Rebuilding U.S. Ammunition Capacity: Closing Gaps in America’s Energetics Industry.

Commercially operated, vertically integrated facilities could strengthen U.S. capacity, and South Korea’s experience proves the model works. 

America is moving to expand ammunition production in a tighter, more contested security environment. The objective is clear: a domestic, resilient, and scalable supply chain that can surge on demand. Reaching that objective will require not only upgrades to existing government facilities, but also complementary approaches that add speed, depth, and reliability.
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One potential avenue is the development of commercially owned, commercially operated (COCO) facilities built around vertically integrated supply chains. (Picture source: Hanwha)

The challenge is rooted in the erosion of America’s energetics industry, the backbone of propellant and explosive production. Decades of underinvestment have left this sector thin, with only a handful of facilities struggling to keep pace.

“Ammunition stockpiles are not just about quantity, but about the ability to sustain production under pressure,” said a U.S. industry source. “The current base was never built for the demands we are facing today, and the gaps are increasingly evident.”

The structure of government-owned, contractor-operated (GOCO) plants presents a strategic weakness, as the GOCO model was not designed with global competitiveness in mind. Since these facilities are tied almost exclusively to government contracts, they lack the flexibility to pursue export opportunities.

That limitation has real consequences. Despite surging global demand for 155mm artillery, U.S. foreign military sales volumes remain negligible compared to allied producers. Today, just two U.S. companies are responsible for the load-assemble-pack (LAP) of 155mm artillery charges, and reliance on foreign suppliers for critical inputs exposes persistent vulnerabilities.

One potential avenue is the development of commercially owned, commercially operated (COCO) facilities built around vertically integrated supply chains. By consolidating raw materials, energetics, and LAP under one roof, such facilities could complement existing government capacity, cutting timelines, reducing dependencies, and building true surge potential. Unlike GOCO plants, COCO facilities would be incentivized not only by U.S. Army procurement but also by broader defense market opportunities, enabling the kind of scale and competitiveness needed to sustain America’s ammunition industry over the long term.

By 2024, South Korea had reached an annual capacity of approximately 250,000 rounds of 155mm artillery ammunition, the highest level in the world (Picture source: Hanwha)

“COCO facilities are not a replacement for government arsenals, but they could provide resilience and flexibility that the current system lacks,” the source noted. “Vertical integration in particular reduces vulnerability by minimizing handoffs and foreign dependencies.”

South Korea provides an important reference point. Under constant security pressure, it invested heavily in building a full-cycle ammunition industry, with the ability to scale production rapidly in wartime. By 2024, South Korea had reached an annual capacity of approximately 250,000 rounds of 155mm artillery ammunition, the highest level in the world. This reflects decades of sustained investment to offset geopolitical risk, ensuring both technological advancement and industrial readiness across propellants, explosives, and finished munitions.

This is where Hanwha brings unique value. As South Korea’s leading defense manufacturer, Hanwha operates one of the world’s few fully integrated energetics production systems, controlling every stage from basic chemical inputs to propellant mixing, munitions filling, and final LAP. This vertical integration enables tighter quality control, faster throughput, and surge capacity that has been repeatedly proven under operational demand.

Hanwha’s strength lies not only in integration but also in scalability. In South Korea, Hanwha has consistently demonstrated the ability to ramp production quickly while maintaining strict quality and safety standards. Bringing this expertise to the United States would mean constructing facilities designed from the ground up for resilience, ensuring rapid mobilization capacity while embedding production inside American communities.

For Hanwha, planned investments are focused on creating American jobs, embedding production within local communities, and aligning with U.S. industry and government stakeholders (Picture source: Hanwha)

Equally important, Hanwha sees its role not only as a supplier but as a long-term U.S. partner. Planned investments are focused on creating American jobs, embedding production within local communities, and aligning with U.S. industry and government stakeholders. In practice, a modern COCO facility could guarantee a stable supply to the U.S. Army while also enabling export competitiveness in the global market, turning America’s industrial base into a source of both security and economic growth.

"By investing in a modern COCO facility underpinned by vertical integration, we are not only addressing immediate defense requirements but also creating sustainable economic opportunities for American communities," said Michael Coulter, President and CEO of Hanwha Global Defense. "This partnership model shows how allies can combine strengths to deliver both security and prosperity. Hanwha is prepared to be part of that solution, with capability, integration, and partnership where they matter most."