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FACTORS DRIVING GROWTH OF THE U.S. PROTECTIVE ARMOR MARKET

U.S. PROTECTIVE ARMOR MARKET CONTINUES STRONG IN 2001

Following firm sales last year demand for protective armor products in the U.S. continued strong again in 2001. A number of factors are responsible for the favorable market conditions that exist in both the military and civilian sectors. In the civilian segment the most important component driving demand is The Bulletproof Vest Partnership Grant Act (BVP) of 2000 that was enacted at the end of last year which sets in place funding of $50 million a year for three more years beyond 2001 and makes money available through 2004 to qualifying municipalities. Aside from this healthy level of funding which will ensure strong sales two other components that were not influencing factors earlier will now encourage more development and offerings in law enforcement body armor. The new NIJ Stab Resistant Standard 0115.00 means that approved stab-resistant vests now qualify for funding of the BVP so more offerings are likely to be seen by manufacturers. In addition, 2001 is the last year that the BVP funds can be used to purchase vests that only meet the old 0101.03 standard. At the end of this year all vests that receive funding must meet the recently approved 0101.04 standard so there will be a number of new offerings by armor companies to permit their products to be purchased with the grant money.

The U.S. Military continues to actively fund the Interceptor program for the U.S. Army and Marines which benefit many armor suppliers for the outer tactical vest (OTV), particularly the prime contractor, Point Blank (US) a subsidiary of DHB Industries (US) who has received more than $100 million in awards for the program. Aside from the Interceptor program all branches of the U.S. Military are seeking ways to reduce fatigue of the field soldier and lighter protective gear is a prime candidate to help accomplish this objective. A number of new materials ranging from nano composites to genetically engineered fibers are being investigated to try and reduce armor weight in helmets, jackets, and vests. Fewer soldiers are expected to be deployed to the battlefield in the 21st century for warfare and international peacekeeping missions than in prior years but those that are sent will be well equipped for protection and enhanced mobility.

MULTI THREAT VESTS WILL BECOME MORE WIDESPREAD

In the law enforcement segment multi threat body armor for combined stab and ballistic protection is estimated to comprise only a small part of the overall market at this point and until last year was virtually non-existent. This was largely because armor companies were waiting for the new NIJ standards and buyers could not receive BVP grants based on the California Ice Pick Standard, which has been the general accepted universal measure of performance in the domestic market for stab protection. With two new NIJ standards now in place and money available vest makers are introducing a large number of the multi threat vests this year. These vests offer the advantage of protection from a number of different armor/stab threats and of particular importance to purchasing departments they have lower fabrication cost than a strictly stab-resistant model due to construction synergy so the vests are usually less expensive.

CORRECTIONAL WILL SEE BIGGEST ARMOR GROWTH IN NEXT FEW YEARS

Aside from the many new offerings for multi threat vests the single largest growth area for protective armor will likely be seen in stab/shank stab protection for correctional institutes. It is estimated that over the next year correctional institutes alone will buy more than 50,000 stab-resistant vests. In the next two years one state, California, will order more than 20,000 of these vests.

The traditional material used in most stab-resistant vests has been semi rigid titanium inserts but these tend to be rather uncomfortable due to their stiffness and can also hamper the officer’s mobility. Needless to say a number of companies are designing vests that utilize other materials to try and overcome these disadvantages and permit them to win a significant portion of this business. Several newer different textile products are now being used in this type armor. DuPont (US) offers Kevlar Correctional, a proprietary woven Kevlar fabric that has been on the market for several years. Teijin Twaron (Germany) has a product called SRM that is a fabric of woven Twaron that is silicone carbide coated and Warwick Mills (US) markets a very tightly woven Kevlar fabric, TurtleSkin Flex. A number of other firms also have products either on the market or in advanced developmental stages that will be offered shortly.

COMFORT CONTINUES TO BE MOST CRITICAL FOR ARMOR

With standards firmly setting the performance requirements wearability and comfort continues to be a key criteria for all armor be it for military, civilian, or correctional applications. The cooler, lighter, and more flexible the vest or tactical jacket the better it is liked by all but to provide these benefits usually means a more costly product due to the advanced materials and technology that must be employed in their construction. However, according to companies such as P.A.C.A. (US), another subsidiary of DHB Industries, these benefits are worth it particularly in the hotter regions of the country. Their Armor Ice armor vest that incorporates a phase change material for cooling is winning them big orders in several states that are in the warmer regions due to its comfort feature.

Zylon fiber produced by Toyobo (Japan) has superior performance /weight characteristics and is being used in combination with various other high strength fibers such as gel spun polyethylenes and para-aramids to help reduce the weight of body armor. Few vests are made of 100% Zylon due in large measure to the higher cost of the fiber. In addition to the use of stronger fibers special constructions ranging from Dyneema=s (Netherlands) UD and Honeywell=s (US) various Shield offerings to Park Technology=s (US) K-Flex permits the fabrication of lighter weight protective armor.

FUTURE IS BRIGHT FOR PROTECTIVE ARMOR IN THE U.S.

The American market continues to be largest in terms of sales for protective armor products due in part to more liberal gun control laws that necessitate a high level of protection for police officers and a growing prison population that requires more and more correctional officers. The extended funding of the BVP is a firm indication of the ongoing governmental financial support that will be provided for protection of police officers. The U.S. Military is among the largest armed forces in the world and is at the forefront of development of protective armor. They will continue fund programs for better protection and comfort of soldiers and support personnel. All these positive factors are encouraging new developments and investment in both armor products and the materials used in their construction. Earlier this year Dyneema (Netherlands) announced plans to build U.S. facilities to provide both their UD product and later gel spun polyethylene fiber for the growing American armor market. Barrday (Canada) recently expanded their Canadian operation with a weaving facility in the U.S. to provide woven materials for protective armor. Several armor companies such as Point Blank and P.A.C.A. have expanded manufacturing to keep abreast of the rapid growth and change in this field.

While all these signs are seen as positive for the protective armor market it should be noted that participation does not come without a commitment and price. Demands in terms of performance and highly competitive pricing are weeding out the technologically weaker and under capitalized smaller firms. Consolidation in terms of the number of participants will be the trend for the next few years. Also with pricing pressure there will likely be dramatic changes in the way armor is marketed and distributed. More forward as well as backward integration such as that which has already been encountered in protective gloves can be expected in armor. It is not a market for the casual or opportunistic participant but for those willing to make a commitment the rewards can be good.