INDUSTRY NEWS: JANUARY 2004

by Robert M. Hausman

Contrary to the common assumption that Europeans are virtually unarmed, an estimated 84 million firearms are legally held in the 15-member states of the European Union. Of these, 80% or 67 million guns, are in civilian hands, according to a new research report by the Small Arms Survey of Geneva.

Citizens of most European countries are more heavily armed than they realize, with an average of 17.4 guns per 100 people in the 15 EU countries alone,” says Aaron Karp, coauthor of the Small Arms Survey report. The United Kingdom has 10 firearms per 100 people. “Many, but not all countries of Europe already have a strong gun culture.”

The Survey’s report details that:

• Gun laws are tightest in the U.K., the Netherlands and Poland in per capita terms. Germans buy almost as many firearms as Americans.
• France has more lawfully held handguns than the Czech Republic, Denmark, England and Wales, Poland, Scotland and Sweden combined.
• Across Europe, officials agree that illegal guns greatly outnumber known legal firearms.

Global Small Arms Production

Another chapter in the Survey’s report focuses on global small arms production trends. The global small industry is becoming simultaneously more concentrated and more dispersed, the report says. Consolidation is accelerating, reflecting broader trends in the larger defense industry. At the same time, the global small arms market appears to be fragmenting as more and more companies develop the capacity to produce small arms. The result is the creation of an increasingly chaotic global market, with more suppliers, and more products, chasing fewer buyers.

Currently 1,134 companies in at least 98 countries are involved in some aspect of small arms production, an increase over previous estimates. At least 30 countries are regarded as significant producers, with the United States and the Russian Federation dominating the global market. Between them, these two countries account for more than 70% of total worldwide production of civilian firearms. Although the civilian market is the largest part of the global small arms business, accounting for more than 80% of annual production, it is innovation in the military market that generally defines the cutting-edge of small arms technology.

The global small arms industry faces an unclear technological future, according to the authors of the report. With its core technology stuck on a plateau for the last 50 years and almost certain to stay there for many years to come, it has no obvious possibilities for dramatic growth by developing new markets. While some individual firms are prospering, the industry as a whole seems to be restructuring downwards, the report states. Instead of a single pattern, there are numerous and contradictory trends. Though overall sales are down, the number of firms is up. Companies are consolidating while the market becomes more fragmented, expanding while their markets are shrinking, developing new products while most of their technology stands still. Thus, the report concludes, that the global small arms industry has only postponed a more fundamental reckoning.

At least 18 countries in Central and Eastern Europe (CEE), excluding the Russian Federation, have the capacity to produce small arms and/or ammunition. Since the end of the Cold War, this region’s defense industry has undergone a dramatic downsizing, restructuring, consolidation, and privatization, with output and employment shrinking by 90% in some countries. Those firms that survive either rely heavily on state contracts and subsidies, or now aggressively pursue export markets.

The Small Arms Survey organization, based in Geneva, Switzerland, is a research project funded by 12 governments. Small Arms Survey 2003: Development Denied is its third annual global analysis of small arms issues, published by Oxford University Press.

Eduard Kettner Under New Ownership

Some of the assets of financially troubled German retailer and wholesaler Eduard Kettner have been acquired by a combination of owners.

Some of the retail shops inside Germany and abroad, the wholesale operation and a travel agency specializing in arranging hunting trips formerly belonging to Kettner, were sold on July 9th. The new owners are Michael Luke and Thomas Ortmeier, the same two who two years ago bought the companies in the group composed of Blaser (a producer of rifles), Sauer & Sohn, Haemmerli, and Mauser rifles. Various other investors have been negotiating for several weeks with the insolvency administrator, Hans-Gerd Jauch, who commented, “The sale of the companies group to the new owners was the best economic solution for Kettner’s creditors. The new management disposes of sufficient energy and knowledge to lead Kettner into a successful future.”

Frankonia Jagd, Germany Expanding

The noted retailer Frankonia Jagd has also bought part of Kettner’s business. By taking over three retail sales shops formerly operated by Kettner, Frankonia Jagd, Wuerzburg is increasing their number of sales shops situated in Germany.

The new shops in Cologne, Dortmund and Bexbachh (close to Saarbruecken) are offering more than 2,500-square-meters of sales space. The manager, Thomas Gigl, stated, “This is one of the first steps we are going to realize while we keep on expanding as the German market leader of the outdoor branch.”

Managing Constructor of Zastava Gun Factory Dies On May 28th, the managing constructor of Zastava, the Yugoslav gun factory, Rudoljub Matkovic, died at the age of 69. Matkovic was much involved in technical gun development as well as new products in the fields of hunting and sporting guns.

It was Matkovic who designed the first Zastava revolver as well as a Mauser rifle system reduced by 30% to be used in carbines. During the 1990 S.H.O.T. Show, he introduced the CZ99 double-action pistol from Zastava’s production. He continued to represent his company through the ensuing years and made his last appearance before the trade at the 2003 IWA fair in Nurenberg, Germany.

Matkovic was also a member of the International Commission for Standardization of Guns and Ammo (CIP) for more than 20 years. He looked forward to and participated in planning the 150th anniversary celebration of his company in Kragujevac, shortly before he died.

Ferlach Technical School Now 125 Years Old

The technical establishment of secondary education situated in Ferlach/Kaernten, Austria, is celebrating its 125th anniversary.

The head of the government of the province of Kaerten, Dr. Joerg Haider, welcomed to the celebration ceremony two of the most successful German students of that school, namely, Edgar Budischowsky, once the owner of Korriphila Praezisionstechnik in Heidelberg, and Wulf-Heinz Pflaumer, manager of Carl Walther Sportwaffen in Arnsberg. Both of them graduated from the school 40 years ago.

New Address for Haemmerli, Switzerland

Haemmerli, the Swiss producer of handguns has moved from its place of foundation in Lenzburg after 140 successful years. The company was founded in 1863 by Johann Ulrich Haemmerli very quickly found international success. First starting with the production of rifle barrels for the Swiss army, the company nowadays produces a wide range of sporting guns that are the result of years of investment and the realization of innovative ideas.

Haemmerli can now be found under the address of the well-known SIG Arms company (today Swiss Arms AG) in Neuhausen, Switzerland. The joining of the two gunmakers yields tremendous potential for the future and a lot of advantages such as common know-how and workflow.

The manager of Haemmerli and Swiss Arms AG, Dieter Wyss, notes that the existing structure of Swiss Arms production plays an important part in the combined company’s overall strategy. The firms are specialized in the production, assembly and quality control of sporting guns. Both of the companies will take advantage out of this joining and be able to increase the output as well as achieve faster new product development, Wyss reveals.

Minox-Camera Designer Dies at 97

In July, Dr. Walter Zapp, designer of the legendary Minox miniature camera series, died in Switzerland. He was born in Riga, Latvia in 1905.

Zapp never attended high school nor had a professional education. His excellent technical talent supported him to develop the smallest still camera in the world still being in serial production. After World War II, a quantity of 17,000 examples were produced in Riga. From 1984 until 1995, the camera was produced in Heuchelheim, Germany. In 1996, economic difficulties led to the take over of the company by Leica Camera AG. Zapp acted from this time in an advisory capacity and assisted in new product development. Almost one million Minox cameras have been sold worldwide.

.N. to Move Annan’s Submachine Guns

The United Nations has agreed to move a supply of submachine guns out of its New York City headquarters. Under pressure from the Bush Administration, the U.N. agreed to move the H&K MP5s to its peacekeeping operations overseas.

U.N. security chief Michael McCann purchased the arms in 1998 for the personal protection of Secretary-General Kofi Annan during his travels through the city. The arms were often visible in the support van of Annan’s motorcade as it moved through the city.

The State Department’s Diplomatic Security Service (DSS) said it was unclear why Annan’s bodyguards need such arms. The DSS, under an agreement with the U.N., is in charge of Annan’s protection when he is in the US. The U.N. security force does not have “law-enforcement status,” said a source at the US mission in New York. The Bureau of Alcohol, Tobacco, Firearms & Explosives originally denied the U.N. permission to purchase the guns. Key factors in the decision were the U.N. security department’s lack of formal status as a law enforcement agency and the risk of non-US citizens gaining access to the arms, State Department sources said.

However, the U.N., aided by senior officials in the Clinton Administration, persuaded BATF to grant permission. In February 2002, the Bush Administration ordered a review of the U.N. security officers’ use of the arms. Shortly after the 2002 BATF examination, U.N. security officials told The Washington Times the MP5s were removed from Annan’s security detail and locked up.

State Dept. sources said the U.N. and BATF never reached an accommodation that would have allowed the rifles back on the streets of New York. The U.N. agreed to transfer the arms outside the U.S. It was not clear when the guns were to be moved. “We were told the guns are headed to U.N. peacekeeping operations,” said one US diplomat.

Importer Adds US Distributors

SGS Importers International, Inc. of Wanamassa, New Jersey, and USA has appointed Bonitz Bros. as an additional Firestorm distributor for Pennsylvania. Now there are four JSC locations Jerry’s Sport Center, Outdoor Sports Headquarters, Simmons Gun Specialties and Bonitz Bros. that sell Industria Argentina-made Firestorm handguns in the states of Pennsylvania, W. Virginia, Kentucky, Ohio, Illinois, Indiana, Michigan, Wisconsin, Minnesota, Kansas, Nebraska, Iowa, and North and South Dakota.

New German Gun Law Decree

A decree added to the new German weapon law published on March 30, 2003, bans ownership to ordinary citizens of all firearms formerly owned by a police, security or military institution. Exempted are single-shot long-barrel guns. Firearms with a barrel length under 3 inches are now also banned.

The government has also tried to ban shooting from the prone position as done in such disciplines as IPSC, due to safety concerns. The various German shooting associations have filed a petition against this move and the matter has not yet been finalized on whether or not this prohibition will take effect.

Sweden Bans Lead Ammo

The government of Sweden has imposed a ban on lead-based hunting ammunition that will take effect in the year 2007.

Lapua, the Finish ammunition producer, reacted quickly by developing its new “Naturalis” ammunition line that is already on the market. Naturalis cartridges consist of a copper alloy hollow-point bullet containing a plastic valve. The valve is said to cause controlled expansion of the bullet to approximately 2.1 times of the original caliber diameter.

Sales prices for the already introduced cartridges in 6.5x55mm, .308, .30-06 and 9.3x62mm range from 40 to 52 Euro. Cartridges in 7x64mm and .300 WinMag. are to be introduced shortly.

Robert M. Hausman is the publisher of the small arms industry’s two most widely read trade publications, The New Firearms Business and The International Firearms Trade. A subscription to the domestic Firearms Business costs $112 for one-year (22-issues), while a one-year subscription to the monthly International Firearms Trade is just $72. To order a subscription, send a check to: P.O. Box 98, St. Johnsbury, VT 05819 USA.