Lexington Ammo Plant Shutdown

[CKAB]

Prepare for higher prices !

 

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THE SKY IS FALLING!!
A company expands its operation from selling gun parts and supplies, Palmetto States Armory, into manufacturing ammunition. This is done during an ammo shortage when raw materials are tough to get. Thats the first problem. It’s good thinking in that anybody that assembles a cartridge in those times could sell it. The problem is raw material supply.

Next you sign a deal for financial help from the state to employ a certain amount of people, when no one can work due to a pandemic, 2021. This deal includes a short and long term employment agreement. At the time it’s safe as your business is classified as essential, people can actually go to work there.

Five years later, the market has changed, raw materials are actually easier to get, unemployment has stabilized and prices are tumbling for your product, as larger more established companies are able to fill orders. Because they can get the raw materials, have employees and high demand.

It’s interesting that the powder shortage that is actually currently easing, is blamed for a shut down occurring at the same time, that it becomes clear you won’t be able to meet the five year employment goal. It’s pretty difficult during times of increased competition, falling prices and decreased demand due to panic buying subsiding, to double your staff and sell enough product to cover costs.

The ammunition plant currently employs 80 people. According their state financial incentive package, they need to employ 150 during the 5th year after purchasing the property. Thats not fives years after starting production.

Pretty bold business expansion gamble. You would think a company that has been through multiple panic buying events, might have seen this coming. Without a vastly different or quality in the product, cheap and available now only goes so far.

One of many articles available that better describes the failure.

https://www.thestate.com/news/business/article313333578.html