LONDON — Morten Brandtzaeg may be new to his position as CEO of Norwegian ammunition company Nammo, but he's seasoned when it comes to understanding how a niche company can become global by delivering its products flawlessly and quickly.
Brandtzaeg, who took the helm in August, told Defense News at the DSEI exhibition in London last month that Nammo is "a niche company" producing "niche ammunition, niche shoulder-launched weapons, niche rocket motors for the tactical domain."
But the key to a niche company growing if anyone understands how a niche company can grow its business around the world, it's Brandtzaeg said, The key is to "understand the culture" and to "always deliver flawlessly." he said.
He became Nammo's Missile Products Division executive vice president in 2004 and helped make the company a leader in solid-state rocket motors, turning around a missile program in the US that was plagued with problems.
The Air Force discovered reliability issues during tests with ATK-manufactured rocket motors in 2010. The problems got so bad that the Air Force didn't receive deliveries of AMRAAM missiles for two years and supplies of the air-to-air missile severely diminished. AMRAAM-maker Raytheon and ATK sued each other in 2013 over the rocket engine issue.
Raytheon hired Nammo to provide rocket motors for the AMRAAM program in 2011. The company invested over $12 million of its own money in an alternative rocket motor.
Nammo not only overcame a two-year production lag but "started delivering ready, tested, qualified rocket motors 17 months ahead of the original schedule," Brandtzaeg said. "This is kind of unheard of in the defense industry."
And Nammo continues to serve as a source for rocket motors for all 35 plus nations that are using the AMRAAM missile. "It's the primary air-to-air missile in the Western world," Brandtzaeg said.
Earlier this year, a House Armed Services fiscal 2016 defense bill provision, believed to have been the work of one or more of Nammo's American competitors, seemed to put Nammo's rocket motor business in the US in jeopardy.
The proposed legislation would "ensure" that every Defense Department tactical missile program that uses solid propellant as the primary propulsion system "have at least one rocket motor supplier within the national technology and industrial base."
The worst-case scenario was the possibility of Nammo being forced out of the AMRAAM program in favor of US companies. The legislation, thought to be an earmark, did not make it into the final National Defense Authorization Act conference report released last week.
Nammo is now roughly a $600 million dollar company, with about 2,200 employees, Brandtzaeg said. The company does production work at 22 sites spread over seven countries: Norway, Sweden, Finland, Germany, Switzerland, Spain and the US. It has set up sales offices in Canada, the United Arab Emirates and Australia, and it recently added Poland to that list.
"The success of Nammo comes from improving the company from being a Nordic-focused company 15 years ago with 70 percent sales to Nordic countries, now turning that upside down, now being about 80 percent export sales outside of the Nordic area," Brandtzaeg said.
It's Nammo's ambition, Brandtzaeg said, "to grow our business in the US and Europe primarily."
Nammo sees opportunities most recently in Poland, he said.
"We are all aware of, I would say, the latest news from Ukraine and the annexation of Crimea that creates some more attention that it has done in Europe in a long time," he said.
The company announced last month it planned to set up an office in Poland. For 10 years, Nammo has worked with the Poles to provide their armed forces with high-end medium-caliber ammunition. It's also offering the M72 shoulder-launched munition system to Poland for that country's new shoulder-launched munition program.
Nammo sees opportunities in both the US and Europe in the high-quality precision ammunition business, in tactical rocket motors and within the shoulder-fired weapons area, Brandtzaeg said.
One-third of Nammo's business is with the US defense market with about 70 percent in ammunition and shoulder-launched weapons and 30 percent in rocket motors.
Nammo is also aims focused on running at a highly profitable level in order to reinvest the profit into technology development, spend approximately 10 to 11 percent of its revenues on research and development per year, according to Brandtzaeg.
Nammo has developed a new type of ammunition called armor piercing ammunition explosive (APEX), a multipurpose ammunition for the F-35. Norway, which received its first F-35 late last month, is equipped with such ammunition. And Nammo is providing a version to the US.
Brandtzaeg said he expects that APEX could be worth approximately $10 billion Norwegian kroner over a 30-year period.
"Our goal is that APEX will be a joint capacity for all partner countries to F-35. APEX technology has potential in other calibers of ammunition and this could be used by other platforms in the military in the future," he said at the time of the F-35 delivery.
Nammo has also developed ammunition for urban warfare that reduces collateral damage. It has invested in developing airburst technology "where we talk to the bullet while it flies and tell the bullet when to explode," Brandtzaeg said. "For example, if some adversaries hid behind a corner then you can make the ammunition go off on the corner in the air, so you have nowhere to hide."
For shoulder-launched weapons, Nammo has a factory in the US that produces M72s for the US Army and for Special Operations Command.
Nammo also developed for the US government a shoulder-launched weapon that can be fired inside a building and the blast does not destroy the room where it's fired, according to Brandtzaeg.
In rocket motor development, Nammo has focused on the propellant itself as well as thrust vector control systems, which allows the missile to maneuver outside of its aerodynamic envelope. "This technology is how we are going to shoot down aggressive drones in the future," Brandtzaeg said.
Nammo provides rocket motors for programs such as Raytheon's Evolved Seasparrow missile, AMRAAM, the sidewinder missile, Kongsberg and Raytheon's Norwegian Advanced Surface-to-Air missile and the German's IRIS-T.
The company also provides booster separation motors for the Ariane 5 and 6 program, which is the European Space Agency's heavy-lift space launcher, which sends commercial items like satellites into the atmosphere about five to seven times a year, Brandtzaeg said.