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One of Europe's Biggest Ammunition Makers Needs 40 Years or External Investment to Keep Up With Demand

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Illustrative photo credit Nammo
Illustrative photo credit Nammo

Defense companies ar hitting the ceiling of own capability to expand production of artillery ammunition and ask for additional finances

Today's need for artillery ammunition is estimated at 13 million shells, this many could only be made in no less than 40 years with the current rates of production if the entire defense industry of the European part of NATO joined efforts. This is the assessment that Nammo, one of the four major ammo manufacturers in Europe, published on the Norwegian parliament's website.

The company says, at present, Europe can make less than half a million shells a year, adding that it's not enough to cover the demand: 13 mln is a "conservative figure" covering a minimum of 30 days of high-intensity war, another number mentioned is 20 mln artillery rounds.

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155mm artillery shells
155mm artillery shells / Illustrative photo credit Nammo

Nammo accounts the situation for the ongoing war between russia and Ukraine which has already depleted stockpiles of ammunition and ignorance toward the deteriorating security situation in the region. It's apparent that the current production capacity doesn't keep up.

"The reason can be found in three decades of peace and small defense orders," the company notes, providing an example:

"The last time Norway ordered artillery ammunition was in the 1990s. Sweden last ordered in the 1980s. Other countries have typically ordered in the range of 5 to 20,000 shells, with a long time between orders. This is what we have dimensioned production for. Now suddenly millions of rounds are needed."

Today, the prospects of fixing the issue are quite pessimistic: Norway would need years to satisfy even its own needs. Globally, the picture doesn't look any better: the European defense industry can meet no more than 5 to 10 percent of the demand in the short-term perspective.

That's why they try to aim for the long run. The biggest problem now is that this branch of industry is lacking capacity, so the governments should take action and help if they want to preserve operational readiness and find success in rejuvenating the ammunition industry.

infographics Nammo
Illustrative infographics credit: Nammo

On that note, Nammo commends the defense budget proposal submitted by the Norwegian defense ministry this October that increases the artillery shell order from NOK 2.6 billion to NOK 4.3 billion but says it's not enough. For one, 4.3 billion kroner is about USD 6.725, and only about 0.5% of the amount of investment required.

Meanwhile, the Nammo Group has already invested 5–10 times more than usual this year and ran out of resources to continue expanding on its own, the company says.

Their estimate is that a hefty NOK 70 billion, or USD 6.28 bln, must be invested, of which Nammo itself is ready to provide up to 20 bln kr ($1.79 bln). Nammo suggests that "investment support can have many positive ripple effects, in addition to increasing military capacity," because the invested money would return in the form of taxes and dividends.

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