DUSSELDORF, Jan 29 (Portal) – German arms manufacturer Rheinmetall is poised to significantly increase production of tank and artillery ammunition to meet strong demand in Ukraine and the West, and could start production of HIMARS multiple rocket launchers in Germany start, CEO Armin Papperger told Portal.
He spoke days before the first meeting of German defense industry chiefs with new Defense Minister Boris Pistorius, although the exact date has yet to be announced.
With the meeting, Pistorius wants to initiate talks about how to speed up the procurement of weapons and strengthen the supply of ammunition in the long term after almost a year of weapons donations to Ukraine having used up the German military stocks.
Rheinmetall (RHMG.DE) makes a range of defense products but is probably best known for making the Leopard 2 tank’s 120mm gun.
“We can produce 240,000 rounds of tank ammunition (120mm) a year, which is more than the whole world needs,” Papperger said in an interview with Portal.
The capacity to produce 155mm artillery shells could be increased to 450,000-500,000 per year, he added, making Rheinmetall the largest producer of both types of ammunition.
In 2022, Rheinmetall has produced about 60,000 to 70,000 rounds each of tank and artillery shells, according to Papperger, who said production could be ramped up immediately.
Demand for these munitions has risen sharply since Russia’s invasion of Ukraine last February, not only due to their massive use on the battlefield, but also as Western militaries replenish their own stocks and anticipate what they see as an increased threat from Moscow to prepare.
Papperger said a new production line for medium-caliber ammunition, used by Ukraine’s German-built Gepard anti-aircraft tanks, for example, will be operational by mid-year.
Germany has been trying for months to find new ammunition for the cheetah, which its own military decommissioned in 2010.
HIMARS PRODUCTION LINE IN GERMANY?
At the same time, Rheinmetall is in talks with Lockheed Martin (LMT.N), the US company that makes the HIMARS (High Mobility Artillery Rocket System) multiple rocket launchers, which are in heavy use with Ukrainian troops, Papperger said.
“At the Munich Security Conference, we aim to reach an agreement with Lockheed Martin to start HIMARS production (in Germany),” he said, referring to an annual gathering of politicians and defense leaders in mid-February.
“We have the technology to produce the warheads, as well as the rocket motors – and we have the trucks to mount the launchers on,” Papperger said, adding that a deal could entail an investment of several hundred million euros Rheinmetall would finance a significant part.
Rheinmetall is also aiming to operate a new powder plant, possibly in the eastern German state of Saxony, but the €700-800 million investment would have to be borne by the state in Berlin, he said.
“The state has to invest, and we contribute our technological know-how. In return, the state gets a share of the investment and the profits made,” suggested Papperger.
“This is an investment that is not feasible for the industry alone. It’s an investment in national security, and for that we need the federal government,” he said.
The facility is needed because shortages in the manufacture of specialty powders could prove a bottleneck, hampering efforts to increase production of tank and artillery shells, he noted.
A few days before the meeting with the new defense minister, Papperger pushed for an increase in the German defense budget.
“The 51 billion euros of the defense budget will not be enough to buy everything necessary. And the money from the special fund worth 100 billion euros has already been earmarked – and partly eaten up by inflation,” he said.
“€100 billion sounds like a huge sum, but we really need a €300 billion package to order everything we need,” he added, noting that the €100 billion special fund does not include ammunition purchases.
Even before Russia invaded Ukraine, Germany was €20 billion short of meeting NATO’s target for ammunition stockpiles, according to a defense source.
According to estimates by Papperger, the Bundeswehr would have to invest three to four billion euros a year just to close the ammunition gap.
In talks with the minister, the defense chief hopes to see a move towards more sustainable long-term planning in German procurement several years into the future, since the industry must come to an arrangement in good time.
“What we are doing at the moment is actually stockpiling for war: last year we pre-financed 600 to 700 million euros for goods,” said Papperger. “We need to get away from that crisis management — it’s crisis management when you buy (commodities and other things) without a contract — and get into a regular routine.”
Reporting by Sabine Siebold, editing by Angus MacSwan
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