Mystery customer pays $135m. for Israel's Elbit to build ammo factory

Elbit Systems, one of Israel’s three largest defense firms, said on Sunday that it has been awarded a $135 million contract to build a factory to build artillery ammunition for an international customer and that “the contract will be implemented over a period of two years.”

The news comes after the company’s Swedish subsidiary was awarded a contract worth $170 million to become an “integration partner” for the Swedish army’s digitization program.

The new contract will “leverage the significant technical and operational knowledge that Elbit Systems has accumulated, as well as decades of ammunition production experience. Elbit Systems builds and operates ammunition factories and production lines in multiple sites,” the company said.

The importance of ammunition supplies

“There is growing demand from governments around the world who are interested in enhancing their sovereign ammunition production capabilities. Supporting our customers and sharing our expertise with international partners is a key element of our multi-domestic global growth strategy, in addition to our ongoing investments to expand our own manufacturing capabilities,” said Yehuda (Udi) Vered, general manager of Elbit Land Systems.

Ammunition supplies have become increasingly important following Russia’s invasion of Ukraine in 2022. This is particularly true regarding 155mm ammo. Elbit says that its “experience covers the entire product cycle, from design to production as well as maintenance and after-sales support.”

Israeli defense companies saw record sales last year. However, the war that began on October 7 has generally eclipsed some of their work.

The announcement by Elbit is one of several recent sales. Meprolight announced last week that it had received a contract for tens of thousands of Mepro MOR sights to be sold to a South American country. The company, a member of the SK Group (founded by Mr. Samy Katsav), describes itself as “a leading manufacturer of electro-optical systems, and thermal and night vision equipment, as well as self-illuminated sights for military, law enforcement, and civilian applications.”

The Mepro MOR sights “effectively address three distinct needs within a single, sophisticated product – functioning as a battery-free passive reflector sight, a visible pointer, and an invisible IR [infrared] pointer. Consequently, this advanced solution yields substantial cost savings, enveloping operational and maintenance expenses that would otherwise be incurred by deploying three separate sights. Additionally, the Mepro MOR sights enhance mission flexibility, further elevating its utility and adaptability.”