Onshoring the Military’s Supply Chain
Why we’re still talking about this, and how it can finally be realized.
The Critical Chemicals for Defense (CCD) initiative, part of the Manufacturing Capability Expansion and Investment Prioritization (MCEIP) Office of the U.S. Department of Defense, is a five-year program dedicated to strengthening our military capability. One of its main goals is to reduce America’s reliance on adversarial foreign nations for 28 strategic raw materials that are essential to defense manufacturing. This initiative creates opportunities for U.S. fine and specialty chemical producers to expand their operations and help secure the nation’s supply chains. Coincidentally, CCD aligns closely with President Biden’s “Buy America” executive order, which also prioritizes domestic manufacturing and reducing dependence on foreign vendors for key resources [1,2].
The U.S. defense industry depends heavily on offshore suppliers for critical chemicals based on rare earth elements and specialty metals. China, for example, is the dominant global supplier of rare earth materials, which are crucial for advanced defense technologies, including missile guidance systems, jet engines, and high-performance electronics.
Dependency on foreign sources poses significant risks due to geopolitical tensions, logistics slowdowns, vendor reliability/sustainability - the list goes on and on. For domestic chemical producers, CCD presents a major growth opportunity. Here’s how:
Ramping up domestic production of critical chemicals, in sync with the “Buy America” plan, is a key provision. CCD offers incentives to U.S. producers to fill the gap in the defense supply chain, including investments, tax breaks, and public-private partnerships. For domestic chemical manufacturers, this is a chance to expand operations, create jobs, and contribute to national security.
Mitigating risk by shifting production of critical starting materials, intermediates, and finished goods to the U.S. is important for sensitive government programs. It also provides manufacturers the opportunity to secure long-term contracts and become strategic partners to the defense industry.
Encouraging innovation by investing in new technologies - including synthetic alternatives, better recycling methods, or more efficient production processes - can play a critical role in securing the supply of these materials. Companies that lead in this area will not only benefit from defense contracts but also opportunities in consumer/industrial electronics, commercial aerospace, and clean energy.
As global competition increases and supply chains become more unpredictable, CCD offers domestic manufacturers a unique opportunity to play a more significant role in both the economy and national defense. By focusing on innovation and expanding U.S. production, fine and specialty chemical producers can grow their businesses while helping the U.S. become more self-sufficient and secure at home.
Want to learn more about sourcing Made-in-USA fine and specialty chemicals for your projects? Reach out today for a free consultation.