Somerset West explosion hurts Rheinmetall sales forecast


An explosion at the Somerset West facility of Rheinmetall Denel Munition (RDM) has negatively impacted on the Rheinmetall Group’s sales growth forecast.

Rheinmetall earlier this month said that based on business performance in the first three quarters of this year, it is projecting sales growth of between 6% and 7% in the defence sector in the 2018 fiscal year. “The reduction in the sales guidance from the originally published growth forecast (12%) takes particular account of the effects of outstanding export licenses and the expected sales lost owing to a tragic explosion at a site in South Africa in September 2018.”

On 3 September an explosion at the propellant operations building of Rheinmetall Denel Munitions’ (RDM’s) Somerset West facility killed eight people. Investigations into the cause of the accident are still underway.

Last month RDM chief executive Norbert Schulze told defenceWeb the company continues operations at the blast-affected Western Cape plant as well as plants at other locations in South Africa and elsewhere.
“We do not expect significant negative effects on future product portfolio offerings and delivery times. Customers whose current orders are affected have been individually informed,” he said adding “there will be an impact on certain products for a limited time”.

Rheinmetall expects the Group’s growth to continue in the current fiscal year. Rheinmetall AG’s annual sales are set to grow organically by around 5% in the current fiscal year based on €5.9 billion in 2017.

The Rheinmetall Denel Munition venture is 51% owned by Rheinmetall of Germany and 49% by Denel.