Rheinmetall Secures Historic €8.5 Billion Contract for Artillery Munitions with Germany.

Rheinmetall has landed a monumental framework contract with the Bundeswehr to deliver 155mm artillery munitions, valued at up to €8.5 billion gross. This agreement was formalized on June 20, 2024, during a signing ceremony attended by Annette Lehnigk-Emden, President of the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw), and representatives of Rheinmetall at the BAAINBw headquarters in Koblenz.
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The new contract expands an existing framework agreement, primarily aiming to replenish the Bundeswehr and its allies' artillery ammunition stocks and support Ukraine in its defense efforts. (Picture source: Rheinmetall)

The new contract expands an existing framework agreement, primarily aiming to replenish the Bundeswehr and its allies' artillery ammunition stocks and support Ukraine in its defense efforts. Deliveries are expected to begin in early 2025, with the Federal Republic of Germany as the main purchaser. Part of these supplies will be provided to Ukraine, while partner nations, including the Netherlands, Estonia, and Denmark, also participate in the order.

An initial call-off from the framework contract has already been made to ensure the operational capacity of a new factory being established in Unterlüß, Lower Saxony. This first order includes various versions of 155mm caliber projectiles, valued at approximately €880 million gross, with deliveries starting in 2025. Rheinmetall anticipates increased call-offs in the coming years.

Armin Papperger, Chairman of the Executive Board of Rheinmetall AG, expressed his enthusiasm about the deal: “We are delighted about the largest order in our company’s recent history. This large-scale framework contract underscores Rheinmetall’s leading role as a munitions supplier in Germany and our position as the world’s largest manufacturer of artillery munitions. We greatly appreciate the trust expressed in this long-term order as part of the security provision for the Federal Republic of Germany and its allies.”

Papperger added, “The Federal Government is keeping its word. This framework contract will ensure the necessary capacity utilization of the new factory we are building at our Unterlüß site in Lower Saxony to supply our armed forces with munitions. The Federal Chancellor assured us of this during his visit for the groundbreaking ceremony on February 12, 2024.”

Rheinmetall’s new facility in Unterlüß will cover the entire value chain for artillery munitions production, offering a complete “full shot” package: the projectile, the fuse, the explosive charge, and the propellant charge. The site aims to achieve an annual capacity of 100,000 projectiles from its second year of production, scaling up to 200,000 per year.

Artillery plays a crucial role in modern land warfare, as evidenced by the high demand for artillery munitions in the ongoing conflict in Ukraine. Current production capacities in the Western world are not equipped to meet these extensive requirements. Consequently, Germany, like many other countries, plans to procure large quantities of munitions over an extended period.