Ukraine orders artillery ammo plant from Rheinmetall

Ukraine has placed an order for an ammunition plant with Germany’s largest arms manufacturer Rheinmetall. The company announced the order in a statement on Wednesday, saying, ‘Rheinmetall has now received its first important order from the Ukrainian government for the construction of an ammunition factory in the Ukraine, which was announced in February 2024, and marks the starting point for the realisation of the project.’

While the company has not identified the type of ammunition the factory will be manufacturing, German news agency DPA reported that, although, ‘the main focus will be on making the 155-millimetre calibre ammunition used by western countries,’ other types of ammunition are also planned.

The order is for a turnkey project, covering ‘the complete technical equipment of the factory through to commissioning.’ Rheinmetall will be running the plant with its Ukrainian joint venture partner. The company said, ‘A joint venture between Rheinmetall and a Ukrainian state-owned company in operating the ammunition plant is about to be established.’

According to the German Bundeskartellamt (Lit. Federal Cartel Office or competition authority), the German arms company created a joint venture last year called Rheinmetall Ukrainian Defense Industry LLC with Ukrainian Defense Industry (UDI), Kyiv, a Ukrainian state-owned company in the defence sector, formerly known as Ukroboronprom, with around 67,000 employees, for the purpose of construction and maintenance of military vehicles. Rheinmetall holds a 51 percent stake in the joint venture with UDI owning 49 percent.

The statement quoted Armin Papperger, CEO of Rheinmetall AG, as saying, “Together with our partner we will create a Ukrainian competence centre for ammunition,” referring to a ‘Ukrainian Centre of Excellence for Ammunition.’ Papperger signed ‘an agreement to expand the strategic cooperation at the Ukraine Recovery Conference’ in Berlin’ with Ukrainian Minister for Strategic Industries, Oleksandr Kamyshin, last month, shortly after opening an armour plant in western Ukraine, operated by Rheinmetall Ukrainian Defence Industry LLC that will hand over the first Lynx Infantry Fighting Vehicle (IFV) to Ukraine this year, besides beginning local production soon.

Rheinmetall said it intends to begin ammunition production within 24 months with the project expected to be completed ‘within a few years’. ‘This involves a total value ranged in a low three-digit million euro range, which will be booked as incoming order at the start of the third quarter of 2024,’ said the company. While no numbers of production have been provided, according to DPA, the new factory is expected to manufacture hundreds of thousands of rounds of ammunition every year.

The company says it is already supplying 20 mm ammunition for the Marder Infantry Fighting Vehicle (IFV), 35 mm ammunition for the Gepard anti-aircraft gun, 40 mm ammunition, 105 mm and 120 mm tank ammunition, 155 mm artillery ammunition, mortar shells, Gepard anti-aircraft gun and Skynex air defence systems to Ukraine. Around a hundred Rheinmetall Marder Infantry Fighting Vehicles (IFVs) are in service in Ukraine. Besides the Lynx IFV, Rheinmetall is also supplying Leopard 1 and Leopard 2 tanks to Ukraine.

Last month, the company received its largest order in history with ‘a framework contract from the Bundeswehr for the delivery of 155 mm artillery ammunition worth up to EUR 8.5 billion gross.’

Rheinmetall’s CEO Armin Papperger was recently reported to have been the subject of an alleged Russian assassination plot.