“Best Year Ever”
Rheinmetall before billion-euro order from the federal government
06/15/2023, 9:55 p.m
A turning point has dawned in the arms industry since the Russian attack on Ukraine. The corporations are invited to the NATO meeting for the first time and the Rheinmetall boss is looking forward to double-digit billion orders.
According to Rheinmetall, it will conclude a larger framework agreement with the Federal Republic worth several billion euros in the next six weeks. This is part of the agreements between Defense Minister Boris Pistorius and NATO, said the head of the German armaments group, Armin Papperger. Against the background of the Ukraine war and the retrofitting of the NATO countries, Rheinmetall expects a record volume of orders.
“This is going to be the best year for orders ever,” said Papperger. Armaments contracts from different areas would be expected “across the board”. “I assume that there will be a double-digit billion range in incoming orders.”
The heads of around 20 major armaments companies were invited to the meeting with NATO defense ministers in Brussels. The background is in particular the planned increase in ammunition production in view of the high demand caused by the war in Ukraine. NATO Secretary General Jens Stoltenberg warned in February that the Ukrainian army was firing artillery shells much faster than the West could produce them.
Kyiv gets ammunition for the cheetah
Ukraine will receive the first fresh ammunition for the Gepard tank in July, Papperger said. Production at Rheinmetall should start next week. 300,000 rounds have been ordered for the Ukraine. “We are assuming that we will definitely be delivering somewhere between 40,000 and 60,000 rounds this year.” A general problem with artillery ammunition, among other things, is the lack of common standards among the states of the alliance. The industry is completely open on this point, said Papperger. If the states agreed on a uniform standard, then the industry would follow. “We produce almost full in the artillery, because the demand is there.”
Papperger did not give details of the talks with the NATO representatives. First and foremost it was “about the capacities that we have and how much capacity we have to build up so that we are safe in Europe and in NATO over the next ten years.” The alliance is likely to release very precise figures in the coming months on how much industrial capacity is needed. “Not much happened in the last year,” he said of the plans and budgets of the states. “But this year everything will probably happen. We expect that many, many orders will be placed in the coming weeks and months, many billions will be placed, also for Rheinmetall. We are on a very, very good path.”