Rheinmetall, a German manufacturer of automotive and military equipment, plans to produce weapons, military equipment, and ammunition in Ukraine, although the projects are expected to be implemented after Ukraine's victory. However, the company is already seeking to sign agreements on joint ventures with Ukrainian companies
The first agreements are expected to be concluded in the coming weeks, as reported by the company's CEO, Armin Papperger, according to Handelsblatt. Ukraine will also play the role of an investor in the new ventures, providing it with the opportunity “to defend itself in the medium and long term”.
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Rheinmetall has a project in Ukraine known as the Panther KF51 main battle tank (MBT), which is currently only a technology demonstrator with a new turret installed on the Leopard 2 tank chassis. The investment in the enterprise is estimated at €200 million, but the final version of the Panther tank is still uncertain.
The company can only install this development on the Lynx AFV chassis, which results in a light tank rather than a main battle tank. It is possible that Rheinmetall may be looking for the suitable chassis for its turret in Ukraine.
In addition, the company has plans for air defense systems, with the Skynex system being the only one currently available, which Ukraine has already received. This system is potentially highly effective and relatively inexpensive means of countering drones, as well as cruise missiles and other targets in the close zone. Its main feature is programmable munitions that explode near the target with high precision.
Rheinmetall is one of the leading manufacturers of artillery ammunition in the world. The company produces a wide range of ammunition from calibers of 105 to 155 mm, which are used in artillery. In addition to traditional ammunition, Rheinmetall also offers programmable and guided artillery shells for increased accuracy and effectiveness on the battlefield. The company also produces tank ammunition, mortars, and air defense systems.
Ukraine needs everything listed above, and so do other countries, while Rheinmetall needs production capacity. The company is actively expanding and in November 2022, Rheinmetall acquired the Spanish ammunition manufacturer Expal Systems SA for $1.2 billion. It is also investing in projectile production in Romania and building an explosive substance production plant in Hungary.
Rheinmetall received additional €0.74 billion in sales volume since the beginning of full-scale invasion of Ukraine, bringing it to €6.4 billion compared to €5.65 billion in 2021. The company understands well what comes next, as weapons not only cost money, but also time. Faster pace has become an important competitive advantage, and to achieve it, the company needs appropriate production capacities. As Armin Papperger stated, “we can expect 2023 to be the best year in the company's history in terms of order intake”.
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