WONDERING WHY NO NEW 22 MANUFACTURERS HAVE SURFACED

[chief38]

I find it a bit puzzling that in this time of .22 rimfire ammo hoarding, scarcity and ridiculous pricing that no one has opened up a NEW manufacturing facility just for .22's. I would have though that Companies like Hornaday & Buffalo Bore (already have the required licenses, insurance and permits) would have jumped into this after it was quite obvious that this situation wasn't going away in a few weeks. No new Companies have started manufacturing .22's either (as far as I am aware of) and AFAIK the current manufacturers have not added facilities, extra buildings or machinery.

Anybody got info or insight as to why?

 

[Mack]

Because it doesn't make business sense? Likely they make more profit on centerfire so why divert resources to a lower profit item. Any new company would have a major captial investemt, have to compete with existing companies for raw material and powder all for demand that may not exist by the time they get online. Plus you can bet that if anyone tried one or more of the existing mfg would find time to produce a ton of .22s to stop the new guy from stealing market share. You will see .22s come back after demand eases on the popular centerfires which is starting to happen.

 

[chief38]

A Company could make so much money so fast in the .22 business! Especially a Company like I mentioned above that already has facilities, licenses, permits, name recognition, and the money to fund expansion and increase production. How much the machinery actually costs - who knows?

ANY NEW COMPANY has to invest money to make money - that's how it works. The ammo business is no different and I'm really surprised that someone as not already done so.

 

[mmncw]

Without having any inside knowledge, can only guess that if they truly could make so much money so fast they would do it. Since they're not doing it, it's probably because they looked at the projected ROI along with the fact that they'd end up with unused equipment and personnel to lay-off once they got caught up and decided that it would not be worth it.

 

[arjay]

I doubt that they see this level of demand being sustainable.If all the 22 being sold was also being shot up they would gear up and produce more.

 

[RGPM1A]

I can think of a few reasons:

The required machines are expensive and have a long lead time to build. As someone else said a new mfg would run the risk of coming online just when demand subsides.

The expertise and equipment to handle the primer chemicals/explosives used in 22LR ammo are not common nor trivial and are hard to design, staff, permit and operate. Then there are the EPA regulations......

 

[ImprovedModel56Fan]

Without having any inside knowledge, can only guess that if they truly could make so much money so fast they would do it. Since they're not doing it, it's probably because they looked at the projected ROI along with the fact that they'd end up with unused equipment and personnel to lay-off once they got caught up and decided that it would not be worth it.

This is almost surely the correct answer. But if chief38 or anyone else is on to something, maybe they could raise the money to get a new business going. If it actually works, it would be good for everyone. But the fact that the smart money, or, in fact, ALL of the money, is passing up this opportunity, seems to me to hint that there ISN'T any money in it.

 

[shakyshoot]

I'm sure this has been well thought out by people who know the business well. If an outfit like ATK, which is a $3.85 billion company, hasn't seen fit to build more .22 lines, how much harder would it be for a start-up? Projections would certainly have to rely on years and years of the same or increasing sales levels. It SOUNDS like a great idea, but I don't have the numbers that "they" do.

 

[Smitty357]

No point in it because everyone knows the scarcity is only temporary. Just like those Magpul Pmags that were $80 a piece within the last year.

It happens every time one threatens the 2nd amendment and it'll repeat itself over and over again. Just wait until 2016-2017 u'll see it all start all over again when another threatens the 2nd amendment........Stock up while u can and buy why its on the cheaper side. Next time the price will just be double what they are now.

 

[darmtn1917]

Wonder if Chinese ammo was still imported if they would have jumped on the "shortage". Can't remember seeing any 22 when we were importing tons of their ammo in 70s-80s. Same goes for some of the other imports - Mexico, Russia,etc.

 

[ralph7]

darmtn1917;137643156]Wonder if Chinese ammo was still imported if they would have jumped on the "shortage".

Nah, nobody would want to buy .22 rong lifle.

 

[jimmib]

kind of makes you wonder if there isn't a big warehouse somewhere full of 22lr just slowly being handed out to keep the prices up????

 

[RonS]

Would you stake the financial future of your family on a business when you knew that the political party in power wants to ban your product and has come close again and again to doing so? You could go from boom to bust with a single vote and the stroke of a pen. I might stay in business and keep producing, but to build a building, install equipment, hire and train people? No. Plus, I wonder how many regulations there are that you have to satisfy?

If we could get the government in check and cut them back to living within the powers granted to them by the constitution a lot of things that are impossible now would become simple.

 

[WPWarhawk]

How many new AR-15 manufacturers popped up in the last couple of years only to go broke now that the boom has turned to bust in the AR-15 market?

 

[Mcwsky09]

Dunno

How many new AR-15 manufacturers popped up in the last couple of years only to go broke now that the boom has turned to bust in the AR-15 market?

I don't know, how many?

Regarding new 22 production after you get past all the regulations and NIMBY, would you then have a wholesale price of $80 a brick? and when do you lower that price? There are plenty of folks who have already decided not to ever make a purchase for certain long established source over price gouging. Although I suppose if there are enough folks who don't mind paying inated prices you could get by.

 

[Boge]

Would you stake the financial future of your family on a business when you knew that the political party in power wants to ban your product and has come close again and again to doing so? You could go from boom to bust with a single vote and the stroke of a pen. I might stay in business and keep producing, but to build a building, install equipment, hire and train people? No. Plus, I wonder how many regulations there are that you have to satisfy?

If we could get the government in check and cut them back to living within the powers granted to them by the constitution a lot of things that are impossible now would become simple.

Winner, winner chicken dinner. Spot on.

 

[slickracer]

Another reason is our Government makes it damn near impossible to start any new manufacturing.

 

[fyimo]

There is plenty of capacity out there for 22LR ammo and it's just not getting to the consumers. Your guess is as good as mine but this has gone to long for just plain hording unless people have pallets of 22R in their basement.

 

[Smitty357]

There is plenty of capacity out there for 22LR ammo and it's just not getting to the consumers. Your guess is as good as mine but this has gone to long for just plain hording unless people have pallets of 22R in their basement.

Pallets is an understatement when it comes to some of my neighbors. Those guys have been buying up .22lr since the Clinton days and they've been warning all of us these days were coming.

Thankfully no one around here is in dire need of .22lr. Maybe thats why it tends to stay on the shelves.

 

[BC38]

Would you stake the financial future of your family on a business when you knew that the political party in power wants to ban your product and has come close again and again to doing so? You could go from boom to bust with a single vote and the stroke of a pen. I might stay in business and keep producing, but to build a building, install equipment, hire and train people? No. Plus, I wonder how many regulations there are that you have to satisfy?

If we could get the government in check and cut them back to living within the powers granted to them by the constitution a lot of things that are impossible now would become simple.

X2

Add to that tens of millions in investment, fighting the government at multiple levels to build the factory, opposition by ignorant NIMBYs who are afraid of having an ammo mfg. facility anywhere within 50 miles of their homes, etc, etc, etc.

And for what? To address a temporary semi-artificial "shortage" that will end sooner rather than later. It just doesn't pencil out....