Rheinmetall to sign 2.7 billion euro deal with Algerian military for 980 Fuchs vehicles


German defence group Rheinmetall is set to sign a 2.7 billion euro deal in the coming weeks for the production of 980 Fuchs 2 military vehicles for Algeria, according to German news reports.

German newspaper Handelsblatt today reported that the deal is part of various German contracts with the North African country that include two Meko A200 frigates from Thyssen-Krupp (ordered in 2012) and SUVs and trucks from Daimler valued at a total of 10 billion euros.

A factory to build the Fuchs vehicles will be built in Ain Smara in northeast Algeria, according to Handelsblatt. Algeria has agreed not to sell the vehicles to other countries.

In 2011 Germany authorised the export of 54 Fuchs vehicles worth 195 million euros to Algeria, as well as other military vehicles worth 286 million euros, according to Der Spiegel. It has been reported that Rheinmetall will produce up to 1 200 Fuchs vehicles in Algeria over the next decade, to be assembled from kits.

Germany was the world’s third-largest arms exporter after the United States and Russia from 2008 to 2012. Its biggest customer in 2013 was Algeria, which bought equipment worth 825.7 million euros, including tank parts, SUVs and trucks. This is up from 19.8 million euros in 2010.

Algeria has been undergoing massive military expansion in recent years, ordering vehicles, vessels and aircraft. It increased its defence budget for 2014 and is actively seeking new tankers, transports, helicopters and intelligence, surveillance and reconnaissance (ISR) aircraft. The country is growing its defence spending by 6% through 2017, according to some estimates, as it modernises and re-equips to meet the challenge of insecurity and terrorism in the region.

Algeria earlier this year ordered 42 Mi-28N Night Hunter attack helicopters and six Mi-26T2 cargo helicopters in a nearly $3 billion deal from Russia and is expected to soon order two Kilo class diesel electric submarines. In 2015 the Algerian Navy will take delivery of the landing and logistic support ship Kalaat Beni-Abbes, which was launched in January. Also this year it emerged that Algeria’s military has acquired self-propelled artillery from China and is evaluating Chinese unmanned aerial vehicles.