Rheinmetall AG, Germany’s largest munitions manufacturer, said Europe’s defense industry can’t meet Ukraine’s artillery ammunition needs for its war against Russia unless governments increase spending enough to double production capacity.
(Bloomberg) — Rheinmetall AG, Germany’s largest munitions manufacturer, said Europe’s defense industry can’t meet Ukraine’s artillery ammunition needs for its war against Russia unless governments increase spending enough to double production capacity.
“I need orders. Without orders, I won’t produce anything,” Chief Executive Officer Armin Papperger said in an interview. “Any shortage of ammunition won’t be the defense industry’s fault. Industry can deliver what’s needed.”
Slow progress finalizing orders means Rheinmetall will produce shells at around two-thirds capacity this year, Papperger said. That’s despite repeated warnings from Ukrainian and European officials that sufficient supply of artillery munitions will prove a decisive factor in the ongoing war.
Availability of 155-millimeter caliber ammunition, a type of NATO standard shell, are increasingly in focus as Ukraine looks to hold off a Russian offensive centered around the Donetsk region. Ukraine Defense Minister Oleksii Reznikov has said the country’s armed forces require more than 350,000 shells per month, more than three times the amount it’s currently using.
Reznikov has asked the European Union to provide 250,000 shells per month, an amount Papperger said “would be difficult to produce.”
“The capacity in Europe would have to be doubled to achieve that rate,” he said.
Rheinmetall can currently produce 450,000 artillery rounds per year globally and aims to increase to 600,000 rounds in the next two years with extra capacity at its Varpalota site in Hungary and a new powder factory in the east German state of Saxony, the CEO said. The company expects the Saxony government to approve plans for the factory, which would involve a €700 million ($750 million) to €800 million investment, in the next few weeks.
“It’s a national security project. We can’t finance that on our own. We need the kind of state support that Intel got for its chip factory,” Papperger said, citing reports that Intel Corp. will get as much as €5 billion in subsidies to build a chip manufacturing plant in the state. “I think the government will make a very wise decision.”
With orders lagging, Rheinmetall also hasn’t fully ramped up production of the smaller 120-millimeter tank shells used by the majority of US and European-made battle tanks, Papperger said.
The company has enough capacity to make 240,000 of the shells, but is set to manufacture under 150,000 this year.
Since the beginning of the year, NATO countries have pledged to deliver hundreds of tanks to Ukraine, including more than 100 Leopard 2’s jointly made by Rheinmetall and Krauss-Maffei Wegmann GmbH & Co KG.
Despite the capacity problems, Papperger said he was confident that with adequate support, the defense industries in Europe and the US could deliver enough military equipment to Ukraine to thwart a Russian victory.
“If the West wants Russia to lose this war, then Russia won’t win it,” he said. “Europe and the US are both capable of producing more than Russia will ever be able to produce.”
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