SecurityEconomyPolitics

Confident in a crisis

9. October 2024

Rheinmetall plans to produce 200,000 artillery shells per year at its new ammunition factory in Unterlüß in Lower Saxony. The importance of a domestic defence industry for Europe’s security was underlined by the visit of German Chancellor Olaf Scholz at the groundbreaking ceremony of the new factory.

EUR

300

million are being invested by Rheinmetall in its new factory in Lower Saxony at the traditional site of Unterlüß.


200.000

artillery shells per year are to be produced there in the future.


500

new jobs are created in the region with the factory.

“We have to move away from manufacturing and towards the large-scale production of defence equipment,” emphasised Olaf Scholz in his speech on 12 February 2024 to around 250 employees and invited guests from the fields of politics, administration, the armed forces, and industry. In addition to the German Chancellor, Federal Defence Minister Boris Pistorius and Danish Prime Minister Mette Frederiksen accepted Rheinmetall’s invitation to the groundbreaking ceremony for the new ammunition factory at the Unterlüß site. A ceremony like this could not be more symbolic today. For Germany and Europe, it is ultimately about greater security from the aggressor Russia and greater independence from the USA. With its investments in the factory, Rheinmetall is laying “the foundation for supplying the Bundeswehr and our partners in Europe with artillery ammunition independently and, above all, sustainably,” as Scholz continued.

A “Full shot” from a single source

And it is urgently needed. Not only is Ukraine gradually running out of projectiles in its defensive fight, but the Bundeswehr’s depots are also empty to a great extent. It is a race against Putin’s war economy. Rheinmetall is therefore speeding up the construction of its new production line in Unterlüß. It is expected that as early as 2025 – after only 12 months of construction – the factory in Lower Saxony is to be in operation. Besides artillery ammunition, the factory will also produce rocket artillery propulsion units. In order to reduce time-consuming dependencies on export approvals from other countries, Rheinmetall is creating the entire value chain for artillery ammunition in Unterlüß: from projectiles via the ignitor to the propelling and explosive charges which drive the projectile out of the barrel, everything will be produced here.

Rheinmetall CEO Armin Papperger shows German Chancellor Olaf Scholz, Danish Prime Minister Mette Frederiksen, and German Defence Minister Boris Pistorius (left to right) through the traditional site at Unterlüß. During a tour of the factory, the high-ranking guests learn about ammunition production. (Image: Rheinmetall | Katja Kletzke)

Investment in national security

“In order to ensure Germany’s strategic sovereignty in the field of ammunition production, we are creating a national production facility that will set new standards and, above all, ensure the supply of the Bundeswehr,” said Rheinmetall CEO Armin Papperger at the groundbreaking ceremony in Unterlüß. His company is financing the €300 million investment from its own funds – without any public sector involvement. At the same time, the factory in Lower Saxony will create 500 attractive jobs in the Südheide region.

Since Russia’s attack on Ukraine, Rheinmetall has invested around €1 billion in expanding its artillery production. The Group has long been one of the world’s largest producers of ammunition. At its sites in Germany, Spain, Hungary, Australia, South Africa, and, soon, Ukraine and Lithuania, Rheinmetall will produce a total of 1.1 million rounds per year from 2026/2027.

“Tanks, howitzers, and air defence systems can’t be bought from a shelf”

During his speech at Unterlüß, Olaf Scholz praised the speed with which Rheinmetall has ramped up its production. “For far too long, armaments policy in Germany has been conducted as if it were a car purchase,” the Chancellor criticised. In the future, the German government is planning longer-term framework contracts. “A strong defence also needs a solid industrial base,” Scholz continued. “And that will come when we Europeans bundle our orders, thus giving industry a perspective for the coming years.”

High-ranking appreciation

The high-ranking visitors’ presence at Unterlüß is also an appreciation for Rheinmetall and its employees. The Chancellor and Defence Minister arrived early in order to talk personally with the employees outside the official programme of events. The Chancellor praised: “You can be proud of what you are achieving here. You are literally working for the good of our country.”

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