Ten years ago, the mythological small arms plant of Israel Military Industries (IMI), known back then as “Magen”, was privatized, having accrued substantial economic losses. About a decade later, the new privately-owned company, known as Israel Weapon Industries (IWI), dominates dozens of markets and supplies small arms to armed forces and law enforcement agencies worldwide. The small arms plant is now the mainstay of the SK Group headed by businessman Sammy Katzav.
“In order to reach the position where we are today, I believe we needed the vision Sammy Katzav had in the days when the ‘Magen’ plant was on the ropes and nobody wanted to touch it,” says, retrospectively, Uri Amit, who has served as CEO of IWI since it was privatized. “The ‘Magen’ plant was regarded as one of the largest loss generators of IMI. Even after the actual acquisition, it took a lot of courage to make the decisions that led to massive investments in the renewal of the machinery and production facilities. It was not a trivial matter, but it worked. The Company currently has a personnel of 520 employees as opposed to 80 on the day it was acquired. It is growing and developing and has cooperative alliances worldwide.
“Today, IWI is one of the world’s leading small arms manufacturers, along with such companies as FN, Barrett Firearms and a few others. We manufacture the entire range of small arms that military personnel may require – from handguns through assault rifles and sniper rifles to machineguns and various types of launchers. In the past, we were unique owing to the fact that we had a sister company from the field of optics, Meprolight. Today, other companies have adopted the same model. The connection between firearms and optics is self-evident.”
Was 2015 a good year, during which the growth trend in the small arms market continued?
“2015 was not a good year for the small arms industry. The US civilian market, which registered a tremendous breakthrough at the beginning of the decade, slowed down in the last year to the point of a 50% decrease in sales. This sharp decrease led companies whose primary sales had been in this market to intensify their competitiveness. Other companies collapsed altogether. For example, a renowned firearms manufacturer like Colt, along with 200 smaller companies, failed to survive and disappeared from the market.”
Did the sharp decrease in the sales of small arms to the US civilian market stem from changes in regulation?
“No. I think that after a few years of intensive market activity, the consumers simply exhausted their potential. The sharp increase in the years prior to 2014-2015 had stemmed, to a considerable extent, from the fear that new regulation will ban firearms sales. This did not happen, but the threat still remains.
“In addition to the US civilian market, the global firearms market was also influenced by the sharp drop in oil prices, which led to a decrease in the defense budgets of many countries that rely on oil in their exports.
“As far as we were concerned, the decrease in the global market did not lead to a very serious situation, but it definitely broke off the succession we had become accustomed to, of a growth trend of a few dozen percent every year since the privatization in 2005.”
Did your sales decrease in 2015?
“Our sales did not increase. We definitely expected this to happen and were in the process of consolidating our global status and dominating new territories, which stopped. But according to the initial indications we have, 2016 will be a better year than 2015.”
How will this be reflected?
“This year we intend to introduce to the market a number of new firearms we have been working on for a few years. The most notable firearm that is currently undergoing improvements is the 7.62mm caliber Negev machinegun as opposed to the 5.56mm version that has been in existence for many years and is used by the IDF, among others. I have no doubt that the 7.62mm Negev is the world’s best light machinegun. We will introduce it for the first time at the Eurosatory 2016 exhibition in Paris, next June.
“The 7.62mm machinegun contains more than 50% of the parts of the 5.56mm version. The weight is similar – around 7.5 kilograms, as well as the range – 1,000 meters.
“The difference is in the caliber, which is significant, as some armed forces have accepted the notion according to which 7.62mm machineguns are heavy support weapons positioned statically on a hill and pouring fire into the battlefield, while the 7.62mm Negev is an assault weapon. It is practically a different concept that opens a new era.”
Do you think that the terrorist attacks in Europe in late 2015 can lead to an increase in the demand for small arms?
“Not as far as we are concerned. Europe, to a considerable extent, is closed to us, for reasons that are probably political rather than practical. We have not been able to enter Western Europe. The 7.62mm Negev machinegun may be the first item, as far as we are concerned, which succeeds in entering this market.”
So what are the markets offering the greatest potential for you?
“Our markets are, in fact, the entire world and especially countries in the third world. In many of those countries we are the most dominant manufacturer offering western firearms. In central and south America and Asia and naturally in the US civilian market we are selling very well.”
Let’s elaborate on Asia – what can you tell us about your operations in Vietnam and Thailand, where, according to reports in the global media, you have massive sales?
“Generally, we never discuss our clients, so I would rather not comment, but based on the reports of others I can state very proudly that our locally-produced Ace rifle is the primary firearm of the Colombian Army, and the same goes for the Chilean Army.”
What is your “blockbuster”, your best-selling firearm?
“We do not have one or two specific firearms that are more dominant than the others. Our Tavor and Micro Tavor assault rifles account for a few dozen percent of our sales turnover, but the same can be said about the Ace rifle, which competes in the same category, as well as about the handguns. None of our firearms accounts for more than 30% of our sales.”
Does the uniquely-shaped Tavor assault rifle, which has become a primary firearm in the IDF and in other armed forces, fulfill your expectations?
“The Tavor and Micro Tavor are bullpup configuration firearms, as their mechanism and magazine are positioned behind the trigger and the trigger pull is transferred backwards. With this design, you can have a rifle that is only two-thirds as long as a standard rifle with the same barrel length. Additionally, with conventional long rifles, the center of gravity is at the front, so you must hold the firearm with both hands in order to fire it. A rifle that is physically smaller is very easy to operate with one hand, as the center of gravity is at the back, between the shooter’s shoulder and gripping hand. You can also rest it on a window of a house or a car. It is highly suitable for warfare in modern environments, but the reason it has not dominated the world yet is that back in the 1960s, several bullpup rifles were introduced that were unsuccessful, so there are armed forces that are still reluctant to adopt this configuration.”
Does the buzz around the Tavor SAR still continue in the USA, after it had been selected as 2014 Rifle of the Year by American Rifleman Magazine?
“Yes, but it is regarded as a premium-grade firearm so it will never account for dozens of percent of the market segment. In the USA it is well established as a very special firearm used by the Israel Defense Forces.”
Has the field of materials for use in the manufacture of small arms evolved over the years?
“Small arms have evolved over the last 100 years but in a very evolutionary, slow and minor way.
“Improvements can come from the field of material selection, firearms today are lighter and more ergonomic. The field of materials has already switched to composite materials in firearm frames – both handguns and rifles. I would say that we have already covered most of the way. Generally, there is a lot of conservatism and reluctance to accept innovations among the forces that operate in this world. Apparently, this conservative approach will remain influential in the future as well – innovations will come in through the back door and very slowly.”
Is the evolution of the systems mounted on rifles faster than the evolution of the rifles themselves?
“Certainly. The introduction of electro-optics into the world of firearm sights has been amazing. Progress is still on-going and there are constant innovations in the worlds of accessories that may be mounted on firearms. They are not integral or built into the firearm, but mounted on the firearm. Manufacturers have adopted the approach of ‘systems on systems’, which in fact provides them with the ability to offer the same goods to the same dealers. Above the basic platform there are systems that keep evolving all the time.”
You have recently introduced your E-Log system at the Israel Defense International Logistics conference. What is it all about?
“E-Log is a new system with multiple features. Basically, it is a battalion-level system for managing small arms logistics.
“The system opens the door for a different approach to firearm preparedness by using a round counter. So far, in the absence of a way to determine how many rounds a firearm had fired, the world’s dominating concept was one of breakdown maintenance, namely – you only repair something when it has broken or failed to operate. This system enables you to go into battle in a state of preparedness. Your firearms must be in peak condition. Mileage in firearms is the number of rounds they had fired – you need to know the number of rounds fired. It is a completely new paradigm which enters a realm where once they never thought about it.
“The system consists of three elements. The first element is mounted on the firearm and contains electronics that count the rounds fired. It indicates when the rounds were fired and at what sequence. The second element is the reader which you can operate in the armory or under field conditions. This unit is operated by the armorer. It uses wireless communication. The reader accesses the sensor mounted on the firearm, interrogates it and receives a response. This is an active process of requesting information. You can use the reader to obtain information about firearms located at ranges of hundreds of meters from one another – all of this information is transmitted to a single center. At the armory, you can determine your inventory not by actually inspecting the firearms but by sending an interrogative call into space to which the firearms will respond. The third element is a computer running a logistic software designed to manage the firearm inventory in the armory.”
So the output of the E-Log system is economic primarily, or does it have operational values as well?
“The output can be determined according to the user and his needs. For example, in the case of a military element for whom the most important aspect is the preparedness of the firearms – the output will be preparedness and the confidence that comes with it. In the case of the element in charge of ammunition inventories who cannot determine what actually happens to the ammunition issued to the unit – the output will be the number of rounds consumed. There can be a third type of output, for a base commander who wants to know, when he comes to the armory, whether any firearms had been stolen or whether the armory had been broken into last night. With this system, control is full-proof – you will be able to tell if any one of the firearms had been touched. This system offers numerous capabilities and versatile operation according to the client’s needs.”
What other products will you be presenting in 2016?
“We have a new .338 caliber sniper rifle. We have already presented it in the past, but now we are going officially into a live and kicking production line for this rifle. This rifle is designated Dan. The .338 caliber is, in fact, the new buzzword in the sniper world. This is a highly accurate rifle. It was designed for military use but we will, of course, offer it to the US civilian market, for hunters. Its original designation, however, is to serve as a high-precision sniper rifle. The ammunition it uses is more powerful and lethal than the 7.62mm ammunition which until recently was the standard round used by snipers.
“This rifle is very similar to standard sniper rifles, it weighs a little more than five kilograms and is our answer to the military sniper rifles currently available on the market.
“Another product we will be presenting is a 40mm launcher. We will present several variants of this launcher. One of them is ergonomically designed to be a part of the Tavor AR. The present launcher used on the Micro Tavor is a US-made model that mounts on the rifle like a hump – not really natural. Our new launcher attaches more tightly and closer to the center of gravity of the Micro Tavor AR. In fact, the launcher is already geared for the day when grenades with a longer range will be developed. It is accurate in its own right and uses sights manufactured by our sister company, Meprolight.”
Is the IDF acquiring this launcher?
“I cannot comment at the moment.”
Does the fact that IDF uses a major part of your firearm range help promote your sales overseas?
“95% of our sales are to clients around the world, and our number one sales promoter is definitely the IDF. Many clients ask whether the IDF is using what we offer. Our firearms are actually being developed through very close cooperation with the IDF and in view of the needs, so its operational characteristics and ergonomics are naturally graded higher than those of our competitors. I think the examples of the Tavor and Micro Tavor reflect this statement very effectively.”