Construction is expected to be completed at the U.S. Military’s new 6.8 mm cartridge-manufacturing facility at the Lake City Army Ammunition Plant in 2027. Winchester Ammunition developed the design, is overseeing all aspects as it is built and will manage production at the site.
Kenneth Lane, president, CEO and director of Olin—owner of Winchester ammunition—updated participants on progress during an Oct. 28 investor’s conference call. “Our Next Generation Squad Weapon ammunition facility project at Lake City is well underway, and we are on course to complete construction in late 2027,” he said. “In parallel, we are developing and delivering components and equipment to support the Army's accelerated fielding plan.”
Lane noted that commercial sales are down between five and 10 percent this year. Cost of production, meanwhile, has increased. “I do think that it's going to be a while before we see commercial demand come back,” he said. “I think we're just continuing to see that consumers and consumer spending is still challenged around discretionary items such as ammunition.”
“Given the recent run-up in metals and manufacturing costs, commercial margins will not be restored until demand recovers and inventory levels have been rightsized,” he explained. “In contrast to weak commercial demand, Winchester's military business continues to show strength. Domestic military and international military demand continues to grow as NATO countries expand their defense budgets.”
The slowdown in civilian-sector purchasing has not slowed the company’s plans for the 185,000-square-foot cartridge-case production facility in Wisconsin it acquired earlier this year. “…[W]hen we look at the business case around that acquisition and what we have talked about before, the synergies with the capability to build shell cases at that facility has proven to be as good, if not even a little bit better than what we thought,” Lane explained. “So, the synergies that we talked about, yes, very confident in delivering them, not just for this year, but that $40 million level in 3 years’ time, we feel very positive about that. The asset is in great shape. The employees have really been great coming into Winchester. I think they’re excited to be part of the Winchester brand and that has been a very positive acquisition for us. So we feel really good about it.”
