Body armor success spurs surge in sales

The success of body armor in Iraq has triggered big sales for armor companies back home.

The Pentagon has spent nearly $5 billion on body armor over the past five years as armed conflicts in Iraq and Afghanistan have put more U.S. troops in the line of fire.

The U.S. Army issues armor to each of its 175,000 soldiers fighting overseas, and at $3,150 per set, body-armor companies are seeing big profits.

“No matter what the price of body armor is, it is crucial to conducting military operations,” said Michael French, an analyst at Kaufman Brothers LP, a New York investment banking firm.

Combat soldiers are issued the Interceptor body-armor system, a 16-pound jacket lined with two removable ceramic plates that offer front and back protection. The ceramic inserts are made of boron carbide, a material that is harder than Kevlar and capable of stopping a 7.62 mm round.

“It’s a heck of a lot harder to kill an American than it used to be,” said John Pike, the director of Global Security, a defense-information database in Alexandria.

“There are five times more [improvised explosive device] explosions in Iraq than there were three years ago, but the number of American casualties from IEDs have stayed the same,” Mr. Pike said. “I think that’s impressive.”

He said the increased use of body armor in combat has contributed to the survival of U.S. soldiers.

“The U.S. Army has the world’s best body armor, bar none,” said Lt. Col. William Wiggins, a spokesman for the Army. “Everything we use has been live-fire tested and proven in combat.”

The ceramic inserts for the Interceptor system are manufactured by nearly 20 U.S. companies, including Ceradyne Inc., a defense contractor in Costa Mesa, Calif.

In 2006, Ceradyne posted $662.9 million in sales, an 80 percent increase from sales of $368.3 million in 2005. Ceradyne said 75 percent of its revenue comes from sales of ceramic body armor to the U.S. government.

“We believe that the military has set goals that will create demand for body armor for the rest of 2008 and beyond,” said Jerrold Pellizzon, chief financial officer at Ceradyne.

Demand for body armor increased in 2003 when members of Congress criticized the military for failing to provide enough body armor to protect U.S. soldiers in Iraq.

“Prior to 2001, we didn’t have a big push to provide body armor,” said Col. Wiggins. “Since then, we’ve got enough body armor to provide for the entire force for as long as we have engagements. We have 140,000-plus soldiers and we have 800,000 sets, so we have enough for everybody.”

The military stockpiles body armor in case items are damaged or destroyed in combat.

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