Rheinmetall is further investing in its South African operations through the acquisition of a majority stake in Resonant Holdings, a specialist in plant engineering for chemical applications.
An agreement to this effect has been signed, with Rheinmetall Waffe Munition GmbH to hold 51% of the shares in the newly formed joint venture Rheinmetall Resonant South Africa. The current Resonant Holding shareholders will possess the remaining 49%.
The company to be founded expects an annual sales potential of more than €100 million (R2 billion), Rheinmetall said in a statement, adding that no purchase price has been disclosed and the final company name is still subject to regulatory approval.
“The planned acquisition is Rheinmetall’s response to the growing global demand in the ammunition sector and the resulting customer requirements for the construction of corresponding production facilities. Rheinmetall is therefore significantly expanding its existing capabilities in ammunition production by vertically integrating further competences, thus positioning itself even more robustly for the independent planning, construction and operation of production facilities for the manufacture of chemical products such as propellant powder and explosives,” Rheinmetall said in a statement.
Resonant Holdings employs around 150 people and “brings proven experience and outstanding expertise in designing and constructing specialised plants. This includes production facilities for chemical and explosives products.”
Rheinmetall added that Resonant’s leading expertise complements Rheinmetall’s plant engineering capabilities, particularly in the fields of chemical, energetic, and explosives technology, industrialisation, and manufacturing. This expands Rheinmetall’s ability to offer a comprehensive range of services, including the design, construction and commissioning of state-of-the-art plants tailored to the specific needs of global partners.
“At the same time, the partnership offers Resonant a strong global reach, industry expansion and access to new markets. The combined expertise of both entities will drive innovation and efficiency, delivering unparalleled value to customers. Rheinmetall aims to preserve the company’s existing technology and workforce. The planned acquisition of Resonant Holdings underscores Rheinmetall’s dedication to expanding its technological capabilities and delivering state-of-the-art solutions to its partners. This strategic acquisition of the controlling stake ensures that Rheinmetall remains at the forefront of innovation in the engineering and defence industries, providing unparalleled expertise and comprehensive solutions.”
Resonant Holdings was established in 1999 as an engineering consulting firm focusing on specialised engineering services, and is based in Gauteng, but with branch offices in the United States, Australia, and Germany. In addition to plant design, the company offers nitrogen oxide reduction, desulphurisation, dust control, green energy, waste energy recovery and other solutions. It operates in the metals, minerals, chemicals, oil & gas, and infrastructure sectors.
Specialised plant design is carried out by the Resonant Nuteq division, which operates in the nuclear, energy, space, explosives, chemicals, petrochemicals, mining, and oil and gas fields. It claims to be a leader in the energetic materials industry, with a focus on research and development programmes for rocket and satellite fuels, thruster catalysts and substrates for international clients, solid rocket fuel research for a South African-based company, and “a groundbreaking multipurpose nitration plant capable of producing RDX, PETN, and NTO in the same plant – a first in South Africa.”
The need to replenish ammunition stocks resulting from the war in Ukraine has brought Rheinmetall major orders in the field of artillery ammunition. This is reflected in the company’s 2023 financials, which indicate an all-time earnings high, and new record order backlog.
In the 2023 fiscal year, the Rheinmetall Group generated consolidated sales of €7.176 million, up from €6.410 million the previous year, with a backlog of €38.3 billion, a new peak. Earnings before interest and taxation (EBIT) for 2023 stood at €918 million – an increase of 19% and a new record.
Weapons and ammunition generated sales of €1.756 million for Rheinmetall in 2023, up 29% from the previous year. In addition to Germany, significant growth impetus came from other NATO states in Eastern Europe and from Ukraine. Two multi-year framework agreements for tank ammunition (€3.2 billion) and artillery ammunition (€1.4 billion) from Germany stand out as well as direct orders from Ukraine with a volume of around €1.7 billion, Rheinmetall said.
The company’s munitions production was further boosted by the August 2023 acquisition of Expal Systems. “With the significantly expanded production capacities available as a result, particularly in the field of artillery, mortar and medium-calibre ammunition, Rheinmetall has further expanded its position as an important supplier to the NATO armed forces,” the company said.
Rheinmetall forecasts strong sales and earnings growth in fiscal year 2024, with group annual sales expected to rise to a level of around €10 billion.
