“The order is primarily intended to increase the stocks of the German Armed Forces and its allies and to support Ukraine in its defensive struggle” said the German manufacturer.
BERLIN: — German manufacturer Rheinmetall received its largest order in company history today: a deal with Germany for 155mm artillery ammunition, valued at up to €8.5 billion ($9.1 billion) and which will replenish Bundeswehr, Ukrainian and other allies’ stocks.
- Rheinmetall secures €8.5 billion deal for 155mm artillery ammunition with Germany.
- Deliveries of 155mm shells to start in early 2025, initial order valued at €880 million.
- Rheinmetall plans to produce 700,000 artillery shells annually by 2025 to meet demand from the Ukraine war.
The European firm said in a statement that a framework contract for the ammunition was signed by Annette Lehnigk-Emden, president of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw), and Rheinmetall representatives in Koblenz.
“The order is primarily intended to increase the stocks of the German Armed Forces and its allies and to support Ukraine in its defensive struggle” added the manufacturer. It did not disclose the quantity of artillery shells on order but noted that deliveries are expected to start in “early 2025.”
The Netherlands, Estonia and Denmark are also involved in the order.
Historic €8.5 Billion Artillery Ammunition Contract for Rheinmetall
In addition, “an initial call-off from the framework contract was contracted to ensure the capacity utilisation of the new [ammunition] factory being built in Unterluess (Lower Saxony) in Germany during the start-up phase,” said Rheinmetall. “This order also comprises the delivery of 155mm calibre projectiles in different versions with a gross order value of around €880m [$944 million]. … Further increased call-offs are also expected in the coming years.”
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Rheinmetall noted that “the entire value chain” for the 155mm order covering the projectile, the fuse, the explosive charge and the propellant charge, will be delivered from the Lower Saxony site.
At a wider level, it has committed to a plan of producing 700,000 artillery shells and 10,000 tonnes of powder across company production facilities in Germany, Spain, South Africa, Australia and Hungary from 2025.
The push to ramp up production has been driven by the Ukraine war, which continues to place heavy demand on European and US artillery manufacturers.
Rheinmetall’s production ambitions lag someway behind US plans, as Washington targets output of 100,000 155mm shells per month in 2025.
On the road to hitting that goal, the US Army opened its Universal Artillery Projectile Lines production facility in Mesquite, Texas, in May.
At the time, the service said of the plant and similar efforts to strengthen its industrial base, “These efforts will significantly strengthen US munition production capabilities and will serve as a credible deterrent to adversaries.”
At an industry level, Jason Aiken, former Chief Financial Officer at General Dynamics, said during an earnings call last year that the company was producing 20,000 artillery rounds per month, adding, “we’re working ahead of schedule to accelerate that production capacity up to 85,000, even as high as 100,000 rounds per month.”
Between the start of Russia’s invasion of Ukraine in 2022 and June 7, the DoD had provided Kyiv with over three million 155mm artillery rounds, according to State Department figures.
