KNDS and Junghans Defence get NATO contract to replenish European artillery shell stocks.

NATO signs contracts worth a total of €1.1 billion for the acquisition of over 220,000 155mm artillery shells. This is not just a routine procurement; it represents a strategically important decision, as these shells are compatible with the self-propelled howitzers CAESAR and PzH 2000, enhancing the alliance's capability to swiftly respond to the needs of its member states.
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NATO urges for an increase in the production of 155mm artillery shells (Picture source: KNDS)

This initiative comes against the backdrop of the ongoing conflict in Ukraine, where the supply of ammunition has become a critical concern. NATO member countries have depleted their stocks by sending substantial shipments of heavy munitions to aid the Ukrainian forces in their relentless struggle against Russia.

The contracts have been signed with several NATO member nations, to either transfer these shells to Ukraine or replenish their depleted reserves. This bulk procurement approach also aims to ensure cost efficiencies in acquiring these vital munitions. The initial deliveries of these projectiles are slated to commence at the end of 2025, and they will be manufactured by the Franco-German joint venture KNDS and the German company Junghans Defence.

KNDS, as a major player in the European munitions sector, is gearing up to significantly increase its production capacity. By 2025, the company aims to produce up to 100,000 155mm shells annually, marking a substantial increase from the 60,000 shells produced at the outset of the conflict in Ukraine. This expansion is deemed crucial to meet the rising demand for munitions and bolster NATO's defense capabilities.

It is worth noting that Junghans Defence, a joint venture formed by Thales and the German company Diehl, specializes in the development and production of artillery rocket systems and bombs. Situated in La Ferté Saint-Aubin, France, this company plays a pivotal role in the design of innovative munitions, including the SPACIDO trajectory correction rocket, which significantly enhances the precision of artillery fire.

This NATO initiative, with its emphasis on compatibility with CAESAR and PzH 2000 self-propelled howitzers, reinforces the alliance's capacity to swiftly meet the needs of its members and support Ukraine in its fight for sovereignty. The international community is closely monitoring these critical developments in a complex geopolitical context.

As a reminder, in March 2023, European Union member states committed to bolstering the supply of artillery shells for Ukraine in response to the critical shortage of ammunition faced by Ukrainian troops deployed on the front lines. This commitment was vital to enhance Ukraine's defense capability against Russian aggression.

As part of this effort, EU countries devised an ambitious plan that included supplying shells from their existing stocks and jointly placing orders for projectile production. The stated goal was to deliver one million shells to Ukraine as part of this initiative, underscoring its critical importance in supporting Ukraine's sovereignty and its struggle against Russian aggression.

However, towards the end of November 2023, Ukraine's Minister of Foreign Affairs, Dmytro Kuleba, announced that the European Union had successfully transferred nearly 300,000 artillery shells to Ukraine out of the promised one million. This achievement reflects the concerted efforts made to address Ukraine's urgent ammunition needs.

Nevertheless, several major challenges emerged within the framework of this initiative. Increased demand led to a significant rise in production costs, with the cost of producing the simplest 155mm shell increasing from €2,000 to €8,000 since the start of the Russian invasion in Ukraine. Additionally, there are now 14 different variations of these shells, necessitating standardization of parameters among EU member countries, a task that is ongoing but complex and time-consuming.

On January 11, 2024, Johanna Bernsel, the spokesperson for the European Commission, delivered a message of hope, stating that the European Union would be capable of producing one million shells for Ukraine by the end of the current winter. This announcement offers hope that Ukraine will be better equipped to confront persistent challenges in the current tense environment, where the need for adequate munitions is paramount to its security and stability.