Firearms factory expansion is the theme for 2017, or so it would seem with yet another major manufacturer in the not so distant past announcing a sizable expansion project. In the fall of 2016 among the mergers and acquisitions by the company formerly known as Smith & Wesson a little bit of news slipped through the gun blogs that not many people took notice of. Acclaimed AR-15 manufacturer Daniel Defense announced plans to both contract and expand its operations all at the same time.
Daniel Defense announced in October 2016 that they were consolidating (fancy name for closing) their Ridgeline, South Carolina factory and combining it with an expansion of their Black Creek, Georgia facility. While on the surface this sounds like a bad thing, company officials have said the investing of more than 18.5 Million Dollars into the existing plant will actually result in a net gain of at least 75 new positions. In an interview CEO Marty Daniel has stated the new facility with be more than 300,000 square feet and be fully operational by September 2017. The newly created positions will be in the machining, engineering, assembly and marketing areas of the company. The simultaneous moves by the company are best described by this quote from Daniel Defense CEO, Marty Daniel
“The consolidation will streamline our operational efficiencies on many different levels and will allow us to grow our team”
Marty Daniel, CEO Daniel Defense
The company has grown in recent years to be one of the leading manufacturers of AR-15’s and sported an impressive $73 Million in total sales with a 35% gross profit margin in 2016. Those are good numbers when you consider the company is privately owned and before the expansion only has 276 total employees. The company is well known for its SOPMOD MK18 rail system that has been fitted on many rifles used by many members of the United States Special Operations Command, but shockingly sales to the Department of Defense are not the company’s chief source of income. Consumer sales of AR-15’s and accessories were actually responsible for roughly 90% of the companies total sales in 2015.
What does the future hold for Daniel Defense?
It’s certainly an interesting time for gun manufacturers, but what does the post Obama world look like ? Many retailers and manufacturers are sitting on massive stock piles of guns and parts after spending months ramping up production in the fears that anti gunner Hillary Clinton had won the presidency. Now that we hopefully have at least four more years of our gun liberties we are finding that prices for military sporting arms are dropping rapidly. High capacity magazines can be had for as little as $7.99 new and ammunition is once again plentiful in most stores. Even calibers that had been needlessly hoarded like the .22 Long Rifle is available.
The State of Georgia has recently seen both Heckler & Koch and Daniel Defense invest large amounts of capital into their factories which are separated by just over 200 miles, but is this a good idea on their parts? Now I’m not the CEO of a gun manufacturer or even a production manager but I’m smart enough to see the prices on AR-15’s at their lowest point in at least eight years and I wonder how can companies like Daniel Defense, Colt, Smith & Wesson and others turn a profit on AR-15’s in such a saturated market.
It’s certainly a great time to be a firearms enthusiast in 2017 with rumors of suppressors being removed from the National Firearms Act, and possible easing of gun restrictions but what does the future hold ? Will the recent increase in quality AK-47 manufacturers put a damper on the AR-15 market or will the AR vs AK war continue? Will consumers really care is the bigger question. In my limited world of friends in the shooting community I actually only know of one person who is even considering getting an AR-15 in the near future, and thats only because he has never actually owned one and is curious. Many of us including myself have more than one AR-15 in our cabinets. In closing I will ask our readers, there is no denying Daniel Defense makes a great AR-15, but with AR-15’s at their lowest prices in years who is actually in the market for one now ?
Feature Image Courtesy:www.ammoland.com