Manufacturing 556

[elephant]

This might be a stupid question but talking to a few case machine manufactures I found http://www.setpointusa.com/ammunition-equipment/ammunition-lean-case-cell.html who manufactures automated cells for manufacturing brass cartridges from pre-drawn cups, which they say is cheaper than manufacturing from raw brass coil. They manufacture a complete automated manufacturing cell from 1st, 2nd and 3rd draw, washing, annealing, case trimming, necking and rimming. There manufacturing cell is capable of manufacturing 22 rounds per minute of 308 or 28 rounds per minute of 556 which is what I am interested in. If I manufacture just 556, I could produce 556 at 28/minute or 1,680/hour or 13,440/day(8hours) or roughly 94,080/week which come out to 376,320/month if nothing goes wrong. There equipment is manufactured to be manned by 1 person working at 8 stations in a 'U" shape configuration. This equipment allows the operator to change out the dies within a couple of minutes so a manufacture can make different caliber cases. I am only interested in making 556. However there equipment is not ISO or SAE rated and therefore it would be hard to be standardized which is what most people want when they buy bulk ammo. The equipment runs roughly $1,600,000 and takes up only 700 sq./ft. of real estate and runs on 480v.

I have also looked into http://www.waterburyfarrel.com/company/video-gallery#BulletAssemblyMachine which makes automated equipment that manufactures lead cores from lead coil and copper jackets from sheet, prime, seat and crimp in a single press and manufacture 240 rounds per minute at max speed. The price of this equipment is roughly $1,300,000.

I have not found a singe piece of equipment or machine that will manufacture a complete round from start to finish. SO this would be the best-est approach to manufacturing full scale ammo

hypothetically, how many rounds of bulk ammo would you to sell to pay for the equipment that cost $2,900,000 and throw in a daily cost of $2,100 which is how much it would cost per day(12 hours) to manufacture 13,758 complete 556 62gr FMJ? Considering that most bulk ammo cost roughly 40-50 cents each and usually they are in packaging that has cost. Would manufacturing 319,160 rounds a month justify a $3 million dollar operation? If I could sell 100% of my product each month for 30 cents each that would equate to $95,748, I would want to sell at .22 cents/round at $70,215 a month. Would people buy 1000/rds from a nobody for $220?

[Leaveammoforme]

I think a person would be better off starting smaller. Unless they've got money to burn.

I've seen first hand the problems small ammo shops have getting components during scarce times.

Invest a $100,000 in some Camdex toys and see if a bigger investment is worth while.

(ETA- not to be misconstrued that I have ever manufactured ammo commercially, but I knew a guy that did)

[elephant]

most ammo shops don't make the cases or bullets themselves from what I have read, they buy huge bulk orders of cases manufactured by suppliers for them and primers, powder and bullets and assemble them in house. I thought if I was to manufacture from sheet and coil, there wouldn't be scarce times, but then again I could be wrong. Not to get political but trump was talking about special interest rates for American business that need money to buy equipment to manufacture goods in the US. I will have to do this on the side as the company I work for wants to invest in equipment for manufacturing sub sea equipment. Getting a $3 million dollar loan might be hard for me right now considering the oil industry is taking a hit and banks might not want to fund any projects to a guy like me who makes his money in the drilling equipment industry. I would have to start with just the brass case machine and then later on, invest in the automated process bullet manufacturing press. If there was a machine that could make say 40k rounds a day vs 13k it would be a great investment but only 13k a day $ .22 would come out to $2860 a day with $2100 in hard cost which would profit $760/day whereas $.30 would come out to $3900 a day and would profit $1800. There is only a few cents difference between .22 and .30 but its a huge different when multiplied by tens of thousands. I'm really considering this, I didn't just start thinking about this today but for several months and have reached out to several suppliers and manufactures for advice. They all told me it cost millions to get started but from what I have heard is there is too much competition. The problem I see is that all the players are charging around the same price for 55 gr to 62 gr FMJ. I could cut cost by only manufacturing 556 62 gr FMJ and wouldn't need 200 employees and a multi million dollar facility. I would only offer bulk ammo for around .22 cents/round for 5000+ and .32 cents for 2000-4999, no orders under 2000. Who is doing that? No stripper clips, no fancy packaging, no fancy labels, no trays to hold individual rounds, just 2000+ rounds shoved into the cheapest container. No wholesalers, no distributors, customers would buy direct from me cutting out every middle man.

[Leaveammoforme]

Don't get me wrong, your idea sounds interesting and I'm sure there is a market at that volume and price.

They guy I knew had no problem getting brass. Granted, it was once fired and not new but he could make ammo with it. Literally had several 55 gallon barrels full of it. His problem was sourcing everything else in a consistent manner.

Your idea would knock the projectile variable out of the Px3= Loaded Ammo formula but that would still leave Powder and Primers.

Doesn't matter if a machine puts out 12k a day or only 2k They both put out 0 without all the required components.

ETA- Just for perspective your 13,440 rounds per 8 hours would consume roughly 40-41 48 pounds of powder every single day. If you can source that and 13.5k primers 5 days a week I say go for it.

[Kdubya]

At .30 a round, I would pass. Now, that is based upon the current pricing of decent 5.56 from reputable manufacturers. For range/plinking ammo, I generally have an easy time finding PMC X-Tac 62 grainers for about .33 a round. That particular round is my go to. It's reliable, pretty accurate in my ARs for a "mil-surplus" type round, and would be serviceable if it were needed for more serious usage. Recently, I came across Perfecta brand 55 gr at Walmart for closer to .30 a box. It's brass cased, has been reliable, and groups well enough for range usage. It is .223, and doesn't shoot as well as my preferred ammo, but is a great value. I don't know how long it'll be around, and I've never seen it anywhere else, so I've been stocking up.

Now, at 22 cents I might give it a shot. Saving 10 cents per round would make a huge difference; with the average consumer keeping at least $100 in their pocket for each case. At the $220 per case, that's basically the equivalent of Buy Two get On Free vs the name brand stuff. I might wait for some reviews first, or start with a very small order, but would certainly keep coming back if it turned out to be reliable and safe.

If your math is correct, in terms of output and the cost of supplies, I think it would take about 4.5 years at 30 cents a round to break even, and roughly 10.5 years at 22 cents per round. This is assuming you run with no days off, consistently sell everything you make right from the start, and don't run into unforeseen issues throughout the process.

When you say $2100 per day for operating cost, what does that include? Supplies, energy usage, maintenance of the machines? Are you going as far as even factoring insurance, rent, marketing, & shipping?

If might be feasible. The bulk incentive is a good idea, but I'd imagine individuals willing to shell out over a grand for 5000 rounds are scarce. If you sold strictly in increments of 5000, you'd need about 900 customers a year (2-3 per day) to offload the 4.5 Million-ish rounds you'd put out each year; around 4500 customers over that same year (12-13 per day) if you sold only increments of 1000 rounds. When breaking down those numbers, the per day totals seem reasonable. One idea I thought of is maybe consider some type of subscription based service. Monthly, maybe quarterly? This would allow you to still do some type of discount based on the quantity an individual subscribes to. It also would add some certainty to your sales, and make your reliance on one-time customers a little less critical.

It sounds interesting, and you seem to be doing your due diligence. Best of luck in your evaluation!

[rjacobs]

Dont do it.

Or if you do, JUST be a brass and projectile manufacturer. DONT try to load ammo.

Powder will be your weak point. I wont say exactly what Hodgdon quoted me on lead time for 1000lbs of pistol powder because it was over a year ago, but it was in the years time frame, like 2-3 years.

I have done the math and had meetings with a few money men on starting up a commercial reloading business and startup was minimum of $1 million in machines, components, insurance and licensing just to break even. Then the lead time of getting the components went into the 2-3 year time span and the process just went dead at that point. We didnt even get into talking about sales outlets, distribution, etc... when we learned lead times on components(mostly powder).

[MegademiC]

Don't forget to account for qc and maintenance, and don't assume 100% yield.

[1_click_off]

Wonder what the profitability would be for match grade ammo? You can slow your roll on required mass quantities of components and increase the price per unit. Now packaging like you are talking about would be an issue.

If you crank out brass faster than you can load, bag it and sell just the brass.

You may be able to hire a few folks to pull handles on Dillon presses to get the QC and then you have only purchased one million dollar machine.

You could offer custom ammo. Limit the projectiles offered to what you can stock or stock most of the time. Get diversified here so if one is not available, it doesn't shut you down.

Really want to get creative, let the customer select the charge too.

Nobody I know offers these services.

You may get a niche market. Might be more in the realm of .308 customers, but still a thought.

This does well, pick up your second million dollar automated loading machine for the steady stream 5.56 recipe.

[elephant]

Let me run this past you: Currently the company that I work for is rated ISO 3019, ISO 5198, ISO 9001, approved by US Coast Guard, Dept. of Navy, Det Norske Veritas and a supplier of bomb loading equipment, missile erection equipment and catapults for 4 US Aircraft Carriers as well as well as certified to work on sub sea equipment. I have a very small, (2300) sq./ft. metal building on property that is air conditioned and if I start a small operation on our property, then technically, the ISO ratings go with though none have anything to do with ammunition, the overhead would be absorbed into the overhead of our daily business which we probably wouldn't notice a difference. I don't know how hard it is to sell ammo to the US but I'm sure its competitive. I just made some dive plane/bow leveling hydraulic cylinders for an Ohio class sub and since I'm the only company in the world that can do that, I could charge whatever I wanted- and I did. But I think the US gets most of its small arms ammo from ATK, Olin and L-3 Communications- and I cant compete with those companies. I think they could buy my company with money they have in there petty cash drawer.

$2100 would cover the cost of lead, copper, primer, brass and propellant to manufacture 13,758 rounds of 556 62 gr FMJ. The propellant doesn't have to be 2230, it just has to achieve the same ballistics as NATO 556 62 gr FMJ. Most propellant is proprietary and is manufactured by ATK, Sierra (owned by US ARMY) and McAllister Army Ammunition Depot which makes WC 844. If I could manufacture 300k rounds a month, my cost would be .06 cents per round and that's if everything worked properly without fail. Since I already have ISO designations, I would want the ammunition I make to be rated by a ISA/ISO designator so I could issue a NSN number- that cost a about $25k every 2 years but would give me the credibility I needed to sell to general public as well as be a supplier to US thought they would probably never buy from me, but it would make buyers feel safe about buying bulk ammo from me because they know that I make ammo to the requirements set forth by the US per the drawing #- that's the only way to issue a NSN number and you have to prove that with the ISA/ISO designation.

Most ammunition manufactures make every type of ammo so if they wanted to be ISA/ISO designated company, they would have to prove every piece of equipment and product and process met the standards, you cant just have one product rated, its all or nothing. Since I would ONLY manufacture 556, it would be easier to prove that I could meet or exceed the quality control requirements as well as the manufacturing process requirements so the .308 is out of the question. Ill just stick to 556 62 gr FMJ,- 1 product, 1 manufacturing process and 1 assembly process. I would hope when people buy ammo, they would want to buy from a manufacture that was designated as a National Supply Manufacturer rather than some manufacture with a brand name- which there is nothing wrong with, but it might help me sell ammo considering that I'm offering 1000 round minimum for .17-.22 cents and .30 cents for smaller orders. I think the DOD pays around .03 cents for bulk and .07 for rounds on stripper clips- I saw that on a form 1348 like 20,000 rounds of M193 for $612- I don't know how those manufactures stay in business unless they are made in China.

I'm already cutting out 2 steps, 1. polish, 2. solvent bath and 3. tumble dry which keeps cost down, though the case looks tarnished and old but still works. If I do what rjacobs suggested and just make cases, then the cost would go from $2100/day to around $214/day and I could sell 10,000 new brass for $300 and make decent money. That's cheaper than once fired brass which I figured the average cost for 10,000 rounds of once fired cast roughly 500-600. But if ammunition becomes scarce or regulated, having brass will do you no good.

[rjacobs]

I appreciate your enthusiasm, but I can think of way better ways to spend 3-4 million dollars, lets say retirement i.e. if somebody gave me 4 million dollars today to do with as I please I would retire, invest wisely, and never work again in my life time and I am 34.

brass and projectiles... or JUST projectiles is what I would get into if I was looking to manufacture the component structure.

Not sure on brass production and insurance requirements, but I would bet insurance on just being a projectile manufacturer would be low.

I wouldnt even mess with jacketed bullets, I would do plated like XTreme or Berry's.

Like I said you need to check on the component availability for the volume you are talking about. Unless things have changed drastically(they havent IMO) than powder and primers is going to be your road block. Lets use your 13,000 rounds per day, thats about 45 lbs of powder give or take per day, or ~12k lbs of powder per year operating 5 days a week, 52 weeks in the year. If you called up Hodgdon today and ordered 12k lbs of H335 or BLC2(closest to .mil ball powder) they would tell you they would have it to you in 2-3 years.

On the same token if you plan to manufacture projectiles and cases, can the raw material you are looking for keep up with your production schedule. Do you have a place to store thousands of pounds of lead or brass cups? The money(1 million) I was talking about to get a reloading company up and going included enough money to buy components in order to break even on the components and the machines. How much raw material do you need to turn into cases or bullets in order to break even on a 1.6 and 1.1 million dollar machine respectively(I think those were the machine prices you threw out)? Not to mention at least 1 if not 2 70k+ dollar camdex or ammo load machines for physically loading the ammo.

Your 2300 sq. ft. shop will get aweful small in a hurry, ask me how I know. I would be wanting like 20000 sq. ft. of space to do what you are talking about doing plus probably an acre of outside storage. You need a powder storage locker separate from everything else with fire protection. You may also need a separate storage building for primers, again separate from everything else with fire protection.

Does your boss/owner of your company know you want to do this on their property and piggy back off of their hard earned ISO certificates?