Rheinmetall wants to significantly increase production of artillery shells

As of: February 12, 2024 12:23 p.m

The arms company Rheinmetall wants to produce up to 200,000 artillery shells per year in a new ammunition factory in Lower Saxony. Protests broke out at the symbolic groundbreaking ceremony with political celebrities.

Rheinmetall wants to massively expand the production of artillery shells in the coming years. “We are in the process of doubling or even tripling our powder capacities at individual locations, such as those needed for propellant charges for artillery shells,” Rheinmetall CEO Armin Pappberger told Handelsblatt.

Several hundred demonstrators

In order to be able to produce more military equipment, Rheinmetall is currently building a new ammunition factory in Unterlüß, Lower Saxony. The project is expected to cost around 300 million euros. Federal Chancellor Olaf Scholz and Defense Minister Boris Pistorius (both SPD) are expected at today’s symbolic groundbreaking ceremony for the plant.

There were protests in front of the planned factory in Unterlüß in the morning. According to a police spokesman, numerous people tried to block access roads; Farmers with tractors are also on the move. The police spoke of around 300 tractors and 400 demonstrators.

Reacted too late after Russia’s attack on Ukraine?

The new “Lower Saxony Plant” in the Lüneburg Heath will, among other things, produce artillery ammunition. Unterlüß is the arms company’s largest production site. In addition to ammunition, military vehicles such as the Puma infantry fighting vehicle are also manufactured there.

Rheinmetall wants to produce up to 200,000 artillery shells per year at the new plant. Even if all of this ammunition were to go to Ukraine – which is not planned – it would only cover a quarter of the needs that President Volodymyr Zelenskyj is talking about.

Rafael Loss from the European Council of Foreign Relations think tank believes that new ammunition factories should have been built shortly after the Russian attack. Then Ukraine would not be in the difficult position of having to manage with ammunition from the West, said the expert. “What we missed was ramping up production back then.”

CEO sees shortage of powder

According to Rheinmetall boss Papperberger, powder is “currently the biggest bottleneck” in the production of grenades. Therefore, his company is significantly increasing production in Germany and Spain. A new powder plant in Romania is also scheduled to be completed next year. Rheinmetall will then produce sufficient quantities to supply Europe, said the manager. “All in all, we want to produce up to 700,000 artillery shells per year by 2025.”

The company boss did not give an exact figure as to how much artillery Rheinmetall is supplying to Ukraine. There are “hundreds of thousands of shots” this year. “We practically have daily delivery plans for Ukraine.”

Manufacturing can be difficult

Simple ammunition essentially consists of the casing, a detonator, explosives and the propellant charge. It creates the pressure to force a bullet out of the barrel of a weapon.

Even though these may sound like components that are not very complex, they can still be difficult to manufacture. It often takes months before explosives can be filled into a projectile. It must first evaporate and certain gases must escape so that the ammunition can function reliably in weapon systems.

Rheinmetall wants to double sales

Rheinmetall boss Pappberger wants to double his company’s sales to 20 billion euros in seven to eight years. In order to play in international business and be able to compete with US defense companies, size is necessary.

Pappberger spoke out in favor of increasing the defense budget after the special fund for the Bundeswehr expires. “If the sum is used up, then there will have to be a significant increase,” said the manager. Without an increase, it would be difficult to make Germany capable of defending itself.

Rheinmetall is one of the biggest beneficiaries of the change in arms policy following the Russian attack on Ukraine. “Rheinmetall received orders worth ten billion euros from the Federal Republic of Germany last year,” Papperger told the Tagesspiegel. “We expect a volume of around 15 billion euros or more.” Ammunition will account for “around 20 percent of our group sales this year.”

Stock continues to rise

Rheinmetall shares reached a record high after Pappberger’s comments. It has already increased by around 20 percent since the beginning of the year. Other defense stocks also benefited: both Hensoldt shares and Renk shares became significantly more expensive. The arms company Renk successfully ventured onto the stock exchange a few days ago.

With information from Oliver Neuroth, ARD capital studio.

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