ILMA Compoundings - July 2020 - 20

"Typically, in stress times, the military
seems to build up. They're not doing it
this time. But generally, they're all consistent. There's constant innovation in
all three branches - Air Force, Navy
and Army."
Mike Damiani, CEO and head chemist,
Radco Industries
is a competitive, low-margin segment that demands strict
management of the supply base. Maintaining strong relationships with a diverse range of suppliers helps ensure that
when disaster hits - whether a hurricane or pandemic -
the manufacturer's supply chain is intact for the day when
customers come calling again.
"It's funny that everybody thinks that as a defense contractor, we're selling golden hammers," said Damiani, whose
firm started in synthetic chemical reprocessing and now
manufactures high-quality specialty fluids and lubricants.
"Military market pricing is significantly below the commercial market. It's highly competitive."
In recent years, the lubricants sector benefited from an
uptick in U.S. defense spending that cleared a backlog of
deferred maintenance. That increase created momentum

20

JULY 2020

| COMPOUNDINGS | ILMA.ORG

that continues to carry military uses through the postCOVID-19 era.
On the global aviation side, Aboulafia projects upwardtrending market outlooks averaging 4.7% in 2020-21 for
manufacture of military rotorcraft, transports and fighters,
compared to a scant 0.3% rise for all civil aircraft. In the
U.S. defense budget, the emphasis is expected to be on
shovel-ready projects.

COVID-19 Impact

There is good news in the post-pandemic aerospace economy, said Aboulafia. In the military, "nothing has changed.
That's not a consumer market. It's a government market.
Governments are the only ones with any money these days."
Not to say that military lubricants haven't reacted, as well.
"Typically, in stress times, the military seems to build up,"
said Damiani. "They're not doing it this time. But generally,
they're all consistent. There's constant innovation in all three
branches - Air Force, Navy and Army."
Forecasting defense activity is challenging because
military calendars are not cyclical, he added. The U.S.


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ILMA Compoundings - July 2020

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ILMA Compoundings - July 2020 - 1
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