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ATK, ADG team to Modernize Stocks of Aging Tank Ammo

Alliant Techsystems (NYSE: ATK) and Allied Defense Group, Inc. (AMEX:ADG are teaming to modernize tank ammunition introducing Insensitive Munition (IM) based propellants and explosives. The team will initially focus on propellant replacement for aging tank rounds, produced in the 1980s, as they reach their 20 year shelf life limit. The introduction of IM has been mandatory in Europe, and will improve safety of ammunition in storage and during transportation, improve the mobility of supplies, both on land and at sea, and improve safety and survivability of armored vehicles carrying the ammunition. (More...)

According to ADG, the technology being introduced has the added benefits of reducing gun barrel wear and reducing overall stress to the platform, while providing higher energy for added range, accuracy and lethality. In addition to propellant replacement, the team also plans to introduce IM improved explosives to replace standard explosives currently used in the warheads of current tactical ammunition.

ADG is the owner of Mecar SA - the Belgian gun and ammunition maker and its US based sister company Mecar USA. The company plans to leverage the technology developed and demonstrated in the U.S. and Europe on similar ammunition types, to accelerate the introduction of the new process. According to ADG, by reducing maintenance cost to the platform and utilizing proven low cost production techniques, the overall cost of the ammunition is comparable to that of the current ammunition.

According to Major General (Ret) John J. Marcello, ADG's Chief Executive Officer and President, the new collaboration should open new channels and new markets for both companies. "This alliance will help ADG offset our reliance on our traditional customers and contributes to our efforts to smooth out the cyclical nature of our ammunition business.

ATK, a US$4 billion weapons and space company, is a major ammunition supplier for all US forces. In September 2007 ADG reported its order backlog exceeded $140 million, primarily from international customers. Mecar produces various types of ammunition, including 105mm howitzer rounds, 76mm gun cartridges, 81mm and 120mm mortar bombs, 25mm ammunition and proprietary Mk8 cartridges for the 90mm cannon, developed by the company and used by a number of armies worldwide. Mecar is also developing new ammunition for the Russian 115mm tank gun, a 120mm Multi-Function Urban Combat tank round, which will be available shortly.


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