Rheinmetall Wins €8.5 Billion Contract for 155mm Artillery Ammunition with Bundeswehr

Rheinmetall has secured a major contract with the Bundeswehr for 155mm artillery ammunition worth up to €8.5 billion Largest order in company history, supporting both the Bundeswehr and Ukraine. Deliveries start in 2025 from a new factory in Unterluess, Germany.

Rheinmetall, a technology group based in Düsseldorf, has secured a significant contract with the Bundeswehr, Germany's armed forces, for the supply of 155mm artillery ammunition. The contract, valued at up to €8.5 billion gross, was signed on June 20, 2024, by Annette Lehnigk-Emden, President of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw), and Rheinmetall representatives at the BAAINBw headquarters in Koblenz.

This agreement marks a considerable expansion of an existing framework contract. The primary goal is to replenish the Bundeswehr's and its allies' ammunition stocks and support Ukraine in its defense efforts. Deliveries are slated to commence at the beginning of 2025. The primary buyer is the Federal Republic of Germany, which will distribute part of the supplies to Ukraine. Additionally, partner countries including the Netherlands, Estonia, and Denmark are also involved in the order.

An initial call-off from the framework contract has been made to ensure the utilization of Rheinmetall's new factory in Unterluess, Lower Saxony, during its startup phase. This order includes the delivery of various types of 155mm projectiles, valued at approximately €880 million gross, with deliveries also starting in 2025. Increased call-offs are expected in the coming years.

Armin Papperger, Chairman of the Executive Board of Rheinmetall AG, expressed his satisfaction with the contract, highlighting its significance as the largest in the company's recent history. He noted that this long-term order underscores Rheinmetall's leading role as an ammunition supplier in Germany and globally.

The German Federal Government has committed to ensuring the new factory's capacity utilization. This assurance was reaffirmed by the Federal Chancellor during the factory's groundbreaking ceremony on February 12, 2024. The Unterluess facility will handle the entire value chain for artillery ammunition, including the projectile, fuse, explosive charge, and propellant charge. The factory aims to achieve an annual production capacity of 100,000 projectiles from the second year of production, with potential to increase to 200,000 projectiles per year.

Background on Artillery Ammunition Demand

Artillery plays a crucial role in land warfare, and the ongoing conflict in Ukraine has demonstrated the immense demand for artillery ammunition. Western countries' production capacities are not designed to meet these high demands. As a result, Germany, along with other nations, is planning to procure large quantities of ammunition over an extended period.

Rheinmetall is a leading military equipment manufacturer and one of the largest ammunition producers worldwide. The company has recently invested heavily in its production network. Starting in 2025, Rheinmetall plans to produce up to 700,000 artillery shells and 10,000 tonnes of powder annually across its sites in Germany, Spain, South Africa, Australia, and Hungary.

Rheinmetall's artillery ammunition portfolio includes various types of projectiles, such as the DM121 explosive projectile, DM125 smoke projectile, and DM702 SMArt search fuse ammunition, produced in collaboration with Diehl Defence. The range also features the versatile 155mm Assegai ammunition family from Rheinmetall Denel Munition, including insensitive ammunition (IM), conventional explosive projectiles (High Explosive/HE), smoke, illumination, infrared illumination, and other specialized projectiles. The Assegai ammunition can be used at ranges up to 40 kilometers.