ThegroupreportedmorethanEUR4billion(USD5.4billion)innetsalesfor

2007,andexpanded its internationalmarketrangebypurchasingmajority

sharesinSouthAfrica’sDenelMunitionsin2008.Thecompanyalsoenjoysa

strongpresenceintheUnitedStates,asattestedbytheUSD259millionUS

Marine Corps contract signed in June 2008 to supply 40 mm rounds

(Newdick,2008a).Infact,Rheinmetallplacesparticularmarketemphasison

40mmammunition,withfourmillionroundssoldworldwidein2008.

Norway’sNordicAmmunitionCompany(Nammo),withmorethan1,900

employeesspreadover18productionsitesin7countries,canalsobeconsidered

a major European small arms and light weapons ammunition manufacturer.

Withanactivepresence inNorway (NammoRaufossAS),Sweden (Nammo

SwedenAB),Finland(NammoLapuaOy),Switzerland(MTHSA),Germany,

andtheUnitedStates,Nammoregistereda14percentgrowthrateinrevenues

in2008,increasingitssalestoUSD474.2million(upfromUSD416millionin

2007)(Nammo,2009;O’dwyer,2009).In2008roughlyathirdofNammo’ssales

wereattributedtothedomesticNordicmarket,anotherthirdtootherEuropean

markets,andtheresttotheUnitedStatesandCanada.AUSD94millionFinnish

multi-yearammunitioncontractsignedinearly2009confirmstheimportance

ofregionalsalesforthecompany.However,therecentacquisitionofArizona-

basedTalleyDefenceSystemsalsoshowsthecompany’swillingnesstotackle

theNorthAmericanammunitionandweaponsmarket(O’dwyer,2009).Moreo-

ver,Nammohasfoundanichetorideoutthe2008–10economiccrisisandgain

new customers in the process: following the signature of the Convention on

Cluster Munitions on 3 December 2008 in Oslo, the company signed cluster

weapon demilitarization contracts with Norway, Germany, and the NATO

MaintenanceandSupplyAgencyandnowdedicatesoneofitsfivecoreoperat-

ingdivisionstothetask.Thismayprovetobeaninterestingperspectiveforam-

munitionmanufacturerswishingtodiversifytheirserviceportfolio.

Switzerland’s RUAGAmmotec represents a third important actor in the

Western European ammunition manufacturing industry. Headquartered in

Bern,withproductionfacilitiesinGermany,Sweden,andSwitzerland,RUAG

hasthreedivisions:AviationandSpace,DefenceandSecurity,andAmmuni-

tionandProducts.Withaworkforceof6,050employees,theRUAGgroupre-

cordedsalesofCHF1.41billion(USD1.22billion)in2007(Newdick,2008b).In

December2008thecompany’sacquisitionactivitywasboostedbythetakeover

oftheHungariancompanyMFS2000,asupplierofsmallcalibreammunition.

TheRussianFederationtraditionallyboastsmajorammunitionproduc-

tionplants.TheBarnaulMachine-ToolPlantis,forinstance,oneofthelead-

inghistoricalproducersofindustrialgoodsandammunitioninthecountry.

The company website states that its main activity is the manufacturing of

sportingandhuntingcartridgesforriflesandshotgunsandclaimstobeone

ofthelargestsuppliersofcartridgesintheRussianFederation,withagrow-

ingexportmarketintheUnitedStates,Europe,andAsia(BarnaulMachine-

ToolPlant,2000).TheTulaCartridgeWorksisequallyfamousandhasbeen

manufacturingalltypesofammunitionforover100years.Theplantisthe

originalproduceroftheWOLFammunitionbrand(Cushman,2007b),which

hasbeenavailableintheUnitedStatesforyears.

Conclusion

Acquiringdataonsmallarmsandlightweaponsammunitionisajustifiable

goalinthelongrun,butmayturnouttobeproblematicandunrealisticifthe

small arms and light weapons-manufacturing lobby is not first addressed


and studied academically using a corporate, business-minded approach.

Studying thearms industry ingeneral is impossiblewithout reliable, con-

structiverelationshipsbeingdevelopedbetweenresearchersandindustryac-

tors,outsideofthetraditionalandcriticalapproachhabituallytakenbythe

media and advocacy communities. This chapter provides no more than a

snapshotoftheWesternammunitionindustrywithitsmajorproducers,cost

issues,andmarketactors.Inresearchingandwritingthechapter,theauthor

deliberatelyusedadiversityofsourcestocorroboratetheviewsofacademic

scholars,mediareporters,andindustryandmarketactorsalike.

Thefirstsectionclarifiedspecificclassificationissuesthatneedtobead-

dressedpriortoundertakinganycomparativeresearchintoammunitionpro-

ductionandmarkets.Given the sheerdiversityof calibres, effects, ranges,

guidancefeatures,andorigins,ammunitionshouldnotbestudiedusingthe

traditional small arms/light weapons dichotomy based on portability, but

rather using the cartridge-based/non-cartridge-based distinction. The sec-

ondsectionrevealedanumberofcommonfeaturessharedbymostWestern

ammunitionproducers,whichcouldprovidebenchmarkstoinitiatefurther

research.Accurate production figures are still extremely difficult to obtain

from governments and manufacturers alike, and ammunition data often

comes down to little more than estimation and conjecture. In the United

StatesandWesternEurope,themodern,industrializedmassmanufacturing

of ammunition is now done by profit-oriented companies and industrial

plantsactivelycompetingforcustomersworldwide.Theselargemanufacturers

produceNATO-compatibleammunition,andsomehavediversifiedtheirpro-

ductionportfoliobymarketingandsellingammunition-producingmachinery.

Finally, theymaintain tightbondswith their respectivegovernments’pro-

curementagenciestoupholdawin–winsituationfromwhichbothparties

evidentlybenefit.ThefinalsectionsketchedtheWesternammunitionmarket

andhighlightedthelureoftheUSmarketfordefenceindustryactorsgener-

ally,andforammunitionmanufacturersspecifically,althoughtheirweightin

theoverallcontextisdifficulttoquantify.Thissectionalsomentionstheinflu-

enceofcurrenteventsandworldwideconflictsonammunitionprocurement,

andexplainswhysubsequentcostissuesmaydevelop,therebylendingcredit

tothepurchaseanduseofoldexistingammunitionstocks.Thesectionended

bybrieflyoutliningtheblueprintsandstakesofmostlarge-scale,multi-year

ammunitioncontracts,andbynamingthemajorWesternmanufacturerswho

competeforthem.

ThisshortstudyhasdeliberatelyfocusedontheWesternammunitionin-

dustry.Lengthrestrictions,obviouslanguageconstraints,andaglaringlackof

authoritativesourcesandcontactsexplaintheabsenceofanyreferencetothe

Asianammunitionindustry.Asimilarchaptercouldprobablybesolelydedi-

catedtoAsianmanufacturersandtheirimpactontheworldwideammunition

procurementbusiness.TheAsianammunitionmarketwouldsurelydeserve

substantialacademicattention,althoughreliablespecializeddatasourceson

thesubjectaredifficulttofindwithoutproperindustrycontacts.Anotherarea

ofmarketresearchthatlacksproperacademiccoverageisprimers:thereare

fewerproducersofprimersthanofcartridgecasesandbullets.Assuch,they

couldprobablybecomeapossiblebottleneckforproductionandtransfercon-

trolinthenearfuture.Inthisregard,adetailedstudyofprimerproductionand

marketdistributionwouldundoubtedlybeworthwhile.

Endnotes

1.Emailreceivedfromrepresentativeofammunitionmanufacturer,23April2010.

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Chapter 2 Italian Procurement, Exports, and Consumption of Small- and Large-calibre Ammunition and MunitionsGiacomo Persi Paoli

Introduction

ThisstudyexploresItalianprocurement,exports,andconsumptionofsmall-

andlarge-calibreammunition.Itbeginsbyprovidingbackgroundinforma-

tionontheItaliandefencebudgetandmilitaryexpenditureinordertosetthe

general frameworkwithinwhich theanalysisofammunitionprocurement

andconsumptionismade.Informationregardingtheprocurementofammu-

nitioncamethroughananalysisofalltheDefence Contracts Bulletinspublished

since2005bytheItalianGeneralSecretariatofDefenceandtheNationalArma-

mentDirectorate.Thisanalysisrevealsthatthemajorityoflargecalibream-

munitionisreceivedthroughsingle-source,non-competitivecontractsdueto

thenatureofindustrialpatents.Austria,France,andGermanydominatedIt-

aly’slargecalibreammunitionsupply.Consumptionwasassessedthrough

thebreakdownofammunitionallocatedfortrainingpurposesbythemajor

Italianlightinfantrybrigadeandaspecialforceunit.Inadditiontoscaling

thequantitiesofammunitionusedannuallybytheItalianmilitary,thisanaly-

sisalsofilledinsomegapsinourunderstandingoftheprocurementofsmall

calibreammunition,whichislargelydomesticallyproduced,withafewex-

ceptionsofspecializedammunitionimportedfromFinlandandSwitzerland.

ItalianexportsareexploredthroughananalysisoftheForeignTradeStatistics

Database (Coeweb) of the Italian National Institute of Statistics (ISTAT).

Exportdatahaslimitedvalueasitispresentedinanaggregateform,which

concealsthevarietyofammunitionsenttoeachnation.However,thedata

does identify the main recipients of Italian ammunition, which for the

period 2005–March 2009 was topped by Europe, followed by Americas,

Asia,Africa,andOceania.

Background

The analysis of small- and large-calibre ammunition acquisition and con-

sumption patterns and trends needs to be contextualized in the broader

trendsoftheItaliandefencebudget,whichhasbeenheavilyaffectedbycuts

inpublic(includingmilitary)expenditureinrecentyears.

Firstly,tounderstandhowbudgetcutshaveaffectedthesetrends,itisim-

portanttounderstandwheretheresourcesfortheacquisitionofammunition

comefrom.Intheframeworkofpublicspending,thedefencebudgetisdi-

vided into function-specific budgets, i.e. defence function, public security

function,externalfunction,andinterimpensions.Thedefencefunctionbudget,

whichprovidesfundsfordevelopingandaccomplishingarmy,navy,andair

forceinstitutionalduties,includesthreemainsectors:personnelbudget,op-

eratingbudget,andinvestmentbudget.Theoperatingbudgetprovidesthe

resourcesrequiredtoensuretheefficiencyandeffectivenessofmilitaryac-

tivities,andthusincludestheresourcesneededfortheacquisitionofammu-

nition(Italy.MoD,2009,pp.125–28).From2002to2008theoperatingbudget

droppedsignificantly(about65percent)fromEUR1,150million(USD1,233

million)in2002toEUR406million(USD550million)in2008(Italy.MoD,

2009,p.131).

Whiletheoperatingbudgethasdroppedduringtheperiodofthisstudy,

militarycostshaverisen.Inparticular,theendofcompulsorymilitaryservice

in2005resultedinthetransformationofthearmedforcesintoafullyprofes-

sional force.This transitiondramatically increasedpersonnel costs,which,

duetothedefencebudgetceiling,resultedinareductionofoperatingandin-

vestmentexpenditures.Inaddition,moreandmorefrequentlythefinancial

resourcesusedtocovercostsformissionsabroadaredrawnfromthearmed

forces’ordinarybudgets,whichareintendedtocovertheirfunctioning,train-

ing,andmaintenancecosts(Italy.MoD,2009, pp.125–38).


Limitingtheresourcesavailableforoperations,training,andlogisticshas

hadconsequencesinvariousdomains,affectingthescopeofboththeacquisi-

tionandconsumptionofammunition.Theseconsequencesincluded:

• the restriction of pre-deployment preparation and training only to the

unitsearmarkedfordeploymentabroadwithinaparticularyear;

• thecancellationofalmostallexercisestakingplaceabroad(withnegative

effectsonjointandcombinedintegrationofarmyunitswiththoseofpart-

nernations);

• thecancellationofmanynationalfieldtrainingactivities,whichresultedin

limitationsontheoperationalcapabilitiesofheadquartersandunits;and

• asignificantreduction in theacquisitionofmaterielandspareparts, in-

cludingammunition(Italy.MoD,2009,pp.134–37).

Thecombinedimpactof theseconsequenceshasresultedinanoverallde-

creaseinconsumptionandprocurement,asillustratedbythedatasetspre-

sentedinthisstudy.

ProcurementIntroduction to defence procurementItaly isaparticipatingmemberstateof theEuropeanDefenceAgency(EDA),

whichhasidentifiedprogresstowardsthecreationofaninternationallycompeti-

tiveEuropeandefenceequipmentmarketasakeymeanstostrengthentheEuro-

peandefenceindustry.Consequently,participatingmemberstatesestablisheda

voluntary,non-bindingintergovernmentalregimeaimedatencouragingcompe-

titionindefenceprocurement,onareciprocalbasis,amongthosesubscribingto

theregime(seeChapter1,Box1.1forfurtherdetailsonthisregime).

According to the regime, subscribing member states (SMSs) are called

upon to open all defence procurement opportunities valued at more than

EUR1million(withtheexceptionoftheprocurementofresearchandtech-

nology,collaborativeprocurements,andtheprocurementofnuclearweap-

onsandnuclearpropulsionsystems;chemical,bacteriological,andradiologi-

calgoodsandservices;andcryptographicequipment).1

Thekeyprinciplesonwhichtheabovedescribedmechanismisbasedare

thefollowing(EDA,2005):

• ‘A voluntary, non-binding approach.Nolegalcommitmentisinvolvedor

implied.’SMSsareallowedtocanceltheirparticipationatanytimeand,‘in

allcases,thefinalauthorityforcontractawardremainswithSMSnational

authorities’.

• ‘Fair and equal treatment of suppliers.’To‘maximizeopportunitiesforall

suppliers’itisnecessarytoguaranteemaximum‘transparencyandequal-

ityofinformation’(seeChapter1,Box1.2forfurtherdetails).

• ‘Mutual transparency and accountability.EachSMSwillwishregularlyto

reviewcomprehensivedatawhichdemonstrateshowtheregimeisimpact-

ingdefenceprocurementpracticesandoutcomes.’TheEDA,throughits

monitoringandreportingmechanisms,seekstoachievemutualtranspar-

encyandaccountability.

• ‘Mutual support. The privilege of improved opportunity’ for a nation’s

defencemanufacturerstoexpandintoanother’sdefencemarket‘impliesa

reciprocal obligation’ among SMSs. Therefore, ‘consistent with national

legislationandinternationalobligations’,SMSgovernmentsarecalledon

‘toassistandexpediteeachothers’contracteddefencerequirements,par-

ticularlyinurgentoperationalcircumstances’.

• ‘Mutual benefit....theexpansionofopportunitiesforsmall-andmedium-

sizedcompaniesfromacrossEuropetoselltoacontinental-widemarket’

representsamajorbenefitforallSMSs.Inaddition,because‘[i]ndefence

procurement,thecustomersforsuchcompaniesmaybeaprimecontractor

ratherthantheend-user’,itisfundamentaltoensurethat‘faircompetition

andthebenefitsoftheregimearedrivendownthesupply-chain’,includ-

ingpossiblesub-contractorsselected‘onafairandequitablebasis’.

Methodology and preliminary observations on procurementDespite Italy’s statusasamemberof theEDA, theEDA Electronic Bulletin

Board on Defence Contract Opportunities wasnotusedinthisstudy.Onereason

wasthatitdidnotcomeintoeffectuntil2006.Additionally,sincethebulle-

tin’sestablishment,Italyhasnotpostedabidforsmallarmsorlightweapons


ammunition,anddoesnotappeartohaveuseditconsistently.Thestudyin-

steadusedaseparate,reliablesourceofsmall-andlarge-calibreammunition

procurement patterns, the Italian Defence Contracts Bulletins for the period

2005–09 (Italy,2005–09).ThisbulletinisissuedmonthlybytheItalianGeneral

SecretariatofDefenceandtheNationalArmamentDirectorate,incoopera-

tionwiththeArmedForcesGeneralStaff,theCarabinieri,andGuardiadiFi-

nanzaheadquarters.ThebulletinismeantforallEuropeancompanieswork-

inginthedefencetechnologysectorandpromotescompetitionthroughthe

widerparticipationofcompetitivetenders.Althoughcompetitivecontracts

seemtobethenormforsmallcalibreammunitionprocurement(e.g.seethe

7.62mmroundslistedasapossiblefuturepurchasein2005,asshowninTable

2.1),competitionforlargecalibreammunitionprocurementappearslimited.

Thisisprimarilyduetothefactthatthemajorityoflargecalibreammunition

usedbytheItalianarmedforcesissubjecttoindustrialpatentsduetoitshigh

levelofsophistication.Forthisreason,themajorityofprocurementcontracts

aresinglesourceandarecarriedoutthroughdirectnegotiationswithcompa-

niesinpossessionoftherelevantindustrialpatents.

Minornationalordersmightnotbeincludedinthebulletin,sincelisting

ordersvaluedatlessthanEUR 1millionremainsatthediscretionofeachna-

tion.Thescopeoftheprocurementthatfallsbelowthisthresholdisunknown.

Somespecializedunits,forinstance,areallowedtoengageinnegotiationsfor

theacquisitionofammunition(andmaterialingeneral)independently,with-

outnecessarilyhavingtogothroughthecentralauthority.2Forthisreason,

informationontheseprocurementcontractsisnotincludedinthefollowing

analysis.Nevertheless,thebulletinprovidessufficientinformationtoidentify

procurementtrends,especiallythoserelatedtolightweaponsammunition.

DataIn2005ItalyinvestedaboutEUR17million(USD21million)intheacquisi-

tionoflightweaponammunition,43percentofwhichwasspentinGermany

fortheacquisitionofPanzerfaustweaponsystems,asingle-useanti-tankgre-

nadelauncher(Italy,March2005,p.6),28percentdomesticallyfor25mm

rounds(Italy,February2005,pp.8,9),15percentinAustriafor60mmmortar

bombs(Italy,August–September2005,p.3),and14percentinSouthKorea

for120mmcartridges(Italy,February2005,p.9)(seeTable2.1).

Useful information regarding short-term demand for small- and large-

calibre ammunition by the Italian armed forces can be obtained from the

nationalorderslistedas‘possiblefuturepurchase’.Thislistin2005(withan

estimatedprocurementdatein2006)includedsmallcalibreammunitiontobe

acquiredthroughcompetitivebids (Italy,May2005,p.4)and largecalibre

ammunition to be procured through a single source contract. Of roughly

120,00040mmgrenades,56percentarelistedasapossiblefuturepurchase

intendedtobeprocuredfromaGermancompany,withtheremaining44per

centprocuredfromanAustriancompany(Italy,October2005,pp.2–3).All

5,000ofthe60mmmortarbombsweretobesuppliedbyanAustriancompa-

ny(Italy,July2005,p.2)(seeTable2.1).

Despitethehighquantityofsmall-andlarge-calibreammunitionlistedin

2005 as possible future purchases, no contracts were listed as awarded in

2006.Apossibleexplanationcouldbefoundinthemajorbudgetcutthatfol-

lowedtheprofessionalizationoftheItalianarmedforces.Althoughsomeof

the2005entrieswerepostponedto2007,theoverallquantitieslistedaspossi-

blefuturepurchasessufferedsignificantdrops,withGermanyandAustria

identifiedasthesolesuppliersof58,45040mmgrenades(Italy,October2006,

pp.2–3)and8,45060mmbombs(Italy,July2006,p.4),respectively.Competi-

tive bids for small calibre ammunition were also included (Italy, October

2006,p.3)(seeTable2.2).

In2007onlyonecontractwaslistedasawarded(Italy,April2007,p.2),go-

ingtoanAustriancompanyforaEUR2million(USD3million)supplyof

about5,88060mmbombs(seeTable2.3).

Regarding possible future purchases listed in 2007 (Italy, August–

September2007,pp.1–4;November2007,pp.1–2),58,00025mmcartridges

wererequestedfromRheinmetallinGermany,39,00040mmgrenadeswere

dividedbetweenGermany(78percent)andItaly(22percent),9,20060mm

mortarbombswereplannedtobeacquiredfromanAustriancompany,and

8,000120mmmunitionswereequallydividedbetweenFranceandGermany

(seeTable2.3)


Tabl

e 2.

1C

on

firm

ed t

ran

sact

ion

s in

200

5 an

d p

oss

ible

fu

ture

pu

rch

ases

wit

h a

n e

stim

ated

pro

cure

men

t d

ate

in 2

006

Year

Cal

ibre

Mod

el/T

ype

Qua

ntit

yTo

tal c

ost

(EU

r)

Type

of

cont

ract

Aw

arde

d to

Cou

ntry

2005

Con

firm

ed tr

ansa

ctio

ns

25 m

mC

artr

idge

s/A

PFSD

S-T

WK

PM

B 0

9024

,000

2,83

2,00

0Si

ngle

sou

rce

Sim

mel

Dife

saIta

ly

25 m

mC

artr

idge

s/H

EI-T

WK

PM

B 0

5017

,970

1,87

7,68

5.30

Sing

le s

ourc

eSi

mm

el D

ifesa

Italy

60 m

mB

ombs

/HE

84 L

D3,

260

2,49

9,95

8.20

Sing

le s

ourc

eH

irte

nber

ger

Def

ence

Sys

tem

sA

ustr

ia

60 m

mB

ombs

/WP

smok

e 84

LD

2,90

0

60 m

mB

ombs

/pra

ctic

e 84

LD

8,49

0

120

mm

Car

trid

ges/

TP-T

2,50

02,

320,

000

Com

petit

ive

Poon

gsan

Cor

p.So

uth

Kore

a

Panz

erfa

ust3

(PZ

F3-T

) wea

pon

syst

em

with

tand

em w

arhe

ad2,

210

7,35

7,50

0Si

ngle

sou

rce

Dyn

amit

Nob

elG

erm

any

List

ed a

s ‘po

ssib

le fu

ture

pur

chas

es’ f

or 2

006

7.62

mm

Car

trid

ges/

NAT

O70

0,00

0—

Com

petit

ive

——

7.62

mm

Car

trid

ges/

NAT

O tr

acer

93,6

00—

Com

petit

ive

——

12 m

mC

artr

idge

s/PI

T M

20 (a

rmou

r pie

rcin

g,

ince

ndia

ry, a

nd tr

acer

)20

0,00

0—

Com

petit

ive

——

40 m

mG

rena

des/

DP9

252

,200

—Si

ngle

sou

rce

Arg

esA

ustr

ia

40 m

mG

rena

des/

self-

dest

ruct

ion

900

—

40 m

mG

rena

des/

HE

PFF-

T D

M11

117

,120

—Si

ngle

sou

rce

Die

hlG

erm

any

2005

40 m

mG

rena

des/

soun

d fla

sh2,

700

—Si

ngle

sou

rce

NIC

O F

euer

wer

k G

mbH

Ger

man

y

40 m

mG

rena

des/

40 x

46

impa

ct s

igna

ture

4,00

0—

40 m

mG

rena

des/

40 x

46

IR1,

500

—

40 m

mG

rena

des/

40 x

53

MK

281

40,7

00—

40 m

mG

rena

des/

40 x

46

illum

inat

ing

1,85

0—

40 m

mG

rena

des/

40 x

46

whi

te p

hosp

horu

s50

0—

60 m

mB

ombs

/MK

2 (il

lum

inat

ing

bom

bs)

5,00

0—

Sing

le s

ourc

eH

irte

nber

ger

Def

ence

Sys

tem

sA

ustr

ia

Panz

erfa

ust3

(PZ

F3-T

) wea

pon

syst

em

with

tand

em w

arhe

ad7,

100

—Si

ngle

sou

rce

Dyn

amit

Nob

elG

erm

any

Sour

ce: I

taly

(Jan

uary

–Dec

embe

r 20

05)


Tabl

e 2.

2C

on

firm

ed t

ran

sact

ion

s in

200

6 an

d p

oss

ible

fu

ture

pu

rch

ases

wit

h a

n e

stim

ated

pro

cure

men

t d

ate

in 2

007

Year

Cal

ibre

Mod

el/T

ype

Qua

ntit

yTo

tal c

ost

(EU

r)

Type

of c

ontr

act

Aw

arde

d to

Cou

ntry

2006

Con

firm

ed t

rans

acti

ons

——

——

——

—

List

ed a

s ‘p

ossi

ble

futu

re p

urch

ases

’ for

200

7

.338

Car

trid

ges

55,0

00—

Com

petit

ive

——

7.62

mm

Car

trid

ges/

NAT

O64

6,00

0—

Com

petit

ive

——

40 m

mG

rena

des/

HE

DM

1241

,300

—Si

ngle

sou

rce

Rhe

inm

etal

lG

erm

any

40 m

mG

rena

des/

soun

d fla

sh1,

700

—Si

ngle

sou

rce

NIC

O F

euer

wer

k G

mbH

Ger

man

y

40 m

mG

rena

des/

40 x

46

impa

ct

sign

atur

e3,

000

—

40 m

mG

rena

des/

40 x

46

IR1,

000

—

40 m

mG

rena

des/

40 x

53

MK

281

5,70

0—

40 m

mG

rena

des/

40 x

46

illum

inat

ing

5,75

0—

60 m

mB

ombs

/HE

84 L

D5,

250

—Si

ngle

sou

rce

Hir

tenb

erge

r Def

ence

Sy

stem

sA

ustr

ia

60 m

mB

ombs

/Ill M

K2

(illu

min

atin

g)2,

000

—

60 m

mB

ombs

/WP

smok

e1,

200

—

Sour

ce: I

taly

(Jan

uary

–Dec

embe

r, 20

06)

Tabl

e 2.

3C

on

firm

ed t

ran

sact

ion

s in

200

7 an

d p

oss

ible

fu

ture

pu

rch

ases

wit

h a

n e

stim

ated

pro

cure

men

t d

ate

in 2

008

Year

Cal

ibre

Mod

el/T

ype

Qua

ntit

yTo

tal c

ost

(EU

r)

Type

of c

ontr

act

Aw

arde

d to

Cou

ntry

2007

Con

firm

ed t

rans

acti

ons

60 m

mB

ombs

/HE

84 L

D3,

880

2,08

2,85

4.20

Sing

le s

ourc

eH

irte

nber

ger

Def

ence

Sys

tem

sG

mbH

& C

o. K

G

Aus

tria

60 m

mB

ombs

/Ill M

K2

(illu

min

atin

g)2,

000

List

ed a

s ‘p

ossi

ble

futu

re p

urch

ases

’ for

200

8

25 m

mC

artri

dges

/APF

SDS-

T W

K PM

B 09

024

,000

—Si

ngle

sou

rce

Rhe

inm

etal

lG

erm

any

25 m

mC

artr

idge

s/M

P-T

SD M

K2

(Mul

tipur

pose

)34

,000

—Si

ngle

sou

rce

Rhe

inm

etal

lG

erm

any

40 m

mG

rena

des/

40 x

46

illum

inat

ing

2,50

0—

Sing

le s

ourc

eR

hein

met

all

Ger

man

y

40 m

mG

rena

des/

40 x

46

DP9

27,

500

—

40 m

mG

rena

des/

40 x

53

MK

281

3,70

0—

40 m

mG

rena

des/

soun

d fla

sh1,

700

—

40 m

mG

rena

des/

DM

118A

24,

000

—

40 m

mG

rena

des/

M40

/SIM

AD

-T7,

500

—Si

ngle

sou

rce

SIM

AD

SpA

Italy

40 m

mG

rena

des/

M40

/SIM

AD

-CS

1,00

0—

40 m

mG

rena

des/

HE

PFF-

T D

M11

111

,200

—Si

ngle

sou

rce

Die

hlG

erm

any

60 m

mB

ombs

/HE

84 L

D5,

600

—Si

ngle

sou

rce

Hir

tenb

erge

r D

efen

ce S

yste

ms

Aus

tria

60 m

mB

ombs

/Ill M

K2

(illu

min

atin

g)2,

400

—

60 m

mB

ombs

/WP

smok

e 84

LD

1,20

0—

120

mm

Bom

bs/P

R14

(HE)

4,00

0—

Sing

le s

ourc

eTD

A A

rmem

ents

SA

SFr

ance

120

mm

Car

trid

ges/

DM

18A

44,

000

—Si

ngle

sou

rce

Rhe

inm

etal

lG

erm

any

Sour

ce: I

taly

(Jan

uary

–Dec

embe

r 20

07)


Tabl

e 2.

4C

on

firm

ed t

ran

sact

ion

s in

200

8 an

d p

oss

ible

fu

ture

pu

rch

ases

wit

h a

n e

stim

ated

pro

cure

men

t d

ate

in 2

009

Year

Cal

ibre

Mod

el/T

ype

Qua

ntit

yTo

tal c

ost

(EU

r)

Type

of c

ontr

act

Aw

arde

d to

Cou

ntry

2008

Con

firm

ed t

rans

acti

ons

40 m

mG

rena

des/

M40

/SIM

AD

-T7,

150

174,

708.

56Si

ngle

sou

rce

SIM

AD

SpA

Italy

40 m

mG

rena

des/

M40

/SIM

AD

-CS

1,00

0

60 m

mB

ombs

/HE

84 L

D6,

000

2,91

5,76

0Si

ngle

sou

rce

Hir

tenb

erge

r D

efen

ce

Syst

ems

Aus

tria

60 m

mB

ombs

/WP

smok

e 84

LD

2,40

0

60 m

mB

ombs

/Ill M

K2

(illu

min

atin

g)1,

400

120

mm

Bom

bs/P

R14

(HE)

4,00

03,

344,

950

Sing

le s

ourc

eTD

A A

rme-

men

ts S

AS

Fran

ce

List

ed a

s ‘p

ossi

ble

futu

re p

urch

ases

’ for

200

9

25 m

mC

artr

idge

s/A

PFSD

S-T

WK

PM

B 0

9038

,000

—Si

ngle

sou

rce

Rhe

inm

etal

lG

erm

any

25 m

mC

artr

idge

s/M

P-T

SD M

K2

(mul

tipur

pose

)35

,300

—Si

ngle

sou

rce

RWM

Sch

wei

z A

G

Switz

erla

nd

40 m

mG

rena

des/

HE

PFF-

T D

M11

129

,040

—Si

ngle

sou

rce

Die

hlG

erm

any

40 m

mG

rena

des/

HE/

DP

30,0

00—

Sing

le s

ourc

eR

hein

met

all

Ger

man

y

40 m

mG

rena

des/

HE/

frag

4,40

0—

40 m

mG

rena

des/

illum

inat

ing

5,00

0—

Gre

nade

s/fla

sh b

ang

opv

NIK

O20

0—

60 m

mB

ombs

/HE

84 L

D6,

500

—Si

ngle

sou

rce

Hir

tenb

erge

r D

efen

ce

Syst

ems

Aus

tria

60 m

mB

ombs

/Ill M

K2

(illu

min

atin

g)2,

000

—

2008

60 m

mB

ombs

/Ill M

K2

(illu

min

atin

g)2,

000

—

60 m

mB

ombs

/WP

smok

e 84

LD

4,50

0—

60 m

mB

ombs

/pra

ctic

e 84

LD

5,30

0—

120

mm

Bom

bs/P

R14

(HE)

4,00

0—

Sing

le s

ourc

eTD

A A

rme-

men

ts S

AS

Fran

ce

120

mm

Bom

bs/il

lum

inat

ing

1,00

0—

120

mm

Bom

bs/P

R14

-PLP

N2,

000

—

Panz

erfa

ust3

(PZ

F3-T

) wea

pon

syst

em

with

tand

em w

arhe

ad5,

100

—Si

ngle

sou

rce

Dyn

amit

Nob

elG

erm

any

Firi

ng d

evic

es1,

000

—

PZF3

sub

-cal

ibre

dev

ices

, 18

mm

, with

fir

ing

unit

150

—

18 m

m18

x 8

6 tr

acer

8,00

0—

Ligh

t ant

i-ta

nk w

eapo

n sy

stem

LA

W

M72

A5

60—

Sing

le s

ourc

eN

amm

o R

aufo

ssN

orw

ay

M

72A

5 A

WA

5, 2

1 m

m, s

ub-c

alib

re

trai

ning

wea

pons

5—

21 m

mM

72 L

AW

A5,

trai

ning

rock

ets

200

—

Sour

ce: I

taly

(Jan

uary

–Sep

tem

ber

2008

)


In2008atotalofaboutEUR6.5million(USD9million)wasinvestedin

theacquisitionoflargecalibreammunition.Inparticular,52percentwentto

Francefortheacquisitionof120mmrifledmortarbombs(Italy,March2008,

p.1),45percentwenttoAustriafortheacquisitionof60mmmortarbombs

(Italy,March2008,pp.1–2),and3percentwenttoItalyfortheacquisitionof

40mmgrenades(Italy,February2008,p.1)(seeTable2.4).Withrespectto

possiblefuturepurchases,Germany,Austria,andFrancewereidentifiedas

solesuppliersofabout70,00040mm,18,00060mm,and7,000120mmgre-

nades/cartridges/bombs,respectively,andGermanyandSwitzerlandwere

listedassuppliers(about50percenteach)for25mmcartridges(Italy,July

2008,pp.1–3).Inaddition,Germanywasalsolistedasthesupplierof5,100

Panzerfaust weapons systems with 8,000 18 mm rockets (Italy, September

2008,p.1),while60lightanti-tankweaponsystemswith20021mmtraining

rocketsweretobeacquiredfromNorway(Italy,June2008,p.1)(seeTable2.4).

In2009theonlybulletin thathadbeenpublishedbytheendof there-

searchperiodwastheFebruaryissue.Nevertheless,relevantinformationcan

beobtainedfromitsanalysis.BytheendofFebruary2009aboutEUR24.5

million(USD35million)hadbeeninvestedthusfarintheacquisitionoflarge

calibreammunition,aconsiderableincreaseovertheentire2008total,with55

percentoftheearly2009purchasesgoingtoFrancefortheacquisitionof120

mmrifledmortarbombs,33percenttoAustriafor60mmmortarbombs,and

theremaining12percenttoGermanyfortheacquisitionof40mmgrenades.

Inaddition,aboutEUR100,000(USD142,000)wasinvestedintheacquisition

oflightanti-tankweaponsystemsandrelatedmunitionsfromtheNorwegian

producerNammoRaufoss(seeTable2.5).

AnalysisThecontractionoftheoperatingbudgetsectoroftheItaliandefencefunction

budget in recentyears isoneof theelementsgeneratingdiscrepanciesbe-

tweenpossiblefuturepurchasesandconfirmedtransactionseachyear.The

mostevidentexampleistheabsenceofaconfirmedtransactionin2006,de-

spitethelonglistofpossiblefuturepurchasesgivenin2005.Furtherevidence

can be found in the fluctuating quantity of ammunition procured againstTabl

e 2.

5C

on

firm

ed t

ran

sact

ion

s in

200

9 an

d p

oss

ible

fu

ture

pu

rch

ases

wit

h a

n e

stim

ated

pro

cure

men

t d

ate

in 2

010

Year

Cal

ibre

Mod

el/T

ype

Qua

ntit

yTo

tal c

ost

(EU

r)

Type

of

cont

ract

Aw

arde

d to

Cou

ntry

2009

Con

firm

ed t

rans

acti

ons

40 m

mG

rena

des/

HE/

DP

30,0

002,

779,

086

Sing

le s

ourc

eR

hein

met

all W

affe

M

uniti

on G

mbH

Arg

es

Ger

man

y

40 m

mG

rena

des/

HE/

frag

4,40

0

40 m

mG

rena

des/

illum

inat

ing

5,00

0

Gre

nade

s/fla

sh b

ang

opv

NIK

O20

0

60 m

mB

ombs

/HE

84 L

D25

,400

8,19

2,31

8Si

ngle

sou

rce

Hir

tenb

erge

r D

efen

ce S

yste

ms

Aus

tria

60 m

mB

ombs

/WP

smok

e 84

LD

4,50

0

60 m

mB

ombs

/Ill M

K2

(illu

min

atin

g)2,

000

120

mm

Bom

bs/P

R14

(HE)

10,4

3613

,554

,538

.12

Sing

le s

ourc

eTD

A A

rmem

ents

SA

SFr

ance

120

mm

Bom

bs/ (

illum

inat

ing)

2,22

6

Ligh

t ant

i-ta

nk w

eapo

n sy

stem

LA

W M

72A

560

101,

304

Sing

le s

ourc

eN

amm

o R

aufo

ssN

orw

ay

M

72A

5 A

WA

5, 2

1 m

m,

sub-

calib

re tr

aini

ng w

eapo

ns5

21 m

mM

72 L

AW

A5,

trai

ning

rock

ets

200

List

ed a

s ‘p

ossi

ble

futu

re p

urch

ases

’ for

201

0

——

——

——

—

Sour

ce: I

taly

(Feb

ruar

y 20

09)


‘possiblefuturepurchase’inthepreviousyear(e.g.seetheprocurementpattern

ofHE84LDbombsin2006,2007,and2008).Possiblereasonsforthesedis-

crepanciesmayincludebudgetcutsorbudgetadministration,variedopera-

tiveneeds,oradhocagreementswiththeproducer.

AccordingtotheDefence Contracts Bulletins,thesupplyofsmall-andlarge-

calibreammunitionfollowstwodifferentsystems.Thefewprocurementcon-

tractslistedforsmallcalibreammunitionareintendedtobeawardedona

competitivebasis,whileallprocurementcontractsforlargecalibreammuni-

tionaresinglesource,withthesoleexceptionof2,500120mmcartridgesac-

quiredthroughacompetitivecontractallocatedtoSouthKoreain2005.

MostofthelargecalibreammunitionacquiredbytheItalianMinistryofDe-

fenceissubjecttoindustrialpatents.Thislimitsthecompetitivenessofthemar-

ketbycreatingdefactomonopolisticsub-marketsforthemajorityoflargecalibre

ammunitionandheavilyaffects theratiobetweenimportedanddomestically

producedammunition.Fromtheanalysisofthebulletins,itispossibletoidentify

twodifferentwaysinwhichindustrialpatentsaffectthemarket.

1. Considering, for example, the 2009 procurement of 60 mm bombs for the

CommandomortarfromanAustriancompany,3theprocurementhadtobe

carriedoutthroughdirectnegotiationswiththecompany,whichwas,quoting

thebulletin,‘theonlycompanythatcanprovidethesubjectitems,qualified

withtheabovementionedmortar,beinginpossessionoftheindustrialpatent’.

2.Considering,forexample,the2009procurementof40mmgrenadesfrom

Germany,4theprocurementhadtobecarriedoutthroughdirectnegotia-

tionswiththecompany,which,quotingthebulletin,‘holdsanindustrial

patent-rightonthisspecificammunition’.

Inexample1,Italy’sweaponsystemchoiceforcedittodealwiththeAustrian

companymanufacturingcompatiblebombs.Inexample2,theproductionof

theammunitionitselfisregulatedbyanindustrialpatent.Inotherwords,the

firstexamplehighlightsthecaseofanobligatorychoiceoftheammunition

supplierdictatedbythespecificityoftheimplementingtool—inthisexample

themortar—whilethesecondexamplehighlightsthecaseofanobligatory

choiceofsupplierdictatedbythetypeofammunitionitself.

Whenfocusingonspecificcalibres,accordingtothebulletin,all60mm

mortarbombsand120mmrifledmortarbombs importedafter2005came

fromAustriaandFrance,respectively.About80percentofthe40mmgre-

nadeswereimportedfromGermany,withtheremaining20percentdomesti-

callyproduced.Thisgapisevenmoreevidentwhenanalysingthebudgetfor

thesepurchases,as94percentoftheamountallocatedtothepurchaseof40

mmgrenadeswenttoGermanyandonly6percenttoItaly.

According thebulletins,onlyonecontract for25mmammunitionwas

awardedafter2005,withanItaliancompanyassolebeneficiary.Neverthe-

less,throughananalysisofpossiblefuturepurchasesof25mmammunition,

itispossibletoidentifythreeadditionalsuppliersforthiscalibreinGermany,

Norway,andSwitzerland.

WhileunabletoconfirmpurchasesofsmallarmsammunitionthroughDefence

Contract Bulletins,relevantinformationwasobtainedfromthedataonconsump-

tion,detailedinthenextsection.Aprobablereasonfortheexclusionofsmallcali-

breammunitionfromthebulletinscanbefoundinthepossibilitythattheprocure-

mentcontractsofsuchammunitionfallbelowtheEUR1millionthreshold.

ConsumptionMethodologyAccesstotheentiremilitaryconsumptionofammunitionwasnotgranted.

Therefore,thefiguresincludedinthefollowingtablesarebasedonlyonthose

forthelargestlightinfantrybrigadeandonahighlyspecializedunitofthe

ItalianArmy.ThedatapresentedwasprovidedbyinternalsourcesintheItal-

ianArmy.Theextrapolationofthetrendsillustratedtotheentirearmyin-

cludedinthissectionisforillustrativepurposeonlyanditisnotmeantto

providestatisticallyaccuratefigures.5

DataTable2.6illustratesdataontheallocationandconsumptionofammunition

andmunitionsintendedfortrainingpurposesduringtheperiod2005–08for

thelargestbrigade(4,500–5,000soldiers)intheItalianArmy.6Thetableshows

that all small calibre ammunition consumed was produced in Italy, while


France supplied 120 mm PR14 (HE) rifled mortar bombs. The allocated

amountofammunitionandmunitionsfortrainingpurposesvarieddepend-

ingonwhetherornotthebrigadewasdeployedinoperations.The2006allo-

cated quantities of ammunition for training purposes were higher than in

otheryears,asthebrigadewasnotdeployedoutofareainthatyear.

Table2.7illustratesdataonammunitionacquisitionandconsumptionin

theperiod2007–08ofahighlyspecializedunitoftheItalianArmy.Thedata

refers toanoperativegroupofaround30soldierswho train in Italy for6

monthsandaredeployedintohigh-intensitytheatresfor6months.Thevery

uniqueanddelicatenatureoftheactivitiesconductedbysuchhighlyspecial-

izedunitsrequiresamuchmoreintensetrainingpriortodeploymentthan

thetraditionallightinfantryforces.Forthisreason,consumptionofsmallcal-

ibreammunitionissignificantlygreaterthanthatofthebrigade.

Inaddition,thehighlyspecializedunitmakesuseofweaponsthatrequire

specifictypesofammunitionnotalwaysavailablefromItalianproducers.In

particular,.308and.338long-range/snipercartridgesareimportedfromFin-

land and Switzerland, 12.7 mm cartridges are imported from the United

States,andallthe40mmgrenadesareimportedfromGermany.

AnalysisTheNationalArmamentDirectorateisthecentralauthorityresponsiblefor

theallocationofordinaryammunition,munitions,andexplosivedevicesto

all Italianarmed forcesunitsanddetermines thequantities tobeused for

training purposes and operations.Yearly allocations for training purposes

canvaryfromyeartoyearforoneormoreofthefollowingmainreasons:

• economicconstraints(e.g.budgetreduction);

• specialoperativenecessitiesoutofarea;and

• limitationsontheavailableammunition.

Forillustrativepurposesonly,thedataontheaverageallocationfortraining

purposesoftheconsideredbrigade(seeTable2.6)couldbeusedtoobtainan

approximationoftheaveragepersonalallocationforeachsoldier.Thisfigure

cannotbeconsideredaccurate,assoldiersindifferentroleswillreceiveand

consumedifferentamountsofammunition(e.g.logisticspersonnelwillcon-

sumelessthanoperativepersonnel).So,assumingthatthedatapresentedin

Table2.6refersto5,000soldiersandthatallsoldiersreceivethesameamount

ofammunition,eachsoldierwouldreceiveeachyearapproximately:

• 1035.56mmcartridgesofvarioustypes;

• 207.62mmNATOcartridges;

• 259mmcartridges;and

• 512.7mmcartridges.

Again for illustrativepurposesonly, ifweapproximate the30,000soldiers

composingthe117brigadesoftheItalianArmythatutilizesmallarmsaspri-

maryweapons,andthereforearethemajorconsumersofsmallcalibream-

munition,andifweassumethateachbrigadereceivedthesameallocationof

ammunition,wecouldobtainanapproximatedfigurefortheannualaverage

amountofammunitionallocatedfortrainingpurposes:

• 3,090,0005.56mmcartridgesofvarioustypes;

• 590,0007.62mmNATOcartridges;

• 750,0009mmcartridges;and

• 150,00012.7mmcartridges.

Theaggregatedconsumptionofsmallcalibreammunitionrelatedtothere-

mainingsixsupportbrigades,8whichtraintheirpersonnelintheuseofsmall

armsasweaponsforindividual,asset,andsiteprotection,canbereasonably

estimatedasanadditional25percentoftheabovementionedaveragequantities.

Oncemore,asthesefiguresarebasedontheassumptionthatallsoldiers

receivethesameallocationofammunition,theycanbeconsideredonlyforil-

lustrativepurposesandnotasaprecisestatisticalextrapolation.

Thissectionprovidedaninstructiveandreliableexampleoftheallocation

andconsumptionofsmall-andlarge-calibreammunitionforalightinfantry

brigadeandforahighlyspecializedunitoftheItalianArmy.Datahasshown

that consumed small calibre ordinary ammunition is mostly domestically

produced9 with a few exceptions, including long-range/sniper cartridges

thatareusuallyimportedfromFinland,Switzerland,andtheUnitedStates.


2007

5.56

mm

Car

trid

ges

for p

orta

ble

firea

rm21

9,22

819

3,35

6Ita

ly

5.56

mm

Car

trid

ges

for m

ount

ed fi

rear

m16

6,75

815

1,80

0Ita

ly

7.62

mm

Car

trid

ges/

NAT

O fo

r MG

42/

5995

,231

82,0

00Ita

ly

9 m

mC

artr

idge

s/9

mm

Par

abel

lum

22,2

339,

800

Italy

12.7

mm

Car

trid

ges/

PIT

M20

(arm

our p

ierc

ing,

ince

ndia

ry, a

nd tr

acer

)22

,233

9,80

0Ita

ly

120

mm

Mor

tar b

ombs

/ligh

t ant

i-ta

nk49

48Ita

ly

2008

5.56

mm

Car

trid

ges

for p

orta

ble

firea

rm22

2,47

721

2,44

0Ita

ly

5.56

mm

Car

trid

ges

for m

ount

ed fi

rear

m37

3,87

028

8,20

0Ita

ly

7.62

mm

Car

trid

ges/

NAT

O fo

r MG

42/

5986

,707

48,4

50Ita

ly

9 m

mC

artr

idge

s/9

mm

Par

abel

lum

191,

664

174,

450

Italy

12.7

mm

Car

trid

ges/

PIT

M20

(arm

our p

ierc

ing,

ince

ndia

ry, a

nd tr

acer

)58

,394

45,4

00Ita

ly

120

mm

Mor

tar b

ombs

/ligh

t ant

i-ta

nk16

347

Italy

120

mm

Mor

tar b

ombs

/ant

i-ta

nk P

EPA

7676

Italy

120

mm

Mor

tar b

ombs

/PR

14H

E22

368

Fran

ce

Average

5.56

mm

Car

trid

ges/

vari

ous

type

s51

5,08

863

0,31

6Ita

ly

7.62

mm

Car

trid

ges/

NAT

O fo

r MG

42/

5998

,426

91,0

50Ita

ly

9 m

mC

artr

idge

s/9

mm

Par

abel

lum

125,

390

121,

025

Italy

12.7

mm

Car

trid

ges/

PIT

M20

(arm

our p

ierc

ing,

ince

ndia

ry, a

nd tr

acer

)25

,182

19,1

76Ita

ly

120

mm

Mor

tar b

ombs

/var

ious

type

s19

411

2Ita

ly/F

ranc

e

Tabl

e 2.

6A

llo

cati

on

an

d c

on

sum

pti

on

fo

r tr

ain

ing

pu

rpo

ses

of

amm

un

itio

n a

nd

mu

nit

ion

s o

f th

e la

rges

t b

riga

de

in t

he

Ital

ian

Arm

y, c

on

tain

ing

4,50

0–5,

000

sold

iers

, 200

5–08

Year

Cal

ibre

Mod

el/T

ype

Qua

ntit

y al

loca

ted

Qua

ntit

y co

nsum

edC

ount

ry o

f pr

oduc

tion

2005

5.56

mm

Car

trid

ges

for p

orta

ble

firea

rm12

7,84

858

2,42

0Ita

ly

5.56

mm

Car

trid

ges/

trac

er fo

r por

tabl

e fir

earm

1,00

066

,200

Italy

5.56

mm

Car

trid

ges

for m

ount

ed fi

rear

m88

,550

243,

400

Italy

7.62

mm

Car

trid

ges/

NAT

O fo

r MG

42/

5988

,550

143,

750

Italy

9 m

mC

artr

idge

s/9

mm

Par

abel

lum

94,7

6411

8,50

0Ita

ly

12.7

mm

Car

trid

ges/

PIT

M20

(arm

our p

ierc

ing,

ince

ndia

ry, a

nd tr

acer

)6,

900

16,5

05Ita

ly

120

mm

Mor

tar b

ombs

/ligh

t ant

i-ta

nk21

21Ita

ly

120

mm

Mor

tar b

ombs

/ant

i-ta

nk P

EPA

4810

8Ita

ly

2006

5.56

mm

Car

trid

ges

for p

orta

ble

firea

rm47

8,40

047

4,20

6Ita

ly

5.56

mm

Car

trid

ges/

trac

er fo

r por

tabl

e fir

earm

34,7

007,

840

Italy

5.56

mm

Car

trid

ges

for m

ount

ed fi

rear

m34

7,52

030

1,40

0Ita

ly

7.62

mm

Car

trid

ges/

NAT

O fo

r MG

42/

5912

3,21

790

,000

Italy

9 m

mC

artr

idge

s/9

mm

Par

abel

lum

192,

900

181,

350

Italy

12.7

mm

Car

trid

ges/

PIT

M20

(arm

our p

ierc

ing,

ince

ndia

ry, a

nd tr

acer

)13

,200

5,00

0Ita

ly

120

mm

Mor

tar b

ombs

/ligh

t ant

i-ta

nk14

080

Italy

120

mm

Mor

tar b

ombs

/ant

i-ta

nk P

EPA

560

Italy


Grenades

40 m

m40

x 4

6 D

P92

1,00

022

831

320

11G

erm

any

40 m

m40

x 4

6 sm

oke

1,00

042

020

11G

erm

any

40 m

m40

x 5

3 hi

gh e

xplo

sive

dua

l pur

pose

500

038

520

15G

erm

any

40 m

m40

x 5

3 im

pact

sig

natu

re52

00

500

2011

Ger

man

y

40 m

m40

x 4

6 C

S ga

s1,

200

010

2011

Ger

man

y

40 m

m40

x 4

6 tr

aini

ng p

ract

ice

trac

er D

M 1

18 A

21,

500

475

1,58

220

09G

erm

any

* D

ata

refe

rs to

an

oper

ativ

e gr

oup

of a

roun

d 30

sol

dier

s w

ho tr

ain

in It

aly

for

6 m

onth

s an

d ar

e de

ploy

ed to

hig

h-in

tens

ity o

pera

ting

thea

tres

for

6 m

onth

s. H

ighl

y sp

ecia

lized

units

are

not

req

uire

d to

go

thro

ugh

the

cent

ral p

rocu

rem

ent a

utho

rity

and

are

abl

e to

acq

uire

and

con

sum

e am

mun

ition

and

mun

ition

s ac

cord

ing

to th

eir

spec

ific

need

s an

d

wea

pons

.

Tabl

e 2.

7A

mm

un

itio

n a

cqu

isit

ion

an

d c

on

sum

pti

on

of

a h

igh

ly s

pec

iali

zed

un

it o

f th

e It

alia

n A

rmy,

200

7–08

*

Type

Cal

ibre

Mod

elQ

uant

ity

acqu

ired

Qua

ntit

y co

nsum

ed,

2007

Qua

ntit

y co

nsum

ed,

2008

Stoc

k ex

piry

da

te

Cou

ntry

of

prod

ucti

on

Small calibre cartridges

9 m

mPa

rabe

llum

590,

000

280,

000

310,

000

—Ita

ly

5.56

mm

Ord

nanc

e1,

030,

000

610,

000

520,

000

—Ita

ly

.308

Subs

onic

6,60

01,

000

4,50

020

19Fi

nlan

d

.308

Scen

ar 1

67 g

rs (L

apua

)4,

900

01,

600

2019

Finl

and

.308

Scen

ar 1

67 g

rs (R

UA

G)

4,50

00

3,75

020

19Sw

itzer

land

.308

Scen

ar 1

75 g

rs (R

UA

G)

2,90

072

055

020

19Sw

itzer

land

.338

Lock

bas

e (L

apua

)3,

000

1,45

51,

250

2010

Finl

and

.338

Bal

l (R

UA

G)

1,10

00

7520

15Sw

itzer

land

.338

Arm

our p

ierc

ing

(RU

AG

)1,

000

540

100

2016

Switz

erla

nd

.338

Scen

ar (L

apua

)3,

000

1,72

077

020

10Fi

nlan

d

12.7

mm

Bar

rett

800

410

700

2016

US

12.7

mm

Arm

our p

ierc

ing-

ince

ndia

ry-t

race

r for

Bro

wni

ng5,

500

100

(bel

ts)

130

(bel

ts)

2012

US

Shotgun shells

12-g

auge

Ant

i-ri

ot3,

400

120

368

—Ita

ly

12-g

auge

Doo

r-br

each

ing

buck

shot

850

090

—Ita

ly

12-g

auge

Slug

roun

d9,

000

260

1,16

4—

Italy


Inthissection,wealsoderivedsomeapproximatedfigures,forillustrative

purposesonly,describing theestimatedannualammunitionallocationper

soldierandtheestimatedaggregateannualammunitionallocationofthe17

brigadesoftheItalianArmy.

ExportsMethodology

This sectionpresents theexportdata forammunitionandmunitions from

January2005throughDecember2008.

AllexportdatacamefromCoeweb,theForeignTradeStatisticsDatabase

ofISTAT,10whichwasaccessedinJune2009.Allammunitionexportdatais

generically categorized in the group ‘Bombs, grenades, torpedoes, mines,

missiles,cartridgesandotherammunitionandprojectilesandpartsthereof,

incl.buckshot,shotandcartridgewads,n.e.s.’Thedataincludestradeinter-

change both in value (given in euros) and in quantity (in weight by kilo-

grams),byarea,andbycountry.11Informationaboutthequantityandquality

ofavailabledataisverylimited.Inparticular,itisimpossibletocross-check

dataonexportedproductstoeachoftherecipientcountries.

Aggregateddataonexportsofammunitionformilitarypurposescouldbe

obtainedthroughanalysisoftheannualreportoftheItalianprimeministerto

parliamentthatdealswithexports,imports,andthetransitofarmamentsand

relatedmaterials(Italy.PresidenzadelConsigliodeiMinistri,2005–08).How-

ever,suchinformationhasnotbeenincluded,sinceonceagainthedataisnot

sufficientlydisaggregated.Theannualreportspecifiesthetotalvalueofthe

exportstoaspecificcountryalongwithacomprehensivelistofalltheitems

purchasedfromItaly,butdoesnotspecifyhowmuchwasspentoneachpar-

ticularitemonthelist,includingammunition.Theannualreportgivesalist

ofcountries that importedammunition fromItaly,butdoesnotdetermine

howmuchtheyspentspecificallyonammunition.Inaddition,thereportin-

cludesonlyagenericcategoryentitled‘ammunition’anddoesnotdiscrimi-

natebetweensmall-andlarge-calibreammunition.

Analysis of exports, 2005–08From2005to2008ItalyexportedanaverageofaboutEUR127million(USD

172million)peryear(about23,000tonnes)ofbombs,grenades,torpedoes,

mines,missiles,cartridges,andotherammunitionandprojectilesandparts

thereof,includingbuckshot,shot,andcartridgewads.Afterasignificantdrop

in2006(toEUR104million(USD137million)),exportsincreased,reachinga

maximumin2008ofaboutEUR140million(USD190million).Onaverage,

themainrecipientofItalianexportsisEurope(70percent),followedbythe

Americas(14percent),Asia(7percent),Africa(5percent),andOceania(4

percent).Particularlysignificantisthefactthattheconstantgrowthofthe

AsianandEuropeanmarketsharesince2005(from6percentto9percent

andfrom65percentto76percent,respectively)contrastswiththereduction

oftheAmericas’sharefrom22percentin2005to6percentin2008(seeTable2.8).

Byusingasub-regionalbreakdown,itispossibletoobtainamoredetailed

pictureoftherecipientsofexports.InAfrica,intermsofthevalueineuros,an

average62percentoftheimportedammunitionintheperiod2005–08went

toNorthAfricancountries(Algeria,Egypt,Morocco,andTunisia),withthe

remaining 38 per cent divided among other African countries. This gap

reacheditsmaximumin2007,whenamajorexporttoEgypt(EUR7.5million

(USD11million))broughttheNorthAfricanshareto84percent(seeTable2.9).

IntheAmericas,whileNorthAmericancountries(theUnitedStatesand

Canada)haveimportedabout75percentoftheaveragequantityofammuni-

tionbyweighttradedperyear,CentralandSouthAmericancountriesarethe

mainrecipientswhenconsideringtheaveragevalueofthetradedammuni-

tion,withashareof53percent,againstthe47percentofNorthAmerican

countries(seeTable2.10).

InEurope,thewidemajority(82percentonaverage)ofItalianexports

globally in2005–08weredirectedtocountrieswithintheEU27,12although

purchases by non-European countries have nevertheless increased signifi-

cantly,from11percentin2005to24percentin2008(seeTable2.12).

Asindicatedabove,inCoeweballItalianammunitionexportdataisgeneri-

callycategorizedinthegroup‘Bombs,grenades,torpedoes,mines,missiles,car-

tridgesandotherammunitionandprojectilesandpartsthereof,incl.buckshot,

shotandcartridgewads,n.e.s.’,andthisisthecategoryreflectedinTables2.8–2.12.


Tabl

e 2.

8R

egio

nal

an

alys

is, i

n v

alu

e an

d q

uan

tity

, of

Ital

ian

am

mu

nit

ion

exp

ort

s, 2

005–

08*

Ex

port

s, 2

005

Expo

rts,

200

6Ex

port

s, 2

007

Expo

rts,

200

8A

vera

ge e

xpor

ts, 2

005–

08

N

et

wei

ght

(kg)

Val

ue

(EU

R)

%N

et

wei

ght

(kg)

Val

ue

(EU

R)

%N

et

wei

ght

(kg)

Val

ue

(EU

R)

%N

et

wei

ght

(kg)

Val

ue

(EU

R)

%N

et

wei

ght

(kg)

Val

ue

(EU

R)

%

Afr

ica

868,

682

4,72

2,50

04

1,02

0,85

63,

515,

489

389

9,33

710

,508

,339

81,

113,

747

4,36

1,20

13

975,

656

5,77

6,88

25

Am

eric

as1,

940,

666

30,0

00,1

4522

2,05

1,75

219

,706

,431

192,

393,

523

10,2

21,1

058

1,84

7,10

38,

858,

260

62,

058,

261

17,1

96,4

8514

Asi

a1,

726,

886

7,79

4,07

36

1,91

3,63

27,

211,

006

71,

914,

607

8,86

8,04

07

1,60

4,40

012

,289

,188

91,

789,

881

9,04

0,57

77

Euro

pe18

,353

,421

88,0

19,8

3465

17,0

52,0

8666

,646

,278

6417

,968

,108

95,9

71,8

9675

17,3

21,0

2510

6,21

0,58

476

17,6

73,6

6089

,212

,148

70

Oce

ania

an

d ot

her

coun

trie

s

940,

718

3,93

3,95

63

735,

338

7,21

0,78

27

498,

263

2,37

8,77

62

531,

625

8,13

1,75

86

676,

486

5,41

3,81

84

Wor

ld23

,830

,373

134,

470,

508

100

22,7

73,6

6410

4,28

9,98

610

023

,673

,838

127,

948,

156

100

22,4

17,9

0013

9,85

0,99

110

023

,173

,944

126,

639,

910

100

* Th

e ar

ea in

dar

k gr

ey s

how

s th

e av

erag

e da

ta o

ver

the

cons

ider

ed p

erio

d.

Sour

ce: I

STAT

(n.d

.)

Tabl

e 2.

9R

egio

nal

an

alys

is, i

n v

alu

e an

d q

uan

tity

, of

Ital

ian

am

mu

nit

ion

exp

ort

s to

Afr

ica,

200

5–08

*

Ex

port

s, 2

005

Expo

rts,

200

6Ex

port

s, 2

007

Expo

rts,

200

8A

vera

ge e

xpor

ts, 2

005–

08

N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Net

wei

ght

(kg)

Val

ue

(EU

R)

%N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Net

wei

ght

(kg)

Val

ue

(EU

R)

%N

et w

eigh

t (k

g)V

alue

(EU

R)

%

Nor

th

Afr

ica

546,

119

1,68

4,21

936

456,

683

1,34

9,68

238

484,

555

8,83

6,56

084

646,

724

2,38

2,56

655

533,

520

3,56

3,25

762

Oth

er

Afr

ican

co

untr

ies

322,

563

3,03

8,28

164

564,

173

2,16

5,80

762

414,

782

1,67

1,77

916

467,

023

1,97

8,63

545

442,

135

2,21

3,62

638

Afr

ica

868,

682

4,72

2,50

010

01,

020,

856

3,51

5,48

910

089

9,33

710

,508

,339

100

1,11

3,74

74,

361,

201

100

975,

656

5,77

6,88

210

0

*The

are

a in

dar

k gr

ey s

how

s th

e av

erag

e da

ta o

ver

the

cons

ider

ed p

erio

d.

Sour

ce: I

STAT

(n.d

.)

Tabl

e 2.

10R

egio

nal

an

alys

is, i

n v

alu

e an

d q

uan

tity

, of

Ital

ian

am

mu

nit

ion

exp

ort

s to

th

e A

mer

icas

, 200

5–08

*

Ex

port

s, 2

005

Expo

rts,

200

6Ex

port

s, 2

007

Expo

rts,

200

8A

vera

ge e

xpor

ts, 2

005–

08

N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Net

wei

ght

(kg)

Val

ue

(EU

R)

%N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Net

wei

ght

(kg)

Val

ue

(EU

R)

%N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Cen

tral

an

d So

uth

Am

eric

a

523,

490

17,7

28,0

6559

536,

745

14,9

67,3

6376

417,

260

1,73

9,19

817

315,

096

2,11

2,19

124

448,

148

9,13

6,70

453

Nor

th

Am

eric

a1,

417,

176

12,2

72,0

8041

1,51

5,00

74,

739,

068

241,

976,

263

8,48

1,90

783

1,53

2,00

76,

746,

069

761,

610,

113

8,05

9,78

147

Am

eric

as1,

940,

666

30,0

00,1

4510

02,

051,

752

19,7

06,4

3110

02,

393,

523

10,2

21,1

0510

01,

847,

103

8,85

8,26

010

02,

058,

261

17,1

96,4

8510

0

*The

are

a in

dar

k gr

ey s

how

s th

e av

erag

e da

ta o

ver

the

cons

ider

ed p

erio

d.

Sour

ce: I

STAT

(n.d

.)


Conclusion

Thisstudyhasexploredtheissueofsmall-andlarge-calibreammunitionasit

affectsItalythroughtheperspectivesofprocurement,consumption,andex-

ports.Thescarcityofavailabledatapreventedacomprehensivepictureofna-

tionalammunitionconsumptionbytheItalianmilitaryandlawenforcement

agencies.Consequently,consumptionfiguresincludedinthischapter,while

certainlyusefulinprovidingindicationsofthescaleofthephenomenon,can-

notbeconsideredasstatisticallyaccurateextrapolations.Asforexports,sta-

tisticsneitherfromtheannualarmamentsreportoftheItalianprimeminister

toparliamentnorfromCoeweballowthepublictoclearlyidentifywhoim-

portedwhat.

Over the years studied, the ItalianArmy has faced numerous changes

such asbudget cutsand internal restructuring towards anall-professional

military.Duringthistime,significantstepshavebeentakentowardsachiev-

inggreatertransparencyandaccountabilitydefenceprocurement.Themost

significantstepinthisdirectionistheestablishmentofavoluntaryinter-gov-

ernmentalregime,operatedonthebasisoftheEDACodeofConductonDe-

fenceProcurement,approvedbyEuropeandefenceministersin2005.Theul-

timate goal of this regime, of which Italy is an SMS, is to promote fair

competition,transparency,accountability,andmutualsupport.

Despitethemainchallengesdescribedabove,theanalysisincludedinthis

chapterhasledtorelevantfindings.Byexaminingthecombinationofpro-

curement,consumption,andexportdata,itispossibletopiecetogetheran

accurateassessmentofItalianammunition.Thestudyhasrevealedthatwhile

themajorityofsmallcalibreammunitionisproducednationally,themajority

oflargecalibreammunitionandmunitionsappearstobeimported,witha

prevalenceofEuropeansuppliers.AccordingtotheDefence Contracts Bulle-

tins,thepresenceofindustrialpatentsfortheproductionofthemajorityof

largecalibreammunitionusedbytheItalianarmedforcesclearlylimitscom-

petitioninthemarketbyforcingtheuseofsingle-sourcecontractsandheavily

affectstheratiobetweennationallyproducedandimportedammunition.The

studyhasalsoshownthatthemajorcontractionoftheresourcesavailablefor

operations,training,andlogisticshashadconsequencesfortheItalianarmedTabl

e 2.

11R

egio

nal

an

alys

is, i

n v

alu

e an

d q

uan

tity

, of

Ital

ian

am

mu

nit

ion

exp

ort

s to

Asi

a, 2

005–

08*

Ex

port

s, 2

005

Expo

rts,

200

6Ex

port

s, 2

007

Expo

rts,

200

8A

vera

ge e

xpor

ts, 2

005–

08

N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Net

wei

ght

(kg)

Val

ue

(EU

R)

%N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Net

wei

ght

(kg)

Val

ue (E

UR

)%

Net

wei

ght

(kg)

Val

ue

(EU

R)

%

Cen

tral

Asi

a62

,580

351,

227

579

,639

820,

907

1111

1,54

384

0,95

19

90,7

0211

1,54

31

86,1

1653

1,15

76

East

ern

Asi

a1,

296,

374

5,24

3,86

067

1,36

7,07

34,

761,

636

661,

119,

829

5,22

5,57

659

1,23

4,19

65,

575,

702

471,

254,

368

5,20

1,69

458

Mid

dle

East

ern

coun

trie

s

367,

932

2,19

8,98

628

466,

920

1,62

8,46

323

683,

235

2,80

1,51

332

279,

502

6,26

6,19

652

449,

397

3,22

3,79

036

Asi

a1,

726,

886

7,79

4,07

310

01,

913,

632

7,21

1,00

610

01,

914,

607

8,86

8,04

010

01,

604,

400

11,9

53,4

4110

01,

789,

881

8,95

6,64

010

0

*The

are

a in

dar

k gr

ey s

how

s th

e av

erag

e da

ta o

ver

the

cons

ider

ed p

erio

d.

Sour

ce: I

STAT

(n.d

.)

Tabl

e 2.

12R

egio

nal

an

alys

is, i

n v

alu

e an

d q

uan

tity

, of

Ital

ian

am

mu

nit

ion

exp

ort

s to

Eu

rop

e, 2

005–

08*

Ex

port

s, 2

005

Expo

rts,

200

6Ex

port

s, 2

007

Expo

rts,

200

8A

vera

ge e

xpor

ts, 2

005–

08

N

et w

eigh

t (k

g)V

alue

(E

UR

)%

Net

wei

ght

(kg)

Val

ue (E

UR

)%

Net

wei

ght

(kg)

Val

ue (E

UR

)%

Net

wei

ght

(kg)

Val

ue (E

UR

)%

Net

wei

ght

(kg)

Val

ue

(EU

R)

%

EU27

15,4

90,5

8278

,418

,262

8913

,763

,495

53,0

59,6

1380

14,7

09,1

6379

,594

,714

8312

,629

,333

80,8

92,4

0476

14,1

48,1

4372

,991

,248

82

Non

-EU

Eu

rope

an

coun

trie

s

2,86

2,83

99,

601,

572

113,

288,

591

13,5

86,6

6520

3,25

8,94

516

,377

,182

174,

691,

692

25,3

18,1

8024

3,52

5,51

716

,220

,900

18

Euro

pe18

,353

,421

88,0

19,8

3410

017

,052

,086

66,6

46,2

7810

017

,968

,108

95,9

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forces invariousareas, includinga significant reduction in theacquisition

andconsumptionoflargecalibreammunition.

Regardingsmallcalibreammunition,despitetheregularconsumptionin

recentyears,ashighlightedbythedata,thereisnorecordofawardedcon-

tracts inDefence Contracts Bulletins.Twopossibleexplanations for thisdis-

crepancycanbeidentified.Firstly,asordinaryammunitionusuallyexpires

afterseveralyears,theroundsconsumedintheperiod2005–08couldhave

beenprocuredthroughoneormorecontractsbeforeJanuary2005and,there-

fore,didnotemergefromthebulletinsanalysedinthisstudy.Thesecondrea-

soncouldbetheamountofammunitionprocuredwitheachcontract:ifthe

resulting value falls below the EUR 1 million threshold, publication in

thebulletins,withtheresultingcompetition,wouldnotberequired.

WhilerecognizingtheItaliangovernment’sdesiretoprotecttheindustrial

privacy of Italian ammunition producers, more disaggregated data would

certainlybedesirable.ThisisparticularlytruewhenexaminingItalianam-

munitionexports.Thecurrentdataallowsfordestinationcountryidentifica-

tiononly,leavingalargegapinourknowledgeofthespecifictypesofammu-

nition exported. From the data available, it is nevertheless possible to

determinethatthemajorityofexportedItalianammunitionremainswithin

theEuropeanUnionarea.

Endnotes

1 SMSsareallowedotherexceptionsintermsofspecificprocurementswithoutcompetition,suchasincasesofpressingoperationalurgency,forfollow-onworkorsupplementarygoodsandservices,orforextraordinaryandcompellingreasonsofnationalsecurity.Insuchexceptionalcases,SMSswill,oncetheprocurementroutehasbeenconfirmed,provideanexplanationtotheEDA,initscapacityasmonitoroftheregimeonbehalfofSMSs.DatawillalsobeprovidedtotheEDAoncollaborativeprocurements(EDA,2005).

2 AuthorinterviewwithinternalsourcesintheItalianArmy,Livorno,June2009.3 Italy(July2008,sec.1,p.1,contractno.1434/303)andlistedasawardedinItaly(February

2009,sec.3,p.1).4 Italy(July2008,sec.1,p.1,contractno.1429/303)andlistedasawardedinItaly(February

2009,sec.3,p.2).5 Theinformationprovidedinthedescriptiveparagraphsisbasedontheinterviews

conductedbytheauthorwithinternalsourcesoftheItalianArmy.

6 TheItalianArmycontains17operativebrigades:5lightinfantrybrigades,2mountaintroopsbrigades,1parachutebrigade,1airbornebrigade,1armouredbrigade,1cavalrybrigade,1helicopterbrigade,1artillerybrigade,1anti-airartillerybrigade,1signalsbrigade,1engineeringbrigade,and1reconnaissanceinformationsurveillancetargetacquisition—electronicwarfare(RISTA-EW)brigade.The16brigadesnotconsideredinthispaperconsistofaround2,500–2,800soldierseach.

7 5lightinfantrybrigades,2mountaintroopsbrigades,1parachutebrigade,1airbornebrigade,1armouredbrigade,1cavalrybrigade.

8 1helicopterbrigade,1artillerybrigade,1anti-aircraftartillerybrigade,1signalsbrigade,1engineeringbrigade,1RISTA-EWbrigade.

9 ThemajorItaliansupplieristheFiocchicompany,whichprovidesallconventionalsmallcalibreammunitiontotheItalianarmedforces.

10 Coewebistheonlineinformationsystemdedicatedtoforeigntradestatistics,providingonamonthlybasisawealthofinformationontradeflowsbetweenItalyandtherestoftheworld.ThisinformationisderivedfromthesingleadministrativedocumentandfromIntrastatformsacquiredbythecustomsagencyasregardsextra-EUandintra-EUflows,respectively.ThedatacollectedandreceivedbyISTATisfirstprocessedincompliancewithEuropeanCommunityregulationsapplyingtostatisticsonforeigntrade,andsubsequentlyrevisedandvalidatedbyreviewers.Thedataprocessingprocedurealsoprovidesstatisticaldataonoperatorsandbusinesses,aswellastimeseriesbyindexlinks(ISTAT,n.d.).

11 HarmonizedSystem,ch.93,‘Armsandammunition;partsandaccessoriesthereof’,heading06.12 TheEU27areAustria,Belgium,Bulgaria,theCzechRepublic,Cyprus,Denmark,Estonia,

Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,theNetherlands,Poland,Portugal,Romania,Slovakia,Slovenia,Spain,Sweden,andUnitedKingdom.

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Chapter 3 An Initial Survey of Small Arms and Light Weapons Ammunition Production, Procurement, Allocation, Exports, and Transfers by the French Law Enforcement and Military ServicesPierre Gobinet

Introduction

Theinitialaimofthisworkingpaperwastodetermineprocurementandcon-

sumption patterns for small arms and light weapons ammunition by the

Frenchgendarmerie,police,andarmedforces.Theterm‘ammunition’refers

inthiscontexttobothsmall(<12.7mm)andlargecalibreammunition(>12.7

mm),andincludesmortars(50–120mm),grenadelaunchers,recoillessrifles,

rocketlaunchers(firingrockets120mmorsmaller),andcartridgesforanti-

materielandsniperriflesandheavymachineguns.

Duetotimeconstraints,andtoanobviousreticenceonthepartofthere-

spectiveFrenchprocurementauthoritiestoprovidedetailedfiguresonallof

thesecategories,theauthorselectedthemostpopularandwidelystandard-

izedcalibresinordertoaddresstheissuecomparativelyandattemptana-

tionalcompilation.Totheextentpossible,theauthorinitiallyrequesteddata

goingbackseveralyears,andsoughttodifferentiatequantitiesandpercent-

agesof importedammunition from thatmanufactured inFrance.Theend

goalwastoaccountforvariancesandpatternsinprocurementandconsump-

tion.Inaddition,theauthorsoughttodeterminetheexistenceandextentof

anyrecordedammunitiontransfersperformed‘in-house’bythearmedservices

themselvestocountriesthattraditionallyreceiveFrenchmilitaryassistance.

Thefirstsectionintroducesthemethodologyusedinthisstudy.Acombi-

nation of open-source materials and either face-to-face or telephone inter-

viewswithFrenchprocurementagenciesandofficialsallowedtheauthorto


obtaindataregardingthemanufacturingandprocurementofammunitionby

theFrenchforces.Anumberofusefulpointsofcontactweresolicitedand

kindlycontributedpreliminarydataandbackgroundinformationregarding

basicprocurementandallocationfigures.However,theissueofammunition

transfers remains problematic and controversial: data, if recorded, is frag-

mentedwithineachadministrationand the fewofficialswhoare rigorous

enoughtocompileitdonothavetheauthoritytodivulgeit.

ThesecondsectionisdevotedtoFrenchammunition-manufacturingca-

pacity and starts out by placing it within the wider scheme of the French

weapons industry.Thishelps tounderstand thepriorities (or lack thereof)

giventoammunitionmanufacturing.Researchfindingsshowthatsmallcali-

bre, cartridge-based manufacturing is no longer nationalized and that the

Frenchadministrationresortstoimportsandtenderinvitationstosupplyits

lawenforcementandarmedserviceswith9mmand5.56mmrounds.Medi-

umandlargecalibreammunitionisstillproducedinFrancebyoneconsorti-

um,whichcatersforFrenchforcesandexportsasubstantialamountof its

production abroad. The European Energetics Corporation (EURENCO) is

usedinthisinstanceasacompanycasestudytoillustratethecontradictions

oftheFrenchadministrationinthefieldofammunitionmanufacturing.

The third section delves into the subject of ammunition allocation to

Frenchlawenforcementandarmyunits.Figuresareclearerforlawenforce-

mentunitsduetobettercontactswithgendarmerieandpoliceheadquarters.

AllotherfigureswerekindlycontributedbytheDélégationgénéralepour

l’armement(DGA).Overall,mostsourceshighlightalackofbudgetandcon-

siderationofinternalplanningforammunitionallocationinthearmedforces.

Ammunitionisaconvenient,easilymodifiablevariableinabudget’sadmin-

istration,whichmayexplainthedifficultyinobtaininganydefinitiveyearly

figures.The trendpoints towardsnotenoughammunitionrather than too

much,andthisisexemplifiedbyopen-sourceparliamentaryreportsondo-

mesticandoverseas theatresofoperationssuchasAfghanistan. In thisal-

legedcontextofdeprivation,theextentofammunitiontransferscarriedout

unilaterallybyindividualFrenchlawenforcementormilitaryunitsabroad

canbequestioned.

Methodology

BasicpreliminaryInternetsearchesfocusedexclusivelyonFrenchlanguage

results.Thismethodrevealedaninterestingarrayofofficialparliamentary

reportsandplenarysessiontranscriptsmadeaccessibletothepublicviathe

websitesoftheNationalAssemblyandtheMinistryofDefence.Asubstantial

amountof informationregardinggenerictrendsandnon-quantitativedata

canthusbeacquiredviatheInternet.Althoughthesereportsdonotprovide

recentstatisticsorquantitativedata,theyrefertorecentandactualtrendsin

Frenchammunitionmanufacturingandprocurementandpavethewayfor

furtheravenuesofresearch.Oncethesesourceswereexploited,theauthor

ascertainedwhetherthistopicwasalreadycoveredbyexistingresearchcar-

riedoutbyFrenchthinktanksandNGOs.Resultswerediscouraging.Ac-

cordingtotheLyon-basedObservatoiredesarmements,compilingaccurate

ammunitionpurchasingdatainFranceisnotfeasible,sincetherearenocen-

tralizedammunitionrecordsbridgingthedemandsofthevariousministries

(defence, the interior,finance,etc.).1Combinedammunitionallocationdata

hasneverbeenpublishedbyorsubmittedtoparliament,andpublicdocu-

mentspertainingtoweaponsmanufacturingandexportsseldomdisaggre-

gateammunitionstatistics.

Theauthorthensoughttoidentifythemostadequatesourcesandpoints

ofcontactwithintheFrenchadministrationthatwerelikelytoprovideup-to-

date,consolidated informationonFrenchammunitionprocurement.There

areseveraldifficultiesinherenttopinpointingtheseindividualsandacquir-

ingthistypeofdata:

• Finding the appropriate service involved:Francehastwomajornational

lawenforcementservices(thecivilianPolicenationaleornationalpoliceand

themilitaryGendarmerienationaleornationalgendarmerie),threemilitary

corps(army,airforce,andnavy),acustomsauthority,apenitentiaryadminis-

tration,andanenormousadministrativeapparatustaskedwithcoordinating

their respective procurement and logistics. Furthermore, logistical preroga-

tivesinvolvingammunitionmanagementareoftendecentralizeddowntore-

gionalcommandlevel,thusmakinggeneralstatisticsdifficulttocompile.


• The nature of the data required: Each administration keeps its own

records,and,eventhoughitmayagreetodivulgetheserecords,thereis

currentlynocommon,centralizedsetofrecordsreferringtotheprocure-

mentandallocationofammunition.Oftenthedatahasyettobecompiled

withineachserviceandofficialswillnotbothercompilingitforthebenefit

ofaforeignprojecttheyarenotyetfamiliarwith.

Oncetheappropriatepointofcontactwasidentified,preliminarytelephone

contactwasmadeandatailoredletterofrequestwassentbytheauthorinor-

dertoexplainthenatureofthesurveyandallowtimeforthecontactperson

togatheralltheelementsrequired.Asidefromthegendarmeriepointofcon-

tact,findingtherestoftheindividualswaslargelytheresultofatrial-and-

errorprocess.Allthecontactsandinterviewswereinitiatedbetweentheend

ofAprilandthebeginningofJuly2009.Therequesteddatawasoftenavaila-

blebutunprocessed,and theofficials requestedclearanceandhierarchical

authorization before divulging any figures. No official documents were

handedover,andaccesstothespecialforces,whichusuallyhavetheirown

decentralizedammunitionprocurementscheme,wasnotgranted.

French ammunition-manufacturing capacity

Althoughthisstudyfocusesmainlyon theprocurementandconsumption

patternsofsmall-andlarge-calibreammunitionbytheFrenchgendarmerie,

nationalpolice,andarmedforces,theauthorsoughttoframethedatawithin

thegeneralbackgroundofFrenchweaponsproductionandprocurementfor

comparativepurposes.Twomaincategoriesofopensourceswere initially

usedtoacquirerecentfigures,trends,andreliablestatisticsonFrance’scur-

rentarmsandammunitionproductioncapacity:thelatest2006and2007an-

nual arms exports reports to parliament (France. Ministère de la Défense,

2007b;2008) andanumberofparliamentarydiscussions,comments,andde-

bates regarding the Ministry of Defence’s latest annual budget allocations

giveninthebudgetsfor2008and2009.

Background figures on the French defence industry

Availableopensourcessuchastheonespreviouslygivenprovideafairlyac-

curatepictureofthestateoftheFrenchdefenceindustryanditsimportance

inthecountry’soveralleconomyoverthepastsixyears(France.Assemblée

nationale,2003,para.1).Themaincharacteristicsoftheindustryare:

• anestimated4,000companiesandseverallargeindustrialgroups;

• an average annual turnover of approximately EUR 14 billion (USD 15.8

billionin2003),EUR4.5 billion(USD5.09billionin2003)ofwhichisgener-

atedbyexports;and

• morethan170,000jobsdirectlyinvolved,50,000ofwhichcouldbedirectly

linkedtoarmsexports (France.MinistèredelaDéfense,2009,p.5),result-

inginthearms-manufacturingindustrybeingthusconsideredanimpor-

tantemploymentsector.

The French government’s 2008 annual arms exports report to parliament

(France.MinistèredelaDéfense,2009,p.11)showsthatFranceroughlyranks

as theworld’s fourth largestweaponsexporter (7.7percentofworldwide

sales),behindtheUnitedStates(52.3percent),UK(13.7percent),andRus-

sianFederation(8.2percent),andiscloselyfollowedbyIsrael(5percent).

OrdersandpurchasesofFrenchweapons increased fromEUR5.66billion

(USD 7.75 billion) in 2007 to EUR 6.58 billion (USD 9.67 billion) in 2008

(France.MinistèredelaDéfense,2009,p.16).AccordingtotheFrenchNGO

Observatoiredesarmements,France logicallyseeks toboost itsarmssales

andfacetheever-strengtheningcompetition(Collin,2008).Tothisend,suc-

cessivereportstoparliament,originallyintendedascontroltoolstomonitor

Frencharmsexports,haveprogressivelybeenturnedintosemi-promotional

brochurestomarketFrenchmilitaryequipment.Theyare,however,usefulto

understandanddecipherFrance’scurrentarmsproductionandtradecapacity.

Thegovernment’sstatedobjectiveforoverallregisteredordersin2008was

EUR6billion(USD8.82billion),andthistargetwassetatEUR7billion(USD

9.54billion)for2010.Francethushopestoeventuallyincreaseitsshareoftheglo-

balarmsmarketto13percent,roughlythesameasthatoftheUK(Collin,2008).


Current trendsTheworldwideweaponsbusinessisextremelycompetitiveandmostmanufac-

turersrelyonmassiveexportcontractstosustaintheirmarginsandprofits.For

theFrenchgovernment,salvationforitsnationalweaponsindustrylobbylies

incross-border,pan-EuropeanconsolidationtosafeguardtheEU’sindustrial

defencebase.TheFrenchgovernmentstillholdssubstantialstakesinThales

(27percent),Safran(31percent),DCNS(75percent),Nexter(100percent),

andSociéténationaledespoudresetd’explosifs(SNPE)(100percent),which

areallheavilyreliantonthedomesticmarket(Jane’sInformationGroup,2009).

Franceis,however,inapositionwhereitcannolongeraffordtopurchasearms

exclusivelyfromitsownnationalindustry,thereforethemorearmscanbesold

abroad,themoreproductioncostsforthisequipmentwilldecrease,andthisin

turnisexpectedtofacilitatearmspurchasesandequipmentprocurementfor

French forces. Ironically, therefore, exports reduceproductioncosts,making

theweaponscheaperforFrenchforcestobuydomestically.

TheFrenchgovernmenthasalwaysbeentightlyinvolvedinthepermanent

restructuringprocessofboththeFrenchandtheEuropeandefenceindustries,

e.g.withthecreationoflargeconglomeratessuchasEADS(EuropeanAero-

nauticDefenceandSpaceCompany)orThales.Thisstate-sponsoredeconomic

rationalizationisnotuniquetoFranceandappliestomostWesternEuropean

countries.Franceconsidersthatitsnationaldefenceindustryisatokenofna-

tionalautonomyanddecision-making freedomon the internationalagenda.

Thisapproach,onceagain,issharedbyanumberofEUcountriesandefforts

havebeenmadetouniteproductionendeavoursandcutproductioncosts.The

complexityofarmssystemsledtotheappearanceandprogressivesupremacy

ofEuropeanandinternationalindustrialgroupsthatcouldmeettheR&Dcosts

andassumetherisksoflarge-scaleweapons-manufacturingprogrammes.

Accordingly, French authorities sought to compartmentalize their mili-

taryequipmentrequirementsintothreedistinctcategories, whichareclearly

delineated in the national military programme outline covering the years

2009–14(France.Assembléenationale,2008d,s.4.1;2009e):

• equipmentthatpertainsexclusivelytotherealmofFrenchnationalsovereignty

andautonomousdefencepotential,includingnuclearcapacityanddeterrence;

• militaryequipmentthatcouldobviouslybenefitfromEuropeancoopera-

tion—thisinitiativewaskick-startedin1997byFrance,theUK,andGer-

many,whosoughttoconsolidatetheirrespectivedefenceindustries.Some

examplesarethecreationofEADS,Thalesinitiatingasuccessfulmultina-

tionalstrategy,andthelaunchofintegratedarmsprogrammessuchasthe

AirbusA 400 Mfreightaircraft;and

• militaryequipmentthatisalreadyproduced,oftenworldwide,onalarge

scaletoreducemanufacturingcosts,andwhichcanthereforebepurchased

cheaperabroad—inthepresentcase,smallcalibreammunition.

Dire straits for French ammunition-manufacturing capacityFrenchammunitionmanufacturinghaduntil recentlybeenmainly carried

outbyGIAT Industries,Manuhrin,orAnthena.However,itfailedtoremain

affordableinaEuropeanarmsproductionschemedominatedbyunrelenting

competition.Intimesofeconomichardshipandbudgetrestraints,thecom-

petitivenessofmanufacturingcompanieswasaprerequisiteiftheywantedto

obtaincontractsandmeetbusinessdeadlinesandrequirements.GIATIndus-

tries was often deemed too expensive in this regard. It progressively sub-

contracted and transferred its small arms and light weapons ammunition

manufacturing portfolio to small companies that could produce cheaper

rounds.Anarmslegislationproposaldated18July2007statesthat: ‘asre-

gardssmallarmsandammunition,allcalibresincluded,Franceisundergo-

ingmassivedeindustrialization.Land-basedarmament,representedbyGIAT

Industries,doesnotfarewell’(France.Assembléenationale,2007c).

The restructuring of GIAT Industries into Nexter in 2006 allowed the

group’s ammunition-manufacturing capacity to be substantially updated

withintheNexterMunitionssubsidiary.Nextersuccessfullycarriedonwith

the GIAT 2006 business plan, which originally called for a five-year, EUR

85 million (USD 106.76 million) medium calibre ammunition procurement

planinitiatedin2004.Tothisend,NexterMunitionsinvestedinanewplant

inLaChapelleStUrsin,Bourges.However,thisfacilityishighlydependent

onthestabilityandcontinuityofgovernmentordersandpurchases(France.

Assembléenationale,2009a).


NexterMunitionsiscurrentlyFrance’sonlycompanywiththetechnicaland

industrialknow-howtomanufacturemediumandlargecalibreammunitionin-

tendedmainlyforcannonweaponsystems(20–25–30mm).Alongwithitssub-

sidiaries,Nexterexportsarangeofproducts,suchastheCaesarartillerysys-

tem.Largecalibreammunitionformortars(81mmforinfantryand120mmfor

artillery)isstillmanufacturedandexportedbyTDAArmementinLaFertéSt

Aubin,aThalessubsidiary.Grenadelaunchers(basse vitesse létalité réduite)are

stillmanufacturedbyALSETEX,asubsidiaryoftheLACROIXgroup.Rocket

launcherammunitionisreportedlynolongermanufacturedinFrance.

However,althoughFrancehaskeptanindustrialammunition-manufac-

turingcapacityformediumandlargecalibreswithNexterMunitions,itpur-

chasesandimportsallofitssmallcalibreammunitionfromabroad.2Accord-

ing to DGA, the last French company to manufacture small arms calibre

ammunition,Anthena,ceaseditsactivitiesin2007.3

The case of SNPE’s EURENCO provides an appropriate example. An

April2009parliamentaryreportmentionstheexpectedandcontroversialpri-

vatizationofSNPE,France’sonlyammunitionpowdermanufacturer(France.

Assemblée nationale, 2009d). SNPE’s current turnover is estimated at ap-

proximatelyEUR640 million(USD869million).TheFrenchgovernmenthas

intendedtoprivatizeSNPEforawhile,believingthatthegrouphadtoun-

dergosubstantialchangesifitweretosurvive(France.Assembléenationale,

2009c).Somepersonnelcutswereannouncedon7January2009(France.As-

sembléenationale,2009b).

SNPE’s subsidiary responsible for ammunition component production,

EURENCO,isinverypoorfinancialcondition(France.Assembléenationale,

2009b)andwoulddoubtlessbenefitfromclosecooperationwithNexter.This

couldtransferthedebatetotheEuropeanlevelandstillleaveroomforna-

tionalsovereigntyconcerns.CreatedinJanuary2004,EURENCOisaninde-

pendentsubsidiaryofSNPEmatériauxenergétiques,andmainlymanufactures

powderandexplosivesintendedforammunition,shells,andsmallmissiles.It

isjointlyownedbySNPEmatériauxenergétiques(60.2percent),Sweden’sSaab

(19.9percent),andPatria(19.9percent),aFinnishcompany.EURENCOhasan

annualturnoverexceedingEUR140million(USD191million),withmorethan

800employees(withEURENCOFrancerepresentinglessthan400 employees)

andfiveindustrialplantslocatedinBelgium(Clermont),Finland(Vihtavuori),

France(Sorgues,Bergerac),andSweden(Karlskoga)(EURENCO,2010).Accord-

ing to the Eurosatory arms show Internet site, EURENCO has an Explosive

ChargesandAdditivesBusinessUnitandaPropellantsandPropellingCharges

BusinessUnit,thelatterbeingresponsiblefor:

singleandmultibasepropellants,sphericalpowders(manufacturedby

the Belgian subsidiary PB Clermont), nitrocellulose and double base

premixpasteformilitarysmall,mediumandlargecaliberammunition

inadditiontoreloadingpowdersforcivilcartridgesandignitionpow-

dersformediumandlargecaliberammunition(EURENCO,2010).

Thisprivatizationprocess,whichisveryunlikelytostartearlierthan2011,is

stronglycriticizedbyFrenchpoliticiansaslackingstrongindustrialgoalsand

possiblyjeopardizingFrenchammunitionautonomy.TheplantinSorguesis

considered to be France’s only remaining explosives manufacturing plant

thus,accordingtoDGA,thecompanystillholdsstrategicpotential.4Itisable

toproduceammunitionfortheFrencharmedforcesandshouldthusmain-

tainthebulkofitsmanufacturingcapacityinFrance.Thisisacontradictory

standbecausesofarthestateseemsnevertohaveeitherinvestedenoughin

thecompanyororderedenoughammunitiontokeeptheproductionfacility

goinghealthily.EURENCO’sdifficultiesareduetodelaysintheplacingand

processingofstateorders.Meetingbothends—strategicrelevanceandindus-

trialcompetitiveness—willdoubtlessprovetobeadifficulttask.Themost

likelysolutionmentionedinthereportsiscooperationinthisfieldwithNex-

ter(Jane’sInformationGroup,2009).

However,Francehasmaintainedindustrialcapacityinthefieldofammu-

nition-manufacturing equipment. According to Groupe de recherche et

d’informationsurlapaixetlasécurité(GRIP),ManurhinEquipmentisoneof

thebiggestproducersofsmallarmsandlightweaponsammunition-manu-

facturingequipment,alongwithBelgium’sNewLachaussée,EDBEngineer-

ing,andGermany’sFritzWerner.AccordingtotheGRIPstudy,asurprising90

percentoftheworld’smodern(meaningNATO-compatible)militaryammuni-

tion-manufacturing plants were apparently set up and tailored by German,

French,orBelgiancompanies(Anders,2005,para.3).


Research findingsAllocation to law enforcement servicesInMay2003theFrenchInteriorMinistrysignedacontractwithJ.P.Sauer&Sohn’s French partner Rivolier SA for the provision of 250,000 SIG SauerSP2022pistolsdestinedforgendarmerie,nationalpolice,customs,andpeni-tentiaryadministrationfieldunits(SIGSauer,2008).Thisjointprocurementcontractwasintendedtoleadtosubstantialmaintenanceandprocurementsavings and would logically imply that ammunition procurement is nowstandardizedthroughouttheFrenchlawenforcementservices(France.As-sembléenationale,2007a).Sofartheauthorhas,however,beenunabletopin-point theadministration taskedwithammunitionprocurement forall lawenforcementservicesandinfactdoubtsitsexistence.Eachserviceseemstopublishunilateral tender invitations forammunitionbidsandmanages itsownammunitionrequirementsseparately.

Table 3.1Gendarmerie average annual ammunition procurement and allocation figures 9 mm Browning

12-gauge shotgun

5.56 mm 7.62 mm Tear gas grenades 56 mm

Flash-ball 44 x 83 mm

TASEr pistol cartridges

Number of rounds purchased annually

10 million

No purchases: procurement from national stockpiles

800,000 220,000 10,000 15,400 13,500

Number of rounds allocated to units annually

11 million

1.49 million 3.6 milliona

160,000 7,800 15,000 1,000

Recent in-house exports/cessions

010,000b

0 0 0 0 0

Notes:

aMuch fewer are purchased (around 800,000 in 2009); the bulk are transferred or most likely sold to the

gendarmerie by the French Army.b Transferred or sold to the French Navy.

Source: Figures provided by Equipment Procurement Division, Direction générale de la gendarmerie nationale

(DGGN), Bureau des matériels

National gendarmerieIn-house ammunition management practices also differ with each service.

Forinstance,thenationalgendarmerieseparates‘practice’ammunitionfrom

‘service’ammunition(carriedbyofficersondutyinthefield).Thebulkofthe

purchasedammunitionismadeupof9x19mmParabellumcartridgesfor

therecentlyissuedSIGSauerSP2022,and5.56x45mmNATOfortheFrench

Army’sFAMASstandardassaultrifle.AccordingtotheGendarmerieEquip-

mentProcurementDivision,theaverageannualammunitionpurchaseand

allocationfiguresforgendarmerieunitsareasshowninTable3.1.5

Eightypercentof thesmallarmsand lightweaponsammunitionpur-

chasedbythegendarmerie(Table3.1) isallocatedtotheunitsas ‘practice’

ammunition.Therestislabelledas‘service’ammunitionandisestimatedata

constantfourmillion9mmcartridgescirculatinginusebygendarmerieunits

inthefieldthroughoutFrance.This‘service’ammunitionisdecategorizedafter

fouryears(tomakesureserviceammunitionisrenewed)andtransferredwithin

eachunittothe‘practice’ammunitionstocks.Asinmostlawenforcementor-

ganizationsthroughoutEurope,thetasksanddutiesattributedtoofficershave

expandedtenfold,leavingverylittletimeforshootingpractice.Commanding

officersthereforemakeapointofspendingtheirrespectiveunits’entireyearly

ammunitionallocation.Gendarmerieunitsthusdonot‘pileup’surplusam-

munitiononayearlybasisandeachunitfirestheyear’sallocationof‘drill’am-

munitionaccordingtoarigorous,decentralizedshootingpracticeagenda.The

gendarmerie’sequipmentbudget is tight,ammunition isnotwasted,and is

boughtinjusttherightquantitybasedonthepreviousyear’sneeds.Asacon-

sequence,gendarmerieheadquartersdonotreportanysubstantialorsystem-

aticammunitiontransfers,whetherpaidorgratuitous,toanyforeigncountry.

Inter-agencytransfersdooccur,however,onaregularbasis.

Since France does not have a small calibre ammunition manufacturer,

therearethreemainsourcesofammunitionprocurementforthegendarmerie:

• cessionsfromthearmy(mainly5.56mmNATO);

• NATO’sMaintenanceandSupplyAgency;and

• publicinvitationstotender.Inthislastinstance,theinvitationispublicly

advertised in theBulletin officiel des annonces des marches publics6 and the

EDA’sElectronic Bulletin Board on Defence Contract Opportunities.7Thisoption


Tabl

e 3.

2N

atio

nal

po

lice

pu

rch

ases

, 200

4–09

Cal

ibre

20

0420

0520

0620

0720

0820

09

5.56

mm

Am

ount

Pr

ice

(EU

r)

320,

000

74,

630

620,

000

144,

714

807,

000

246,

308

160,

000

51,1

65—

30,

000

optim

ized

40,

544

630

,000

2

34,9

95

9 m

mA

mou

nt

Pric

e (E

Ur

)5,

290,

000

69

5,95

224

,900

,000

3,

744,

628

15,1

00,0

00

1,93

5,60

611

,800

,000

1,

660,

231

12,1

00,0

00

2,14

9,11

7 1

8,14

0,00

0 pr

actic

e 2

,933

,070

8 ,4

00,0

00 o

pera

tiona

l 2

,242

,356

.38

SPA

mou

nt

Pric

e (E

Ur

)3,

500,

000

638,

365

——

——

—

7.65

mm

Am

ount

Pr

ice

(EU

r)

1,50

0,00

0 27

8,14

0—

——

——

Sour

ce: F

igur

es p

rovi

ded

by D

APN

, Bur

eau

de l’

arm

emen

t et d

es m

atér

iels

tech

niqu

es

is least favoured by procurement officers, because the tender selection

processistediousandpainstakinglylong(atleastayearfromthetimethe

invitationispublished).However,suchcontractsaretypicallyissuedfora

durationoffouryearsandwillinclude,dependingonyearlybudgetallo-

cations,aminimumandmaximumquantityofammunitiontobemanufac-

turedanddeliveredbythetendertothefourlawenforcementadministra-

tions. Among the most common and recurrent tenderers that line up

proposals for these contracts are: RUAG (Switzerland), FN Herstal (Bel-

gium),MetallwerkElisenhütteNassau(Germany),CompanhiaBrasileira

deCartuchos(Brazil),IsraelMilitaryIndustries(Israel),BAE(UK),General

Dynamics Ordnance and Tactical Systems (Canada), General Dynamics

SantaBarbaraSistemas(Spain),andADCOM(UnitedArabEmirates).Pro-

curementandimportationwilllikelyinvolvedistributionthroughoneof

France’simporterssuchasSidam,Rivolier(Fiocchi),orHumbert.8

National police

Thenationalpoliceemploysimilarammunitionmanagementmethods.Am-

munitionisacquiredviapublicinvitationstotender,althoughitisunclear

whetherthesearenowjointlyissuedbythegendarmerie,thenationalpolice,

thepenitentiaryadministration,andcustoms,whichnowallusetheSIGSau-

erSP2022.TheDirectiondel’administrationdelapolicenationale(DAPN),

theadministrativepoliceheadquarters,allegedlycentralizetheirinvitations

totenderattheBureaudel’armementetdesmatérielstechniques,whichca-

tersforallterritorialunits,includingFrenchoverseasdepartmentsandcolo-

nies.Individualpoliceunitsthenpurchasetheammunitionusingtheirown

budgetallocations.Thereareveryfewsurplusstocks,sincepurchasesaretai-

lored to training and operational use. The only exception to this occurred

whenthepolice’s .357MgManurhinrevolversand7.65Uniqueautomatic

pistolswererecentlyreplacedbythe9mmSIGSauerSP2022.Therespective

surplusammunitionwascentralizedandisallegedlyundergoingdestruction.

Similarly,ammunitionisnotexportedortransferredabroadundertheaus-

picesofpolicecooperationagreements.


SincetheFrenchnationalpolicehaveroughly30percentmorepersonnel

thanthegendarmerie,onewouldexpecttheammunitionprocurementfig-

uresforthepolicetobeestimatedaccordingly.FiguresprovidedbyDAPN

contradict this assumption, however, by showing an obvious absence of a

year-to-yearprocurementpattern.Althoughpoliceheadquartersdidnotpro-

videallocationdata,purchasedatawaskindlyprovidedfortheperiod2004–09.9

Army unitsDatapertainingtotheFrencharmedforces’ammunitionallocationcanonlybe

obtainedviaofficialsources.Theauthorinitiatedasearchbyusingdocuments

produced by the Joint Staff Headquarters in 2007 (France. Ministère de la

Défense,2007a).Accordingtothisdocument,jointammunitionprocurementfor

thethreearmedservices,andformerlytosomeextentforthegendarmerie, is

planned and implemented by a commission, which gathers twice a year and

isheadedbythegeneralcommandingofficeroftheJointLogisticsDivision.This

commissioncoversprocurementandacquisitions,NATOidentificationandref-

erencing, and maintenance and surplus management. Its important role was

confirmedbytheseniorDGAofficial’sinterviewinMay2009,makingitanobvi-

ouspointofcontact.Severalunsuccessfulwrittenrequestsweresenttoarmylo-

gistics.FurtherresearchallowedtheauthortopinpointastaffofficeratArmy

StaffHeadquarterswhoexplicitlydeclared,bytelephone,thathishierarchycat-

egoricallyrefusedtocontributeanydatatotheproject.

Parliamentaryreportscommentingondefencebudgetallocationsfor2008

and 2009, respectively, tend to confirm that ammunition procurement has

been of relatively low concern compared to heavier, higher-value military

equipment.The2008defencebudgetallocationforesawobviouscutsinoper-

ationalappropriationsthatwouldinevitablyenduphinderingammunition

procurementforthearmy.InaFrenchparliamentaryreportdatedOctober2007

regardingthe2008defencebudgetallocationplan,thearmywasportrayedas‘a

consumerwhopurchasesthelatest,state-of-the-artpersonalcomputerbutdoes

not have enough cash to buy the printer, the Internet connection or the ink

cartridges’ (France. Assemblée nationale, 2007b; author’s translation). More

disturbing,thereportstatedthatFrenchArmysoldiersinAfghanistanwould

not have enough ammunition to operate efficiently in high-intensity conflict

zones.Operationalunitshadbeenrepeatedlyreportingsubstantialconstraints

regardingbothdrill(blank)andliveammunition,andadditionalbudgetcuts

wouldhavenegativeconsequencesfortheoperationalpotentialandsafetyof

troopsandpersonnel stationedabroad (France.Assembléenationale,2007b).

Thelackofblankammunitionhinderedplatoondrillpractice,andstaffofficers

wereaskedtoresorttodubiousfieldsimulations.

Stocksurplusalsorequiredattention,sincesomemunitionshadreachedthe

endoftheirlivesyethadnotbeenproperlyrecycled.Thereportcalledforagen-

eral reflection on ammunition procurement, since the army apparently had

troubleselectingasmallcalibreammunitionmanufactureraswellasmanaging

itsammunitiondepots.The2007parliamentaryreportwaspreoccupiedwith

the disappearance of French industrial savoir-faire in terms of ammunition

making,andclearlystatedthattheFrenchArmyboughtitssmallcalibreammu-

nitionsuppliesfromforeigncompanies(France.Assembléenationale,2007b).A

yearlater,theparliamentaryreportonthe2009defencebudgetallocationplan

statedthatFrancehad2,400soldierspostedinAfghanistan,two-thirdsofwhom

weregroundtroopswithfieldcombatcapacity.Additionalequipmentalloca-

tionofEUR9 million(USD13.23million)wasdistributedin2008,including900

tonsofammunition(specificsandcalibreswerenotstatedinthereport),which

equalledroughlyhalfatonofammunitionpersoldierinthefield.Ammunition

prioritywasthusgiventotroopsstationedinAfghanistan,therebydepleting

theammunitionstocks inFranceandforcingFrenchregimentstouse lower-

qualityammunitionforshootingpractice(France.Assembléenationale,2008a).

Table 3.3Average army procurement

9 mm 5.56 mm 7.62 mm Mortar shells, 81 mm

Infantry rockets, AT4CS

Medium calibre: 20, 25, and 30 mm

Average amount purchased annually

6 million 50 million 6 million 20,000 3,000 25,000

Cost (EUR million)

1.5 15.0 3.0 8.0 6.0 No data

Source: Figures provided by DGA


Thegovernmentalsoplannedto allocateEUR61.7 million(USD90.7mil-

lion),labelledaspaymentcredit,toammunitionprocurementin2009(France.

Assemblée nationale, 2008a). According to the parliamentary report, this

wouldbejustenoughtocoverstandardoperationalneeds,butwouldprove

inadequate to anticipate stock/surplus evolution, as well as an immediate,

emergencyprocurementrequirement.If,forinstance,thearmyweretodeploy

the30,000 troops requiredby itsoriginaloperational contract, theexisting

army stocks would prove largely insufficient to provide all of them with

properammunitionlevels.Thisseemstobearecurrentthemeinparliamen-

taryreports,whichstate thatFrancereliesonforeign-basedcompaniesfor

ammunitionprocurement.This,ofcourse,createsaformofdependenceon

theseforeignmanufacturingcompaniesthatisincompatiblewiththeprinci-

pleofanautonomous,self-reliantnationaldefencecapacity.Moredisturbing

isthefactthatthesubjectofammunitionavailabilitylacksthealluretobe

properlydiscussedinparliamentarydebates.Insomesessionsthesubjectis

seeminglyomittedandtheministerofdefencesimplyskipsoverthesubject

(France.Assembléenationale,2008b).

According toDGA,about50million5.56mmNATOcartridgesareor-

deredeachyearforthethreeservicescombined—army,airforce,andnavy—

with the army being, of course, the main recipient. The average purchase

priceisEUR250–300(USD341–409)per1,000cartridges.Smallcalibream-

munitionexpenditureandbudgetsareontheincreaseannually,withanaver-

ageannualspendingofEUR20–30million(USD27.3–40.9).10Theauthorre-

questedaclearedcopyofthebusinesscontractbetweenDGAandArmyStaff

Headquarters,withoutsuccess.

Ammunitionisconsideredaconvenientadjustablevariantforthedefence

budget,becausecutsorincreasescanbeimplementedquicklywithouttedi-

ouspreliminaryallocationplanning.Furthermore,ammunitionmanagement

is,surprisingly,notgivenhighprioritywithinthearmedforces.Oneinterest-

ingavenueofresearchiswhetherornottheincreaseinammunitionbudgets

reportedbyDGAcouldalsobepartlyattributedtoanewshootingpractice

doctrinecalledIST-Corinstruction sur le tir de combat,modelledaftertheUS

andIsraeliarmies,whichissupposedtosimulate/duplicatecombatshooting

ascloselyaspossibleandthushandovertheoverallresponsibilityofthedrill

totheshooterhimself.Severalunofficialforumsdeclare,however,thatthis

policyhasloosenedcontrolovertheuseofammunitionbyarmypersonnel

andthatitisoftenveryeasytoobtainlive,unaccounted-forammunitionin

anarmyregiment(deGranvil,2008).

Estimated combined annual purchase figures for 2009

Table3.4compilestheannualpurchaseestimatesprovidedbythethreead-

ministrationsforthemainammunitioncategoriesfor2009.Again,thepolice

figuresshownaboveshowmajoryear-to-yeardiscrepanciesinthepurchase

amountsandaccountforvariousammunitionprocurementadaptationsand

alterations.Purchaseamountsforthegendarmerieandthearmyshouldalso

beexpectedtodiffersubstantiallyfromyeartoyear.

Table 3.4French defence and security forces allocation, 2009

9 mm 5.56 mm 7.62 mm Mortar shells 50–120 mm

rockets <120mm

Medium calibre for heavy ma-chine guns, anti-materiel, and anti-personnel

Annual gendarmerie purchase

10 million

800,000 220,000 N/A N/A N/A

Annual police pur-chase

26.54 million

660,000 ? N/A N/A N/A

Annual Ministry of Defence purchase

6 million 50 million

6 million 20,000 3,000 25,000 (medium cal.)

Total amount purchased annually

42.54 million

51.46 million

6.22 million

20,000 3,000 25,000 (medium cal.)


Commercial exports and transfers of ammunition

Armssalesaregenerallyagoodindicatorofanycountry’sgeopoliticalandoil

interests.InAfrica,forinstance,Chadrecentlyjoinedthelistofcountriesbuying

Frenchweapons,joiningahostofotheroil-producingcountriessuchasAngola

andNigeria(France.MinistèredelaDéfense,2007b;2008).Itisreasonableto

believethatammunitiontransfersfollowthistrend.AnOctober2006GRIPre-

portestimatesthatmorethan90percent(USD26.4million)ofalldeclaredsmall

armsandlightweaponsammunitionimportstoAfricanstatesoriginatefrom

non-Africanstates,withtheUnitedStates,Spain,andFrancefiguringasthetop

threeexportersofdeclaredammunitiontoAfrica(Anders,2006).

ThecurrentFrencharmsexportprocedureisverymeticulous:severalminis-

triesexamineanorderbeforeitobtainsthegreenlight.Inordertoboostarms

exports,administrativecontrolproceduresandintermediariesareundergoing

simplification under the auspices of the Commission interministérielle pour

l’étudedesexportationsdematérieldeguerre.Thus,theFrenchadministration

hasrecentlysoughttostreamlineitsadministrativearmsexportprocedures

toavoidrepetition.Accordingtothereporttoparliamentfor2007(France.

MinistèredelaDéfense,2008,annex7),asaresultofsmootheradministrative

measuresandareductioninproductiondelaysandexportauthorizationpe-

riods, French arms deliveries to sub-SaharanAfrican countries more than

doubledduringthatyear,increasingfromEUR16.5million(USD22.6mil-

lion)toEUR39.8million(USD54.5million).Comparatively,Table4.1inthe

2006GRIPreportestimatesthatFrance’sannualsmallarmsandlightweap-

onsammunitionexportstoAfricaovertheperiod2000–04amountedtoanav-

erageofUSD4million(Anders,2006).

Duetothelackofanadequateresponsefromtheappropriatecontacts,

thisareawas,however,notproperlycoveredbythepresentstudy.Firstofall,

itisdifficulttodetermineexactlywhatkindofammunitionFranceexports,

becausetheFrenchDefenceMinistry’sannualreportstoparliament(France.

Ministèrede laDéfense, 2007b; 2008)donot specifyordisaggregatewhat

equipment falls under the various categories. Telephone interviews with

FrenchCustomsHeadquartersandDélégationauxaffairesstratégiquesdid

notyieldanyconclusivequalitativefiguresonthestateofammunitiontrans-

fersbetweenFranceanditspoliticalpartners.11Accordingtothecustomsoffi-

cial, thistypeofinformationisdetainedbytheDirectiondelaprotectionetde

lasécuritedeladéfense,themilitaryintelligenceservice,andislargelyinac-

cessibletoaforeign-based,civilianresearchproject.

Conclusion

Thischapterservesasapreliminarylookintothepatternsofprocurement

andconsumptionofsmall-andlarge-calibreammunitionbytheFrenchgen-

darmerie,police,andarmedforces. Oneofthemainchallengeswastocome

upwithcontactswithintheFrenchadministrationconcernedwithammuni-

tion procurement on behalf of their own agencies.All sources considered,

data concerning ammunition procurement and allocation proved easier to

collectthanammunitiontransfersdata.Officialopensourcesshowthatsmall

calibremanufacturingisnolongernationalizedandthattheFrenchadminis-

trationresorts to importsand tender invitations tosupply its lawenforce-

mentand armed services.The general impression is that ammunition is a

convenient,easilymodifiablevariableinabudget’sadministrationandthat

thetendencyisrathertotopupexistingammunitionlevelsintimesofemer-

gencyratherthantobuytoomuchandkeepitstoredforprolonged(andcost-

ly)periodsoftime.Inotherwords,thetrendpointstowardsnotenougham-

munitioninthearmedforcesratherthantoomuch.

Theinitialassumptionwasthateachadministrationwaseventuallylikely

to‘signoff’somehardwaretoaformercolony’sarmyorlawenforcement

serviceafteraprolongedperiodofuseinFrance.Whetherlargeamountsof

ammunitionareconcernedintheseamiablecessionsis,however,doubtful:in

thisallegedcontextofdeprivation,theextentofofficial,recordedammuni-

tiontransfersabroadperformedbythelawenforcementandarmedservices

themselvescanbequestioned.Thisshould,ofcourse,beconsideredseparately

fromauthorized,commercialsalesandexportsofmediumandlargecalibre

ammunitionmanufacturedbyFrenchcompanies,whichcouldbethefocusof

analtogetherdifferentstudy.


Endnotes

1WrittencommunictionfromPatriceBouveret,Observatoiredesarmements,Lyon,3June2009.

2AuthorinterviewwithseniorDGAofficial,May2009.

3AuthorinterviewwithseniorDGAofficial,May2009.

4AuthorinterviewwithseniorDGAofficial,May2009

5Authorinterviewwithseniorofficial,DGGN,Bureaudesmatériels,May2009.

6<http://www.boamp.fr>.

7<http://www.eda.europa.eu/ebbweb/Default.aspx>.

8AuthorinterviewwithcommandingofficerofEquipmentProcurementDivision,DGGN,

Bureaudesmatériels,Malakoff,15May2009.

9AuthorinterviewwithheadofBureaudel’armementetdesmatérielstechniques,DAPN,

12June2009.

10Authorinterviewwithinfantryweaponsandammunitionmanager,DGA,Bagneux,15May2009.

11AuthortelephoneinterviewswithseniorofficialsofBureauE2,Directiongénéraledes

douanes,andDélégationauxaffairesstratégiques,MayandJuly2009,respectively.

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Chapter 4 Russian Small Arms and Light Weapons Ammunition Production, Procurement, and ExportsMaxim Pyadushkin

Introduction

TheRussianFederationhassignificantcapacitiesforproducingsmallarms

and lightweaponsammunition,whichwere inherited fromtheSovietde-

fenceindustry.Althoughinthe1990sandearly2000sthissectorfacedserious

reductionsindomesticprocurementorders,theammunitionindustryisstill

capableofsatisfyingthedemandforsmallarmsandlightweaponsammuni-

tion from the national armed forces and paramilitary agencies. Moreover,

overthepastdecadeRussianmanufacturersincreasedtheoutputofcivilian

firearmsammunitionsoldbothonthedomesticmarketandforexport,and

thisareabecamethemajorsourceofrevenuesfortheindustry.Inthelastfew

yearsthesmallarmsandlightweaponsammunitionindustrysawtheriseof

domesticmilitarypurchasesduetotheoverallgrowthoftheRussianmilitary

procurementbudget.

Nevertheless,theanalysisofsmallarmsandlightweaponsammunition

production,procurement,andexportsintheRussianFederationisaverydif-

ficulttaskduetothelackofinformationavailablefromgovernmentbodies,

manufacturers,andmedia.Thiscanbeexplainedbothbysecurityrestrictions

andbythefactthattheammunitionindustryrepresentsaratherinsignificant

shareinthecountry’slargedefenceindustry.

Methodology and sources

Estimatingthetotalproduction,procurement,andexportofammunitionfor

smallarmsandlightweaponsintheRussianFederationisdifficultduetothe


lackofdetailedinformationonthesubject.Theinformationontheproduc-

tion,domesticprocurement,andexportofsuchammunitioniskeptclassified

undernationallegislation.The1993FederalLawonStateSecretsstatesthat

statesecretsincludeinformationregardingvolumesofdomesticdefencepro-

curementplans,volumesofproductionanddeliveries(inbothnumbersand

values)ofweaponsandotherdefenceproducts,defenceproductioncapaci-

ties,designersandmanufacturersofweaponsandothermilitaryproducts,

andtheircooperationties(RussianFederation,1993).Thelawdoes,however,

allowgovernmentofficialstodeclassifythisinformationduetotheinterna-

tionalobligationsoninformationexchangeacceptedbytheRussianFedera-

tionorifthefurtherprotectionofthisinformationbecomesunreasonable.

Buttheopportunityfordeclassificationdoesnotalwaysmeanthatinfor-

mationbecomesavailableinsidethecountry.AgoodexampleistheRussian

Federation’sparticipationintheinformationexchangeundertheOrganiza-

tion for Security and Cooperation in Europe (OSCE) Document on Small

ArmsandLightWeapons.In2001theRussiangovernmentallowedtheFor-

eignMinistryannuallytocollectandsendtotheOSCEtheinformationabout

thenumbersofexported,imported,seized,anddisposedofsmallarmsand

lightweapons,butwiththeconditionthatthisdatashouldremainclassified

insidethecountry(RussianFederation,2001).

OtherRussianreportsunderinternationalobligationslikeUnitedNations

RegisterofConventionalArms(UNROCA)reportsorUNreportsonmilitary

expendituresdonotprovidetheneededinformationonsmallarmsandlight

weaponsprocurementorexportsand thuswerenotused in this research.

Russian reports to UNROCA (including background information) do not

containanydataaboutsmallarmsandlightweaponsammunitionthatwas

thesubjectofthisresearch.Reportsonmilitaryexpenditurescontaininforma-

tionregardingtheprocurementofammunition,buttheydonotseparatelarge

calibreammunitionfromthatforsmallarmsandlightweapons,sotheycannot

beusedtoestimatethevolumeordynamicsoftheRussiaFederation’ssmall

armsandlightweaponsammunitionprocurement.

Public controloverdefence issues ingeneral and small armsand light

weapons issues in particular is very limited in the Russian Federation. It

includessporadicreportingbytheDefenceMinistryorotherrelatedofficesto

closedsessionsoftheStateDuma.Thesereportsalsoremainunavailableout-

sideparliament,andNGOsareexcludedfromthisprocess.

Sotheavailabledataonsmallarmsandlightweaponsammunitioninthe

RussianFederationismadeupoftinypiecesofdeclassifiedinformationcol-

lectedfromvarioussources.Forthepurposesoftheresearch,thisinformation

was collected from three types of sources: government bodies and agencies,

smallarmsandlightweaponsammunitionmanufacturers,andthemedia.

Asfarasthegovernmentisconcerned,thesmallarmsandlightweapons

ammunitionindustry(aspartofthedefenceindustry)issupervisedbytheMin-

istryofIndustryandTrade.Theministrydoesnotprovidedetailedstatisticson

ammunitionproductionintheRussianFederation,includingammunitionfor

smallarmsandlightweapons.Arequestthatitprovidestatisticsforlightweap-

onsammunitionproductionfor2008receivednoresponse.

Anotherrequestforlightweaponsammunitionexportdatawasforwarded

toRosoboronexport,thecountry’sstate-ownedarmstradeagency,whichholdsa

monopolyrighttoselldomesticallyproduceddefenceproductsabroad.Rosobo-

ronexportprovidedaspeciallypreparedinformationsheetonitslightweapons

ammunitionexportthatisratherdescriptive,butcontainsnoexactfiguresofto-

talexportvolumesorvolumesofdeliveriestocertainclients.Someofthedatain

thisstudywasobtainedthroughinterviewswithRosoboronexportofficials.

Thereportsbysmallarmsandlightweaponsammunitionmanufacturers

weremoreuseful,althoughstill limited,sourcesof information.The levelof

corporateinformationdisclosureintheRussianFederationdirectlydependson

thelegalstatusofacompany.Themanufacturersthatactasopen jointstock

companiesareobligedtodisclosepubliclytheirfinancialandoperationalre-

sultsthroughquarterlyandannualreports.Butthenumberofopenjointstock

companiesinthecountry’ssmallarmsandlightweaponsammunitionindustry

isdecreasing,thusaffecting,unfortunately,thescopeofavailabledata.In2002

thesmallarmsandlightweaponsammunitionindustrynumberedfourpublic

companiesoutofnine,whilein2010therewereonlytwo:TulaCartridgeWorks

and UlyanovskAmmunition Plant. Moreover, although the reports by these

two companies are available on the Internet, Tula Cartridge Works does not


discloseitsexportrevenuesinitsreports,referringbywayofexplanationtothe

1993FederalLawonStateSecrets(TulaCartridgeWorks,2009a).

Theothersmallarmsandlightweaponsammunitionmanufacturershave

thelegalstatusofeitherclosedcorporations(BarnaulAmmunitionPlant,Nov-

osibirsk Cartridge Plant, and Klimovsk Specialized Ammunition Plant) or

state-ownedenterprises(VympelAmmunitionPlant,GNPPBazalt,FNPTsPri-

bor,andKBPInstrumentDesignBureau).Theselegalstatusesdonotrequire

thedisclosureofcorporateinformation,thusthesecompaniesdonotpublish

regularreportsontheirfinancialandoperationalactivities.Onrequest,Bazalt

providedsomeinformationonthelightweaponsammunitionitmanufactures

andexports,butagainwithnoexactfiguresonproductionorexportvolumes.

Theshortageofofficialdatafromgovernmentbodiesandtheindustrywas

partlycompensatedforbytheinformationavailablefromlocalmedia.Neverthe-

less,thisinformationwasquitelimitedandincludedirregularannouncements

ofoperationalorfinancialachievementsandexportsuccesses.Thisshowsthat

thesmallarmsandlightweaponsammunitionindustryremainsclosed,whileits

achievementsdonotattractmediaattentionbecausetheindustryplaysacom-

parativelyinsignificantroleinthecountry’soveralldefenceproduction.

Products and producers

Themanufacturingofsmallarmsandlightweaponsammunitionisapartof

theammunitionbranchof theRussianFederation’sdefence industry.This

sectorincludessixcompaniesthatproduceammunitionforsmallarms:Bar-

naulAmmunitionPlant (a subsidiaryofBarnaulMachine-ToolPlant),Kli-

movsk Specialized Ammunition Plant, Novosibirsk Cartridge Plant, Tula

Cartridge Works, Ulyanovsk Ammunition Plant; and the Amursk-based

VympelAmmunitionPlant;andthreelightweaponsammunitionmanufac-

turers:theMoscow-basedGNPPBazaltandFNPTsPribor,andtheTula-based

KBPInstrumentDesignBureau.Allofthesesmallarmsammunitionmanu-

facturersexceptVympelareprivatelyownedcompanies.Vympelandallthe

lightweaponsammunitionmanufacturersarestateowned.

Russianmanufacturersproducetheentirerangeofammunitionforthedo-

mesticallydesignedsmallarmsusedbythecountry’sarmedforcesandpara-

militaryagencies(seeTable4.1).Mostcompanies,exceptNovosibirskandKli-

movsk,produceammunitionofsuchpopularcalibresasthe5.45x39mmand

7.62x39mmroundsusedinKalashnikovassaultrifles.TheKlimovskplantis

focusedonspecialsubsonic9mmand7.62mmammunitionforsilentweapons,

whileUlyanovskandNovosibirskplantsproduceammunitionforlargecalibre

(12.7mmand14.5mm)machinegunsandanti-materielrifles.

Russianlightweaponsammunitionmanufacturersproduceammunition

for hand-held under-barrel and mounted grenade launchers, portable

launchersofanti-tankmissileandrocketsystems,andmortarsofcalibresof

lessthan100mm.

TheMoscow-basedGNPPBazaltisadesignerandexclusivemanufactur-

er of various ammunition for RPG-7 and RPG-29 grenade launchers, i.e.

shapedcharge,high-explosive,anti-tank,andthermobaricgrenaderounds.

Additionally,thecompanymanufacturers82mmmortarrounds;disposable

72.5mmRPG-26,105mmRPG-27,105mmRShG-1,and72.5mmRShG-2

anti-tank rocket launchers; 30 mm non-cartridge rounds for AGS-17 and

AGS-30automaticgrenadelaunchers;andhandgrenades.1

Table 4.1Military small arms ammunition produced by Russian manufacturers

Company Military small arms ammunition produced, by calibre

Barnaul Ammunition Plant 9 x 18 mm, 9 x 19 mm, 5.45 x 39 mm, 5.56 x 45 mm, 7.62 x 39 mm, 7.62 x 51 mm, 7.62 x 54 mm

Klimovsk Specialized Ammunition Plant

Special pistol 9 and 7.62 mm, special rifle 9 x 39mm, 5.66 mm for underwater weapons, 7.62 x 39mm

Novosibirsk Cartridge Plant 9 x 17 mm, 9 x 18 mm, 9 x 19 mm, 7.62 x 54 mm, 12.7 mm

Tula Cartridge Works 5.45 x 18 mm, 9 x 17 mm, 9 x 18 mm, 9 x 19 mm, .40 SW, .45 Auto, 5.45 x 39 mm, 7.62 x 39 mm, 7.62 x 54 mm

Ulyanovsk Ammunition Plant 5.45 x 39 mm, 7.62 x 39 mm, 12.7 mm, 14.5 mm

Vympel Ammunition Plant 9 x 19 mm, 5.45 x 39 mm, 5.56 x 45 mm, 7.62 x 39 mm

Source: Barnaul Machine-Tool Plant (n.d.); Klimovsk Specialized Ammunition Plant (n.d.); Novosibirsk Cartridge

Plant (n.d.); Tula Cartridge Works (n.d.); Ulyanovsk Ammunition Plant (2007; 2009); Vympel Ammunition Plant (n.d.)


TwootherRussianlightweaponsammunitionmanufacturers—Priborand

KBP—donothavesuchavastrangeoflightweaponsammunitionproductsas

Bazalt,asthistypeofammunitionrepresentsasmallportionoftheirbusiness

revenues. For example, the main specialization of the Moscow-based FNPTs

Priboristhedevelopmentandproductionofsmallcalibreartilleryrounds.Nev-

ertheless,thecompanyproduces40mmcaselessroundsforthearmedforces’

under-barrelgrenadelaunchersandammunitionfor30mmautomaticgrenade

launchers;and isnowmarketing,mainly forexport,anewmodelof40mm

roundsfortheBalkanautomaticgrenadelauncher(ARMS-TASS,2009).

TheTula-basedKBPInstrumentDesignBureaualsoproducesanumbera

portableandunder-barrelgrenadelaunchers,amongotherweaponry.Some

ofKBP’sgrenadelaunchersuseammunitionproducedbyBazaltandPribor,

butsomemodelssuchastheGM-94grenadelauncherarecompatiblewith43

mmroundsofKBP’sowndesign.2

Production, domestic procurement, and exports

Similar to thedefence industry ingeneral, ammunitionproduction faceda

lackofdomesticprocurementordersduring the1990sand themostof the

2000sandhadtosurvivethroughexports.In1991,attheendoftheSovietera,

theindustryproducedannuallyfivebillionsmallarmscartridges,butdueto

thesharpdecreaseinRussiandefenceexpenditureinthe1990s,by2000the

annual production volume had shrunk to 50 million rounds (INFO-TASS,

2001).By2000thelevelofdomesticcombatsmallarmsandlightweaponsam-

munitionprocurementhaddecreasedby40times,withmanufacturingfacili-

tiesworkingatonly10percentoftheircapacities(ARMS-TASS,2007).This

situationforcedammunitionplantstoproducehuntingandsportingammu-

nition,whichbecametheirmainsourceofrevenuesintheearly2000s.

Domesticprocurementoflightweaponsammunitionalsofellsharplyin

the1990sandearly2000s,forcingtheindustryalmosttosuspendproduction.

But increaseddomesticdefenceexpenditures in the secondhalfof the2000s

gavethemanufacturersnewordersfromthenationalarmedforces.

Small arms ammunition production, procurement, and exportsUnfortunately,thereisnocompletedatasetavailableonsmallarmsmanufac-

turingandexportfor2004–08.Onlyfourcompanies—Ulyanovsk,Novosibirsk,

Tula,andBarnaul—reportproductionandexportvolumesthroughcorporate

reportsormedia.Klimovskrevealedinformationonlyfor2005,whileVympel

doesnotprovideanyinformationaboutitsfinancialoroperationsresults.For

2005Novosibirskreportedthequantitiesofsmallarmsammunitionmanufac-

turedandexportedasopposedtovalues:30millioncartridgesand6million

cartridges,respectively(Voenno-promyshlenny kurier,2006).

Nevertheless,theavailableinformationshowsanincreaseinsmallarmsam-

munitionproductionintheRussianFederationfortheperiod2004–08fromUSD

42.7milliontoUSD151.6million(seeTable4.2).Growingexportsanddomestic

procurementofbothcivilianandmilitaryammunitionapparentlycausedthis

increase.Availablefigures representboth typesofammunitionoutput,as the

manufacturersusuallydonotprovideabreakdownthatdistinguishesbetween

theseproducts.Mostcompanies,however,reportthathuntingandsportingam-

munitionaccountsforthelargestpartoftheirtotalammunitionproduction.

TulaCartridgeWorksbecamethelargestmanufacturer,withitstotalout-

putincreasingfromUSD34.9millionin2004toUSD91millionin2008.Its

domestic sales, which included both military and civilian ammunition,

amountedtoUSD17.6millionin2004(TulaCartridgeWorks,2005)andabout

USD29millionin2006(ARMS-TASS,2007).

UlyanovskAmmunitionPlantdemonstratedthesharpestincreaseinpro-

duction.After theplantwasreorganized in2004andboughtbyTulaCar-

tridgeWorks,itsproductionoutputskyrocketedfromUSD3.2millionin2005

toUSD43.7millionin2008.Ulyanovskconfirmedanincrease indomestic

ammunitionsalesinthelastfewyears(USD4.8millionin2006,USD8.3mil-

lionin2007,andUSD22.1millionin2008).

AsforBarnaul,itsdomesticsalesalsogrewfromUSD5.4millionin2004

toUSD18.4in2007(seeTable4.2).Theplantreportedlyhaddomesticorders

formilitaryammunition(ARMS-TASS,2007).

Amongallthemanufacturers,onlyVympelreportedlyremainsinadiffi-

cultfinancial situationdue to the lackofbothdomesticandexportorders

(ARMS-TASS,2007).


Tabl

e 4.

2R

uss

ian

sm

all

arm

s am

mu

nit

ion

pro

du

ctio

n a

nd

exp

ort

s, 2

004–

08 (

USD

mil

lio

n u

nle

ss o

ther

wis

e

ind

icat

ed)

Man

ufac

ture

r20

0420

0520

0620

0720

08

Tota

l re

venu

esEx

port

s To

tal r

even

ues

Expo

rts

Tota

l re

venu

esEx

port

s To

tal

reve

nues

Expo

rts

Tota

l re

venu

esEx

port

s

Vym

pel A

mm

uniti

on

Plan

tN

o da

taN

o da

taN

o da

taN

o da

taN

o da

taN

o da

taN

o da

taN

o da

taN

o da

taN

o da

ta

Uly

anov

sk

Am

mun

ition

Pla

nt

No

data

No

data

3.2a

No

data

18.6

b12

.8c

34.6

d26

.3e

43.7

d21

.6e

Nov

osib

irsk

C

artr

idge

Pla

nt

No

data

No

data

No

valu

e gi

ven;

30

mill

ion

cart

ridg

esf

No

valu

e gi

ven;

6

mill

ion

cart

ridg

esg

15.6

hN

o da

ta23

.0h

No

data

16.9

iN

o da

ta

Tula

Car

trid

ge W

orks

34

.9

9.1j

52.9

kN

o da

ta59

.4k

Abo

ut 3

0.0l

81.9

mN

o da

ta91

.0m

No

data

Bar

naul

Am

mun

ition

Pl

ant

7.8n

2.4o

1.1n

0.2o

19.2

p4.

4q 27

.4q

9.0q

No

data

13.9

r

Klim

ovsk

Spe

cial

-iz

ed A

mm

uniti

on

Plan

t

No

data

No

data

16.0

s15

.4s

No

data

No

data

No

data

No

data

No

data

No

data

Tota

l ava

ilabl

e 42

.7

11.5

73

.2

15.6

11

2.8

Abo

ut 4

7.2

166.

9 35

.3

151.

6 35

.5

Not

es:

a Uly

anov

sk A

mm

uniti

on P

lant

(200

6)b T

otal

rev

enue

s fr

om a

mm

uniti

on s

ales

(Uly

anov

sk A

mm

uniti

on P

lant

, 200

7)c U

lyan

ovsk

Am

mun

ition

Pla

nt (2

007)

d Tot

al r

even

ues

from

am

mun

ition

sal

es (U

lyan

ovsk

Am

mun

ition

Pla

nt, 2

009)

e Cal

cula

ted

as a

per

cent

age

of to

tal p

rodu

ctio

n vo

lum

e th

at m

ay in

clud

e ex

port

ed p

rodu

cts

othe

r th

an a

mm

uniti

on (U

lyan

ovsk

Am

mun

ition

Pla

nt, 2

009)

f Voe

nno-

prom

yshl

enny

kur

ier

(200

6)g 2

0% o

f tot

al p

rodu

ctio

n; s

ee V

oenn

o-pr

omys

hlen

ny k

urie

r (2

006)

h Ex

pert

Sib

ir (2

008)

i Fom

ina

(200

9)j T

his

figur

e is

onl

y fo

r ex

port

s of

mili

tary

am

mun

ition

(Tul

a C

artr

idge

Wor

ks, 2

005)

k Tul

a C

artr

idge

Wor

ks (2

007)

l Mor

e th

an 5

0% o

f tot

al r

even

ues;

see

AR

MS-

TASS

(200

7)m T

ula

Car

trid

ge W

orks

(200

9)n T

otal

am

mun

ition

rev

enue

(Bar

naul

Mac

hine

-Too

l Pla

nt, 2

006)

o B

arna

ul M

achi

ne-T

ool P

lant

(200

6)p

Expe

rt S

ibir

(200

7)q

Glo

bals

ib.c

om (2

008)

r VIS

-Inf

orm

(200

9)s G

arav

sky

(200

6)

Tabl

e 4.

3R

uss

ian

lig

ht

wea

po

ns

amm

un

itio

n p

rod

uct

ion

an

d e

xpo

rts,

200

6–09

(U

SD m

illi

on

)

Man

ufac

ture

r20

0620

0820

09 (

expe

cted

)

Tota

l rev

enue

sEx

port

sTo

tal r

even

ues

Expo

rts

Tota

l rev

enue

sEx

port

s

GN

PP B

azal

t21

.6

No

data

72.6

14

.5

116.

7 52

.0–5

8.0

KB

PN

o da

taN

o da

ta49

5.3

0N

o da

taN

o da

ta

Prib

orN

o da

taN

o da

taN

o da

taN

o da

taN

o da

taN

o da

ta


agencies reportedlyhavea limitednumberof foreign-madesmallarms in

service,mainlysniperriflesandhandguns.Itisnotclearwhethertheseunits

importammunition for theseweaponsorbuy it from localmanufacturers

thatcanproduceNATO-typeammunition.Buteveninthecaseofimports,

thesedeliveriesareunlikelytobesignificant,asthenumberofforeignsmall

armsinserviceintheRussianFederationisquitelimited.

An overview of exports

TheexactvolumeofRussiansmallarmsandlightweaponsammunitionex-

portsisunavailablebecauseofficialstatisticsdonotseparatetheseproducts

into a separate category. Instead, they are calculated together with other

weapons. Rosoboronexport, the state-owned arms trade monopolist, ac-

countsforbothsmallarmsandlightweaponsammunitioninthecategory

‘other’.In2008thiscategory’sshareinRosoboronexport’stotalarmsexport

was3percent5oraboutUSD200million(Safronov,2009).6Butthiscategory

doesnotreflecttherealvolumeofthesmallarmsandlightweaponsammuni-

tionexportedasitmayincludeotherdefenceequipmentexportedthrough

Rosoboronexportthatdoesnotfallunderthemaincategories(aircraft,naval

weapons,landweapons,etc.).

Rosoboronexporthasannuallyincreasedthevolumeofsmallarmsand

lightweaponsexportdeliveriesby13–15percent(Rosoboronexport,2009).

ThegrowingdemandforRussiansmallarmsandlightweaponsisexplained

bytheirreliability,optimalvalueformoney,andexpandedproductrange,includ-

ingnewammunitionandammunitionadaptedtoNATOstandards.

RosoboronexportdoesnotspecifywhatkindofNATOstandardammuni-

tionitexports,butitprobablyincludesammunitionforNATO-calibrederiva-

tivesofKalashnikovAKrifles.FormerWarsawPactcountriesinEasternEu-

rope produce such weapons. The Russian Federation’s largest small arms

manufacturer,Izhmash,alsooffers5.56mmAK-101andAK-102assaultrifles,

basedontheAK-74design.Atleastoneammunitioncompany—BarnaulAm-

munitionPlant—sellsNATOstandard5.56x45mmand7.62x51mmammu-

nition(Globalsib.com,2008).

Light weapons ammunition production and exportsNoneofthethreelightweaponsammunitionmanufacturerspubliclyreports

itsfinancialoroperationsresultsintermsofeithervolumeorvalueofoutput.

Amongthethree,Bazaltseemstobethedominantmanufacturerduetoits

narrowlightweaponsammunitionspecialization.Ithasreportedlyincreased

itsrevenuesinthelastfewyears:fromRUB565million(USD21.6million)in

2006(Kommersant,2008)toRUB2.2billion(USD72.6million)in2008.Reve-

nuesfor2009areexpectedtoreachRUB3.5billion(USD116.7million)(Myas-

nikov,2009).ItcanbeassumedthatmostofBazalt’srevenuescomefromlight

weaponsammunition,althoughthecompanyproducessomeotherdefence

productssuchasaerialbombs,artilleryand120mmmortarrounds,andam-

munitionforanti-aircraftgunsandgrenadelaunchers.

Suchgrowthisreportedlycausedbytheincreaseinprocurementbythe

DefenceMinistryandlawenforcementagenciesaspartoftheoverallincrease

intheRussianFederation’sdefenceexpenditureinthe2000s.In2008domes-

ticordersamountedto80percentofBazalt’srevenues,RUB1.76billion(USD

58.1million).However,thevolumeofdomesticdefenceordershasbeenvery

unstableoverthelastfewyears(Korenkov,2008).

KBPandPriborarelikelytomanufacturelightweaponsammunitionin

muchsmallervolumes.KBP’stotalrevenuesin2008amountedtoRUB15bil-

lion(USD495.3million),3butthemajorportionisgeneratedbysalesoflarger

weapons,suchasairdefencesystemsandanti-tankguidedmissiles.Inthe

lightweaponsammunitionclassKPBreportedlyproducesonlythe43mm

roundtosupportseveralhundredGM-94grenadelauncherspurchasedan-

nuallyfortheRussianFederation’ssecurityandlawenforcementagencies.4

OfficialdataonPribor’sproductionvolumes,domesticprocurement,and

exportsisunavailable.

TheRussianFederationdoesnotimportammunitionforlightweapons

as:(1)ithasnoforeign-madelightweaponsinserviceinitsarmedforcesand

paramilitaryagencies; and (2) the localdefence industry is still capableof

producingalltypesofammunitionforthelightweaponsusedbythecoun-

try’smilitaryandlawenforcementagencies.Asforsmallarmsammunition,

somespecialtaskunitsoftheMinistryoftheInteriorandotherparamilitary


However,demandforRussiansmallarmsandlightweaponsammuni-

tionisnotcomprehensive,e.g.mortarshellshavenotbeenexportedforsev-

eralyears.7

Interestingly,accordingtoRosoboronexport,intheglobalarmsmarket

theRussianFederationisthesecondlargestexporterofsmallarmsandlight

weaponsammunition, followedby theUnitedStates in thirdplace.This

countersthecurrentassessmentofreportedtransfersintheglobalmarket,

whichhastheUnitedStatesastheleader.RosoboronexportreportsthatChi-

naistheactualgloballeader,exportingammunitiondesignedfromRussian

technologies. Other Chinese advantages that Rosoboronexport’s analysts

nameincludedumping,vastoffsetprogrammes,andarmsimportloans.At

thesametime,Rosoboronexportpointsoutthatsomeothercountriesuse

RussianFederationtechnologiestransferredintheSovieteraforunauthor-

ized manufacturing and export of light weapons ammunition, mainly

rounds for automatic, under-barrel, and anti-tank grenade launchers

(Rosoboronexport,2009).

Theavailabledatafrommanufacturersshowsthatin2004totalexportsof

smallarmsammunition(bothmilitaryandcivilian)amountedtoUSD11.5

million;USD15.6millionin2005;aboutUSD47.2millionin2006;andabout

USD35millioninboth2007and2008.

Someexportstatisticsareavailablefromthemanufacturersthatsellam-

munitiontoforeigncustomersthroughRosoboronexport.ButRussianmanu-

facturersofsmallarmsammunitionusuallyreporttheirtotalexports,which

includebothmilitaryandcivilianammunition.Forexample,thetotalexports

ofTulaCartridgeWorksin2004totalledUSD17.3million,buttheshareof

militaryammunitionintotalexportswasabout50percent(USD9.1million)

(TulaCartridgeWorks,2005).

In2008Bazaltexportdeliveriesamountedtoonly20percentofitsreve-

nues (RIA Novosti, 2008)and totalledUSD14.5million. In2009 theexport

shareof totalproduction increased to45–50per centandwasexpected to

reachthelevelofUSD52–58million.KBPdidnotexportlightweaponsam-

munition, but instead focused on deliveries to domestic customers, while

dataonPribor’sexportsisunavailable.

AccordingtoRosoboronexport,theMiddleEastistheleadingregionim-

portingRussianlightweaponsammunition,followedbytheCaribbean,East

Asia,andAfrica.Somedemandforlightweaponsammunitionremainsfrom

theformerWarsawPactstateswhostilluseSoviet-madelightweapons.In

addition,WesternEuropeancountriesandtheUnitedStatespurchasesmall

batchesofRussianlightweaponsammunitioninordertostudyitscombat

performance(Rosoboronexport,2009).

ThisexportgeographyisconfirmedbyBazalt’sexperience.Accordingto

the company, it has supplied grenade launchers and their ammunition to

Algeria, Bangladesh, Bulgaria, China, Finland, Jordan, India, Iran, Libya,

Malaysia,Mexico,NorthKorea,Syria,Sudan,Turkey,Turkmenistan,Vene-

zuela, the UnitedArab Emirates, Uruguay, Uzbekistan, andYemen.8 Since

2005Bazalthasbeendeveloping theRPG-32Hashimdual-calibregrenade

launcher, which is to be assembled under licence in Jordan. The assembly

facilitywasexpectedtobelaunchedattheendof2009.

TheRussianFederation’ssmallarmsammunitionmanufacturersdonot

reportwheretheysellmilitarysmallarmsandlightweaponsammunition,as

allexportsgothroughRosoboronexport.Perhapsthelargestknownexport

deal in recent times involving the country’s military small arms and light

weaponsammunitionwaswithVenezuela,whichpurchased100,000AK-103

assaultriflesandreceivedalicencetoproduceitsammunitionlocally(Nikol-

skyandKudashkina,2006).Thepurchaseoftheseweaponswassupplemented

byacontractforthedeliveryof72million7.62x39mmcartridgesvaluedat

USD 58 million reportedly concluded in 2006. The ammunition was to be

manufactured by Barnaul Ammunition Plant (Agentstvo Natzionalnikh

Novostey,2006).Accordingtootherreports,severalmillioncartridgeswere

also purchased from Klimovsk Specialized Ammunition Plant (Litovkin,

2006).TheRussianFederationalsoagreedtobuildafacilityinVenezuelaforthe

licensed production of 7.62 mm ammunition for Kalashnikov AK-103 rifles

(Kolesnikov,2006).Asforexportsofcivilianammunition,themajormarketsare

theUnitedStates,Europe,andtheMiddleEast(ARMS-TASS,2007).


Conclusion

ThelackofcompleteanddetailedstatisticsonRussiansmallarmsandlight

weaponsammunitionproductionandsalesmakesitdifficulttoproduceac-

curateestimations.Notallofthemanufacturersreporttheirfinancialandop-

erationalresults,butthosethatdo,dososporadically.Besides,asmentioned

above,theavailabledatafromsmallarmsammunitionmanufacturersdoes

notdisaggregatemilitaryandcivilianammunition,whichmakesanyestima-

tionevenlessaccurate.Nevertheless,thetotalavailabledatacanbeusedas

anestimationforminimallypossiblelevelsofsmallarmsammunitionpro-

duction,export,anddomesticprocurement.

Asforlightweaponsammunitionproduction,Bazalt’sdatacanbetaken

asabasisfortheestimationsoflightweaponsammunitionproduction,do-

mesticprocurement,andexports,asthiscompanyseemstobethelargestand

mostspecializedmanufacturerinthefield.Itisclearthatlightweaponsam-

munitionconstitutesa tinyportionofKBPrevenues,while itsoutputsare

muchsmallerintermsofvolumeandvaluethanBazalt’s.Thelackofinfor-

mationfromPriborprobablyindicatesthatitsoutputsareverymodest.

Sowecanassumethatannuallightweaponsammunitionproductionvol-

umesaremoreorlessequaltoBazalt’sannualoutput,i.e.betweenUSD20

millionandUSD117millionin2006–09.Asforlightweaponsammunition

procurementfortheRussianarmedforcesandsecurityandlawenforcement

agencies,itcanbeassumedthatitalsoroughlyequalsBazalt’sdomesticor-

ders,whichamountedtoUSD58.1millionin2008.

Byaddinguptheavailableexportvaluesfor2008,i.e.smallarmsammu-

nition(USD35million)andlightweaponsammunition(Bazalt’sUSD14.5

million),wegetUSD49.5million.Thistotalfitswellwithintherangeofthe

USD200millionvalueofRosoboronexport’s‘other’categoryfordefenceex-

ports.ThisfigureofUSD49.5millionreflectstheminimallypossiblelevelof

theRussianFederation’ssmallarmsandlightweaponsammunitionexports,

asitdoesnotincludetheproductionofthosemanufacturersthatdidnotre-

portexportsin2008.WhilethefigureofUSD200millionisnotveryprecise,

andmayincludedefenceproductsotherthanammunition,itisnevertheless

thebestoneavailableandcanbetakenasthemaximumpossiblelevelofthe

country’ssmallarmsandlightweaponsammunitionexportsin2008.

Endnotes

1 AuthoremailinterviewwithGNPPBazaltrepresentative,Moscow,October2009.

2 AuthorinterviewwithKBPrepresentatives,Moscow,27October2009.

3 EstimationsbyCentreforAnalysisofStrategiesandTechnologiesrepresentativeinauthor

interview,Moscow,October2009.

4 AuthorinterviewwithKBPrepresentatives,Moscow,27October2009.

5 AuthorinterviewwithRosoboronexportrepresentative,October2009.

6 Rosoboronexport’sarmsexportstotalledUSD6.75billionin2008;seeSafronov(2009).

7 AuthorinterviewwithRosoboronexportrepresentative,October2009.

8 AuthoremailinterviewwithGNPPBazaltrepresentative,Moscow,October2009.

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