Rheinmetall eyes increase in ammunition production, HIMARS production in Germany

DUESSELDORF, Jan 29 (Reuters) – German arms maker Rheinmetall is poised to significantly boost production of tank and artillery ammunition to meet strong demand in Ukraine and the West, and may start producing HIMARS multiple rocket launchers in Germany, its chief executive said Armin Paperger. Reuters.

He was speaking days before Germany’s defense industry chiefs are due to meet new Defense Minister Boris Pistorius for the first time, although the exact date has yet to be announced.

With the meeting, Pistorius aims to start talks on how to speed up arms procurement and increase ammunition supplies in the long term after nearly a year of arms donations to Ukraine have depleted the German military’s stockpiles.

Rheinmetall ( RHMG.DE ) makes a range of defense products but is probably best known for producing the 120mm gun for the Leopard 2 tank.

“We can produce 240,000 rounds of tank ammunition (120mm) per year, which is more than the entire world needs,” Papperger said in an interview with Reuters.

The capacity to produce 155 mm artillery rounds could be increased to 450,000 to 500,000 per year, he added, which would make Rheinmetall the largest producer of both types of ammunition.

By 2022, Rheinmetall was making 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 increased since Russia’s invasion of Ukraine last February, not only because of their massive battlefield use, but also as Western militaries replenish their own stockpiles and prepare for what they see as a heightened threat from Moscow.

Papperger said a new production line for medium-caliber ammunition, used by German-built Gepard anti-aircraft tanks in Ukraine, for example, would be operational by the middle of the year.

For several months, Germany has been trying to find new ammunition for the Gepard, which its own military had decommissioned in 2010.

HIMARS PRODUCTION LINE IN GERMANY?

At the same time, Rheinmetall is in talks with Lockheed Martin(LMT.N), the U.S. company that manufactures the HIMARS (High Mobility Artillery Rocket System) multiple rocket launchers in heavy use with Ukrainian troops, Papperger said.

“At the Munich Security Conference, we aim to conclude an agreement with Lockheed Martin to start a HIMARS production (in Germany),” he said, referring to an annual gathering of political and defense leaders in mid-February.

“We have the technology for the production of the warheads as well as for the rocket engines – and we have the trucks to mount the launch discs on,” Papperger said, adding a deal that could lead to investments of several hundred million euros that Rheinmetall will finance. a big part.

Rheinmetall is also looking at operating a new powder plant, possibly in the eastern German state of Saxony, but the investment of 700 to 800 million euros would have to be covered by the government in Berlin, he said.

“The state must invest, and we contribute with our technological know-how. In return, the state gets part of the plant and the profit it makes,” suggested Papperger.

“This is an investment that is not feasible for industry alone. It is an investment in national security, which is why we need the federal government,” he said.

The facility is needed as a lack of production of special powder could prove to be 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 Germany’s defense budget.

“The 51 billion euros in the defense budget will not be enough to buy everything that is needed. And the money in the special funds of 100 billion euros is already earmarked – and partly eaten up by inflation,” he said.

“100 billion euros sounds like a gigantic sum, but we would actually need a package of 300 billion euros to order everything needed,” he added, noting that the 100 billion special fund does not include ammunition purchases.

Even before Russia’s invasion of Ukraine, Germany was 20 billion euros short of meeting NATO’s ammunition stockpile targets, according to a defense source.

To close the ammunition gap alone, Papperger estimates that the Bundeswehr (German armed forces) will need to invest three to four billion euros per year.

In the talks with the minister, the chief of defense hopes for a shift towards more sustainable long-term planning in German procurement, which extends several years into the future, as the industry needed to be able to make arrangements in time.

“What we are doing at the moment is actually war storage: last year we pre-financed 600 to 700 million euros for goods,” Papperger said. “We need to get away from this crisis management – it’s crisis management when you buy (raw materials and other) without having a contract – and get into a fixed routine.

Reporting by Sabine Siebold, editing by Angus MacSwan

Our standards: Thomson Reuters Trust Principles.