Somebody really needs to create an independent Canadian primer fab

steelgray

steelgray

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If ever there was a business opportunity waiting to be developed, it is certainly now.

That opportunity is clearly for some enterprising person to set-up a Canadian micro fabrication plant to make Large Rifle Primers (“LRP”). The unsatisfied demand for primers in Canada is such that anybody who set-up a manufacturing operation to make these simple things - and sell them through existing channels - would certainly recoup their investment in a matter of a couple of months. More specifically, the capital cost of setting-up an independent primer manufacturing operation in Canada would be way less than, for example, the cost of establishing a micro brewery, or an independent commercial bullet casting operation.

Heck, entrepreneurs have already stepped-up to make a complete Canadian market rifle – the WK180C – and they deserve credit for that business acumen!! How much simpler it would be to just set-up a manufacturing operation to make primers; presumably one of the easiest products anybody could set-out to make.

I'm sure that the real cost of making a brick of primers - when you were set-up to do it in even low volumes - would be probably about 5 bucks, and even back in the old days, a brick went for around 20 bucks. Right now. if somebody produced reliable LRS and sold them through existing retail channels like - Higginson Powders etc. - the new independent manufacturer could easily sell a brick WHOLESALE for $30.

In fact, demand is so hot that I suggested new independent manufacture of primers could probably just sell direct to the consumers online and cut out the middleman. In that case, people would be falling all over themselves to buy a brick online for 80 bucks. Not bad for something that the new vendor could make for 5 bucks.

Maybe Higginson’s itself should set-up such a manufacturing operation. They aren’t really that busy at the moment; considering that they have just about zero inventory of anything. Do you know that they actually used to manufacture jacketed bullets right her in Canada, back in the day?

Obviously, we in the shooting community would also embrace this new vendor because heck they’re Canadian! Further, this would be a nice guard against Trudeau getting the idea to screw-up shooting sports even more than he already has by, for example, establishing new restrictions on the import of foreign-produced primers.

I'm not kidding. If you're an entrepreneur don't bother investing in a KFC franchise. Set-up a Canadian primer fab. When you make your first million, you can thank me for the idea.
 
If a person had happened to have set up a primer manufactory 4 years ago, he would have done very well.

But today? Probably not. We are probably not more than a few weeks from the return of normal primer supply.

As for your rosy projections, my guess is your regulatory compliance costs alone would probably consume that $5 per brick you are citing, before you ever put a shovel in the ground.

The reality is that in today's world, you can't do anything small scale. By the time you figure out the regulations, pay the insurance, build the code-compliant facility, and pass the environmental audits, you probably need to make 5 million primers a day to break even.
 
BattleRife said:
If a person had happened to have set up a primer manufactory 4 years ago, he would have done very well.

But today? Probably not. We are probably not more than a few weeks from the return of normal primer supply.

As for your rosy projections, my guess is your regulatory compliance costs alone would probably consume that $5 per brick you are citing, before you ever put a shovel in the ground.

The reality is that in today's world, you can't do anything small scale. By the time you figure out the regulations, pay the insurance, build the code-compliant facility, and pass the environmental audits, you probably need to make 5 million primers a day to break even.
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I have two business degrees, ... really.
 
I have been looking at this. I printed a few stacks of information and documents about doing primers. Research into the requirements and the insane laws canada has.. I've done some of the DDG and ammo course which is an eye opener. I had crazy ideas which..."would" solved most issues mentioned. I do already have a regular job so I didn't feel the need to jump into it. I think the few elements I needed a chemical engineer for a few things and sourcing the primary explosive. Hiring an engineer was bottleneck since that probably means working with a firm which would mean a things... I think my cost estimates were very... very favorable. Especially if done with minimal staff.

So a good example is that SNC Lavalin makes the CAF's ammo in 2 factories, one for energetic material and another for metal forming, so I really don't understand why they can't be cool and just do a few hundred thousand or million extra primers for civilian use. The demand is there. They could charge like 200% and make a ton of money. Maybe they're just too far up the LPC's a$$.
 
Bile said:
Maybe they're just too far up the LPC's a$$.
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They may just be waiting for someone to set up shop, and at the last moment inform the investors that they will price the new firm out of existence. Then get a nice govt contract as a reward. When I lived in a merchant bank I saw this kind of thing. Business is war.
 
I have troubles believing a Canadian manufacturer would ever be able to produce enough to compete with the prices offered by established primer makers. If your timing was absolutely perfect to line up with the next supply drought you might do alright for a few years but its well past the time to take advantage of the current shortage and I just can't see it working out as a long term business venture having to compete with a steady supply coming out of the big US companies that already have market share, already have the production capacity and supply chains for materials and everything else one needs to run a successful business.
 
steelgray said:
If ever there was a business opportunity waiting to be developed, it is certainly now.

That opportunity is clearly for some enterprising person to set-up a Canadian micro fabrication plant to make Large Rifle Primers (“LRP”). The unsatisfied demand for primers in Canada is such that anybody who set-up a manufacturing operation to make these simple things - and sell them through existing channels - would certainly recoup their investment in a matter of a couple of months. More specifically, the capital cost of setting-up an independent primer manufacturing operation in Canada would be way less than, for example, the cost of establishing a micro brewery, or an independent commercial bullet casting operation.

Heck, entrepreneurs have already stepped-up to make a complete Canadian market rifle – the WK180C – and they deserve credit for that business acumen!! How much simpler it would be to just set-up a manufacturing operation to make primers; presumably one of the easiest products anybody could set-out to make.

I'm sure that the real cost of making a brick of primers - when you were set-up to do it in even low volumes - would be probably about 5 bucks, and even back in the old days, a brick went for around 20 bucks. Right now. if somebody produced reliable LRS and sold them through existing retail channels like - Higginson Powders etc. - the new independent manufacturer could easily sell a brick WHOLESALE for $30.

In fact, demand is so hot that I suggested new independent manufacture of primers could probably just sell direct to the consumers online and cut out the middleman. In that case, people would be falling all over themselves to buy a brick online for 80 bucks. Not bad for something that the new vendor could make for 5 bucks.

Maybe Higginson’s itself should set-up such a manufacturing operation. They aren’t really that busy at the moment; considering that they have just about zero inventory of anything. Do you know that they actually used to manufacture jacketed bullets right her in Canada, back in the day?

Obviously, we in the shooting community would also embrace this new vendor because heck they’re Canadian! Further, this would be a nice guard against Trudeau getting the idea to screw-up shooting sports even more than he already has by, for example, establishing new restrictions on the import of foreign-produced primers.

I'm not kidding. If you're an entrepreneur don't bother investing in a KFC franchise. Set-up a Canadian primer fab. When you make your first million, you can thank me for the idea.
Click to expand...

The fact that you call them simple to make tells me everything I need to know. If it was as easy as you say it is it would've been done.
 
Tell me you've never run a business without telling me you've never run a business.

This thread right here. Especially a firearms related business in Canada.
 
Bile said:
...So a good example is that SNC Lavalin makes the CAF's ammo in 2 factories, one for energetic material and another for metal forming, so I really don't understand why they can't be cool and just do a few hundred thousand or million extra primers for civilian use. The demand is there. They could charge like 200% and make a ton of money. Maybe they're just too far up the LPC's a$$.
Click to expand...

General Dynamics bought out SNC years ago. They have no interest in the commercial market.
 
steelgray said:
If ever there was a business opportunity waiting to be developed, it is certainly now.

That opportunity is clearly for some enterprising person to set-up a Canadian micro fabrication plant to make Large Rifle Primers (“LRP”). The unsatisfied demand for primers in Canada is such that anybody who set-up a manufacturing operation to make these simple things - and sell them through existing channels - would certainly recoup their investment in a matter of a couple of months. More specifically, the capital cost of setting-up an independent primer manufacturing operation in Canada would be way less than, for example, the cost of establishing a micro brewery, or an independent commercial bullet casting operation.

Heck, entrepreneurs have already stepped-up to make a complete Canadian market rifle – the WK180C – and they deserve credit for that business acumen!! How much simpler it would be to just set-up a manufacturing operation to make primers; presumably one of the easiest products anybody could set-out to make.

I'm sure that the real cost of making a brick of primers - when you were set-up to do it in even low volumes - would be probably about 5 bucks, and even back in the old days, a brick went for around 20 bucks. Right now. if somebody produced reliable LRS and sold them through existing retail channels like - Higginson Powders etc. - the new independent manufacturer could easily sell a brick WHOLESALE for $30.

In fact, demand is so hot that I suggested new independent manufacture of primers could probably just sell direct to the consumers online and cut out the middleman. In that case, people would be falling all over themselves to buy a brick online for 80 bucks. Not bad for something that the new vendor could make for 5 bucks.

Maybe Higginson’s itself should set-up such a manufacturing operation. They aren’t really that busy at the moment; considering that they have just about zero inventory of anything. Do you know that they actually used to manufacture jacketed bullets right her in Canada, back in the day?

Obviously, we in the shooting community would also embrace this new vendor because heck they’re Canadian! Further, this would be a nice guard against Trudeau getting the idea to screw-up shooting sports even more than he already has by, for example, establishing new restrictions on the import of foreign-produced primers.

I'm not kidding. If you're an entrepreneur don't bother investing in a KFC franchise. Set-up a Canadian primer fab. When you make your first million, you can thank me for the idea.
Click to expand...

A few years ago we started to follow in Voere's path for case less ammo. The hurdles the gubbermint put forward although not insurmountable as long as you have deeeeeeeep pockets were ridiculous. Property for facility "must be x number of meters from anything", "must be of fireproof construction and be engineered to withstand a blast several times greater than what the entire chemical storage is" as well as a ton of other ludicrous provisions. Then insurance rears its ugly head, the premiums alone were staggering.

CIL had an explosive manufacturing plant just outside Calgary that blew up in the late 70's or early 80's. They opted not to rebuild due the the newer regulations that made it cost prohibitive.

I suspect manufacturing primers would not be much if any different.
 
I get it. You're all out to prove that, if you try hard enough, you can always find a reason not to do something.

For example, we have one guy already who is saying there's no point because the primer shortage will be solved – and things will be back to normal – in a couple of weeks. Yeah right. I bet that guy is a huge Trudeau fan because he's obviously been smoking too much of that Justin T’s "Wacky Tabaccy". Then, there’s another gentleman who claims that this would just be WAY too complicated and, as proof, that’s why some company didn’t rebuild a big plant, after it exploded.

Seriously?

We aren't talking rocket science here. We're talking about one of the simplest manufacturing operations going – consisting of putting two little stamped metal parts together with a bit of chemical compound in between.

By comparison, it's an order-of-magnitude more complex to design and manufacture a brand-new firearm and bring it to market, like the WK180-C; and that business initiative would have attracted massive actual capital costs and required lots of permitting licences and approvals. Yet that got done, in spite of capital costs being many times higher with much lower profit margins – and in spite of there being much more risk; especially from potential adverse government actions.

I’m NOT talking about a mega factory, serving world demand. Rather, I’m suggesting what I’ve called a “micro fab”, set-up with a low break-even point with enough capacity to service part of the Canadian market. The investment to set-up such an operation would be WAY less than the cost of buying a Subway, or KFC franchise, or setting-up an auto body repair shop, or a “make-your-own” wine store, or an independent corner gas station, or whatever. But unlike those operations, the profit margins would be fantastic.

Your independent corner gas station is lucky to make 2% on sales, whereas a conservative estimate suggests that the direct cost of making a brick of primers – in a micro fab – might be $5 and the sales revenue would be at least seven times that – even if you sold wholesale, through existing channels. If you went direct to consumer, you’d have higher marketing and distribution costs (maybe adding-up to a total direct cost of goods sold of 8-10 bucks a brick), but your revenue would be at least $80 per brick and you could sell whatever you could make at that price – now and into the foreseeable future.

You will not find a business opportunity like that anywhere else. A high profit margin protects you against downside risk. As for permitting, yeah that’s a part of any business. In fact, you might well find that some businesses might have some of the required explosives permits already (like Marstar, Higginson’s, etc.) .

As far as I can see, making primers isn't really any kind of a capital-intensive business. Sure, making cartridge cases would require a lot of investment in equipment, but that's not what we're talking about. We're talking about stamping-out a couple of little pieces from thin sheet metal; presumably using the same kind of light duty presses that are used, by industry, for making small washers, etc.

Far from this business being “capital-intensive” I understand – from one guy who probably knows what he's talking about – that the reason that there are primer shortages, is because the major ammo manufacturers are facing challenges getting people to work in their primer plants, at US minimum wages, because the priming compound needs to be dabbed into the primer cups by people. And these ammo OEMs are too cheap to pay these relatively-unskilled labours the money that they deserve.

I'd say you probably want to set-up the fab in the outskirts of some small town – like Renfrew – and pay the workers 20 bucks or more an hour. When Higginson set-up its jacketed bullet manufacturing plant, in the 60s, it put that micro fab in Shawville, Quebec – and I think Tom Higginson got a whole bunch of local employment grants, which paid for most of the capital costs. I think Tom H. told me that the whole manufacturing set-up cost him around 8,000 bucks – and he hardly had to pay any of that himself.

Let’s try-out some numbers here. Let’s say you need to invest $15-25K in equipment for both the manufacturing of the primers and packaging them. Let’s say this equipment can produce 100 bricks a day.

In the case where you sell straight to the public, your profit margin might be $70 per brick. That is a contribution to direct costs of $7,000 per day. Say, your rent, heat power and other fixed costs are $3,000 per month and you produce 22 days a month. That means your monthly contribution to overhead is $154,000 per month, less $3,000 per month for overhead costs. You are looking at a net income, before tax of $151,000 per month. If your capital investment was $25K you will recoup that investment and achieve “payback" on your investment in about 4 and a half days of operations!

You buy a KFC franchise and you’re going to have to invest nearly a million bucks – and you’ll be lucky to see payback in 4 years. And worse yet, you might have to actually eat some of that stuff.

This analysis conservatively assumes that the person who sets-up the operation is starting from a “clean sheet of paper” – with no existing assets, or marketing channels to leverage. The deal would be just that much better, if there was somebody out there who already had surplus space that they needed to apply, to achieve an economic return.

Ditto this would be an even better deal for people who already had the right kind of equipment that could be repurposed to the job, or people who already had the necessary marketing channels or business permits (again perhaps like Marstar or Higginson, Western Metals, etc.)

You will never see a business opportunity like this again.

alberta tactical rifle said:
A few years ago we started to follow in Voere's path for case less ammo. The hurdles the gubbermint put forward although not insurmountable as long as you have deeeeeeeep pockets were ridiculous. Property for facility "must be x number of meters from anything", "must be of fireproof construction and be engineered to withstand a blast several times greater than what the entire chemical storage is" as well as a ton of other ludicrous provisions. Then insurance rears its ugly head, the premiums alone were staggering.

CIL had an explosive manufacturing plant just outside Calgary that blew up in the late 70's or early 80's. They opted not to rebuild due the the newer regulations that made it cost prohibitive.

I suspect manufacturing primers would not be much if any different.
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If it's as easy as you are suggesting someone would have done it by now. But by all means, we'd all love to be proven wrong so stop pontificating and go start a company!

IMO there must be a reason there is only 4 companies making primers in the USA, and I bet economy of scale is a big factor. There are boutique ammo companies, there are boutique bullet makers, but no boutique primer companies. Why is that?
 
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Go ahead, prove us wrong then. We’re merely trying to tell you that it’s not as simple as you think it is. Yes primers are still just tiny metal cups, but that’s the easy part. You’re still dealing with explosives. There’s a ridiculous amount of insurance and regulation. Do you know how to make priming compound? It’s not the same as making bullets. Have you heard of Expansion Industries? They’re taking over an old US army ammunition plant to make primers. There’s been talk of them doing that since as long as the pandemic’s been going on and just now they’re finally starting up production. It’s been so long people think it’s vapourware. Prove us wrong Mr. Business Degree. We’d all love more primers for better prices. But the way you talk I don’t think you will.
 
steelgray said:
I get it. You're all out to prove that, if you try hard enough, you can always find a reason not to do something.

For example, we have one guy already who is saying there's no point because the primer shortage will be solved – and things will be back to normal – in a couple of weeks. Yeah right. I bet that guy is a huge Trudeau fan because he's obviously been smoking too much of that Justin T’s "Wacky Tabaccy". Then, there’s another gentleman who claims that this would just be WAY too complicated and, as proof, that’s why some company didn’t rebuild a big plant, after it exploded.

Seriously?

We aren't talking rocket science here. We're talking about one of the simplest manufacturing operations going – consisting of putting two little stamped metal parts together with a bit of chemical compound in between.

By comparison, it's an order-of-magnitude more complex to design and manufacture a brand-new firearm and bring it to market, like the WK180-C; and that business initiative would have attracted massive actual capital costs and required lots of permitting licences and approvals. Yet that got done, in spite of capital costs being many times higher with much lower profit margins – and in spite of there being much more risk; especially from potential adverse government actions.

I’m NOT talking about a mega factory, serving world demand. Rather, I’m suggesting what I’ve called a “micro fab”, set-up with a low break-even point with enough capacity to service part of the Canadian market. The investment to set-up such an operation would be WAY less than the cost of buying a Subway, or KFC franchise, or setting-up an auto body repair shop, or a “make-your-own” wine store, or an independent corner gas station, or whatever. But unlike those operations, the profit margins would be fantastic.

As far as I can see, making primers isn't really any kind of a capital-intensive business. Sure, making cartridge cases would require a lot of investment in equipment, but that's not what we're talking about. We're talking about stamping-out a couple of little pieces from thin sheet metal; presumably using the same kind of light duty presses that are used, by industry, for making small washers, etc.

Far from this business being “capital-intensive” I understand – from one guy who probably knows what he's talking about – that the reason that there are primer shortages, is because the major ammo manufacturers are facing challenges getting people to work in their primer plants, at US minimum wages, because the priming compound needs to be dabbed into the primer cups by people. And these ammo OEMs are too cheap to pay these relatively-unskilled labours the money that they deserve.

I'd say you probably want to set-up the fab in the outskirts of some small town – like Renfrew – and pay the workers 20 bucks or more an hour. When Higginson set-up its jacketed bullet manufacturing plant, in the 60s, it put that micro fab in Shawville, Quebec – and I think Tom Higginson got a whole bunch of local employment grants, which paid for most of the capital costs. I think Tom H. told me that the whole manufacturing set-up cost him around 8,000 bucks – and he hardly had to pay any of that himself.

Let’s try-out some numbers here. Let’s say you need to invest $15-25K in equipment for both the manufacturing of the primers and packaging them. Let’s say this equipment can produce 100 bricks a day.

In the case where you sell straight to the public, your profit margin might be $70 per brick. That is a contribution to direct costs of $7,000 per day. Say, your rent, heat power and other fixed costs are $3,000 per month and you produce 22 days a month. That means your monthly contribution to overhead is $154,000 per month, less $3,000 per month for overhead costs. You are looking at a net income, before tax of $151,000 per month. If your capital investment was $25K you will recoup that investment and achieve “payback" on your investment in about 4 and a half days of operations!



This analysis conservatively assumes that the person who sets-up the operation is starting from a “clean sheet of paper” – with no existing assets, or marketing channels to leverage. The deal would be just that much better, if there was somebody out there who already had surplus space that they needed to apply, to achieve an economic return.

Ditto this would be an even better deal for people who already had the right kind of equipment that could be repurposed to the job, or people who already had the necessary marketing channels or business permits (again perhaps like Marstar or Higginson, Western Metals, etc.)

You will never see a business opportunity like this again.
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Unlike a micro brewery where virtually any building would work and there are no stringent building requirements there are some REALLY big obstacles. PURCHASING land as it would be very unlikely to rent it or lease it given the application and then building a building that "might" be approved by NRCAN, IF you could find an MD or county that would entertain the idea of a "munitions manufacturer" would be a $3 to 5 million dollar touch, at least out here. Figuring on a 3000 sq ft building. Chances of finding an existing building that would be approved for the purpose by NRCAN would be extremely low, almost to the zero possibility.
Our current insurance which does NOT include ammo or components manufacturing runs north of $25K per year, I would expect that to at least triple. BTW Lloyds is the only insurance carrier that would even entertain an idea like this. I know, I asked around when we were looking to produce caseless ammo.

$25K goes absolutely no-where when it comes to automated punch machines to make the cups and anvils, closer to $150K I would think. Packaging machines are also not free. Good luck finding workers that will work for minimum wages, they make more on EI or welfare.

The assorted governments are of ZERO help in getting anything firearms related off the drawing board, I know as I have had to personally finance my operation from day 1.
Unlike manufacturers in the USA that are based in Idaho, Montana and Wyoming where grants seem to abound for any manufacturing. Even firearms and related parts.

I agree with you that NOTHING is impossible, but an undertaking like this would be a time consuming one to get off the ground and would require deeeeep pockets.
I agree it could turn a reasonable profit at least while demand is high and supply virtually non existent.

According to our Federal/CCI reps it will be at least another year until we start to see any normalization in primer supplies .
 
Nothing worthwhile is ever easy and yes, I have already started my own company. I'm sure that there is a reason why there are only 4 companies "producing primers" in the states, but I'm not sure it is a good reason. The reasons would be historic, and probably have ZERO to do with the economics of manufacturing primers in today's market - nor would this be any reflection of what technologies are available, today, to get into this business for different production levels.

Those companies are today's arrogant monopolists. They won't produce enough primers because they'd rather not cannibalize their very profitable ammo sales. That's good news because they really don't want to sell you a product that is in desperately low supply. That is the key to this opportunity (LINK).

Suther said:
If it's as easy as you are suggesting someone would have done it by now. But by all means, we'd all love to be proven wrong so stop pontificating and go start a company!

IMO there must be a reason there is only 4 companies making primers in the USA, and I bet economy of scale is a big factor. There are boutique ammo companies, there are boutique bullet makers, but no boutique primer companies. Why is that?
Click to expand...
 
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