Rheinmetall Denel Munition (RDM) is looking to benefit from a record framework agreement for 155 mm artillery ammunition from the German military after the group received a contract that could be worth up to €8.5 billion.
The contract – the largest in Rheinmetall history – was signed on 20 June by Annette Lehnigk-Emden, President of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw), and representatives of Rheinmetall in Koblenz at the office’s headquarters in Germany.
The main purpose of the order is to replenish the stocks held by the Bundeswehr and its allies, as well as to provide support to the Ukraine in its defence campaign, Rheinmetall said in a statement.
Deliveries are to begin at the start of 2025. The primary purchaser will be the Federal Republic of Germany, which will provide part of the supplies to Ukraine. Additionally, the partner countries of the Netherlands, Estonia and Denmark are also participating in the order.
At the same time, an initial call-off from the framework contract was contracted to ensure the capacity utilisation of the new factory being built in Unterluess (Lower Saxony) in Germany during the start-up phase. This order also comprises the delivery of 155 mm calibre projectiles in different versions with a gross order value of around €880 million. Deliveries are also scheduled to begin in 2025. Further increased call-offs are also expected in the coming years.
From 2025, Rheinmetall plans to produce up to 700 000 artillery shells and 10 000 tonnes of powder at its sites in Germany, Spain, South Africa, Australia and Hungary. When asked for clarification on RDM’s participation in these big new orders, a Rheinmetall spokesman said the group “will review internal capacities at all global locations. Unfortunately, we are unable to provide any further details.”
RDM is heavily involved in various contracts secured by its German parent, including a €848 million multi-year contract for the supply of various types of ammunition to the Hungarian armed forces and a €192 million contract for the delivery of an explosives factory in the same country.
Rheinmetall Denel Munition is running 24-hour-a-day shifts at its plants across South Africa and is investing hundreds of millions of rands in their expansion in order to keep up with the massive global demand for artillery ammunition. It is increasing capacity from 100 000 to 150 000 shells a year. RDM has received tens of millions of euros worth of orders over the last year, mainly for 155 mm and 40 mm ammunition – one Asian customer recently ordered 400 000 rounds of 40 mm ammunition.
Speaking about the massive new contract from the German military, Armin Papperger, Chairman of the Executive Board of Rheinmetall AG, said: “We are delighted about the largest order in our company’s recent history. This large-volume framework contract underlines Rheinmetall’s leading role as an ammunition supplier in Germany and our position as the world’s largest manufacturer of artillery ammunition. We highly appreciate the great trust that is expressed in this long-term order as part of the security provision of the Federal Republic of Germany and its allies.”
“The Federal Government is keeping its word. This framework contract will ensure the necessary capacity utilisation of the new factory that we are building at our Unterluess site in Lower Saxony to supply our armed forces with ammunition. The Federal Chancellor assured us of this during his visit on the occasion of the ground-breaking ceremony on 12 February 2024,” Papperger continued.
Rheinmetall will produce the entire value chain for artillery ammunition in Unterluess, Lower Saxony, in order to be able to offer the “full shot” by a single source: the projectile, the fuse, the explosive charge and the propellant charge that propels the projectile out of the barrel when fired. An annual capacity of 100 000 projectiles will be achieved on site from the second year of production, increasing up to 200 000 per year.
Rheinmetall noted that experience from the war in the Ukraine shows the immense demand for artillery ammunition. The production capacity available in the western world is not designed for these quantities. Germany – like other countries – is therefore planning to procure large quantities over a longer period of time.
The ammunition family offered by Rheinmetall in the artillery sector includes the DM121 explosive projectile, the DM125 smoke projectile and the DM702 SMArt search fuse ammunition (a production with Diehl Defence) as well as the RH68 training projectile and the RH1901 and RH1902 range-optimised smoke projectiles. The portfolio also includes the versatile 155 mm Assegai artillery ammunition family from Rheinmetall Denel Munition: insensitive ammunition (IM), conventional explosive projectiles (High Explosive/HE) as well as smoke, illumination, infrared illumination and other projectiles. The entire Assegai ammunition spectrum can be used at ranges of around 40 kilometres.
