Alliant Techsystems Selected to Produce Small-Caliber Ammunition and Operate Lake City Army Ammunition Plant
Production Contract Expected to Generate $1 Billion in Sales Over Next 10 Years
Aug 2, 1999
Alliant Techsystems (NYSE: ATK) said it has been awarded a firm fixed-price contract from the U.S. Army Industrial Operations Command (IOC), Rock Island, Ill., to supply the Army's requirements for small-caliber ammunition over the next 10 years. The contract is expected to generate total sales of approximately $1 billion, with annual revenues averaging approximately $100 million during the period.
ATK also will operate the Lake City Army Ammunition Plant in Independence, Mo., the Army's only small-caliber ammunition production facility. ATK will assume operation of the plant in January 2000.
The plant will be managed by ATK's Conventional Munitions operating segment, which operates five other government-owned, contractor-operated (GOCO) facilities: Twin Cities Army Ammunition Plant, New Brighton, Minn.; Radford Army Ammunition Plant, Radford, Va.; Sunflower Army Ammunition Plant, DeSoto, Kan.; Joliet Army Ammunition Plant, Wilmington, Ill.; and Allegany Ballistics Laboratory, Rocket Center, W. Va.
Nick Vlahakis, group vice president, Conventional Munitions, said ATK brings more than 50 years of experience in GOCO management and ammunition development and production to the Lake City contract.
"Our objective at Lake City is to deliver high-quality, repeatable, and affordable small-arms ammunition to U.S. fighting forces," said Vlahakis. "To this end, we will be applying the same rigorous process control standards to small-caliber manufacturing operations that govern our production of medium-caliber ammunition and 120mm tank ammunition. We also intend to invest in modernization of key production operations and reduce operating expenses by seeking ways to lower material and manufacturing costs. In addition, we will aggressively look for opportunities to develop private-sector growth to further enhance the vitality and stability of the Lake City plant."
Vlahakis said the addition of small caliber ammunition to ATK's product portfolio makes the company a total ammunition supplier to the U.S. Army and strengthens its position as the nation's largest manufacturer of military ammunition. ATK has delivered more than 120 million rounds of medium-caliber ammunition and over two million rounds of tank ammunition to the U.S. and its allies. The company also has proven its ability to surge production to meet wartime demands, as it did during the Persian Gulf War.
ATK will produce approximately 350 million rounds of small-caliber ammunition annually at Lake City, consisting of 5.56mm, 7.62mm, .30-caliber, and .50-caliber cartridges. Federal Cartridge Company of Anoka, Minn. will provide technical and production assistance in support of the contract.
"We are extremely pleased to have Federal Cartridge on our team," said Vlahakis. "The company is a world leader in the development and production of commercial small-caliber ammunition, and is at the forefront of ammunition manufacturing technology and processes."
ATK's Conventional Munitions operating segment designs and produces ammunition, munitions propellants, tactical missile propulsion systems, warheads, and metal parts, composite structures for aircraft and weapons systems, infrared countermeasure flares, and commercial gunpowder. Operations are conducted by three companies: Alliant Ammunition and Powder Company, Alliant Missile Products Company, and Alliant Kilgore Flares Company.
Conventional Munitions reported fiscal year 1999 sales of $481 million. It employs approximately 2,800 people at facilities in Illinois, Kansas, Minnesota, New Jersey, New Mexico, Tennessee, Virginia, and West Virginia.
Alliant Techsystems is a $1.1 billion aerospace and defense company with approximately 6,000 employees. Headquartered in Hopkins, Minn., the company's operating segments are Conventional Munitions, Aerospace, and Defense Systems. ATK news and information can be found on the Internet at http://www.atk.com/
SOURCE: Alliant Techsystems
Contact: Media, Rod Bitz, 612-931-5413, rod_bitz@atk.com or Investors,
Richard N. Jowett, 612-931-6080, richard_jowett@atk.com, both of Alliant Techsystems
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