How the Augsburg armored gear manufacturer Renk is growing again with armor

Suzanne Wiegand

The CEO of the Renk Group is expanding the armaments division again.

(Photo: Renk)

Berlin Susanne Wiegand has little to do with nostalgia. For a year she has been CEO of the Renk Group, a component manufacturer for vehicles and battle tanks with a 150-year company history. “We’re proud of our history, but we don’t want to rest on our laurels,” says Wiegand.

She has been around a lot in the industry, first she was at Thyssen-Krupp Marine Systems, then at Nordic Yards and at Rheinmetall. So now Renk, a traditional group whose recent past was characterized by numerous personnel changes.

The Augsburgers were part of MAN, later the Volkswagen Group, which finally sold them to the financial investor Triton in October 2020. The fund actually shies away from investments in the armaments sector because investors are reluctant to invest in these companies. And Renk should eventually go public. Wiegand should therefore evaporate the business with the military. Then the Ukraine war broke out and that changed the view of Renk.

Armament orders from all over the world – just not Germany

Wiegand expands the armaments business again, but in the changed environment it will probably go public anyway. The company recently confirmed that various options were being explored. Investment bankers estimate the value at 2.5 to 3 billion euros. This would be well above the purchase price Triton had paid.

In the public eye, Renk is not on the same level as Rheinmetall or Airbus, the Bavarians are moving in the shadow of the armaments heavyweights. With 3,400 employees, the company manufactures key components such as gearboxes. Parts from the company are installed in almost all Western main battle tanks – whether the German Leopard, France’s Leclerc or Israel’s Merkava. They are also found in the ships of the Navy and other naval forces.

Transmission production at Renk

Renk’s products are considered the “gold-edge solution” in the industry.

(Photo: Renk)

In their segment, Renk products are regarded as the gold-edge solution – ideal, but correspondingly costly and time-consuming. In procurement, however, marketable and cost-effective solutions are preferred. The order books filled up as the war in Ukraine progressed. While main battle tanks were considered obsolete until then, many countries are now investing in their armies. “We receive inquiries and concrete orders from all regions,” says Wiegand. One country, however, remains calm: Germany.

When asked about the situation, she bursts out in frustration. The speech by Federal Chancellor Olaf Scholz (SPD) at the turn of the century was very good, as was the acceptance among the population, she says. “But what worries me is the speed of implementation.” The decision-makers in Germany drew up lists and gave lectures. “But we simply have to procure it,” explains Wiegand. The Bundeswehr was blank, supplies had to be purchased.

High investments among MAN and VW, but low efficiency

Wiegand calls for a change of course: “To this day, the procurement system is designed for a peacetime economy.” Both sides must work together, also to help Ukraine more decisively, she says. Representatives of other armaments companies and politicians such as FDP defense expert Marie-Agnes Strack-Zimmermann share this view.

The higher demand poses challenges for Renk. “We have to cope with the growth,” says the CEO. After taking office, she initiated a restructuring that society first had to digest. Massive investments were made under MAN and VW, but little attention was paid to the cost situation. In her previous time as Renk boss, Wiegand worked to improve efficiency in the company.

>> Read also: “Why don’t Germany and France build a joint tank?”

After the medium-sized company had not grown for more than ten years, sales jumped significantly to around 850 million euros. This year, Wiegand wants to break through the one billion euro mark. “We can do that from the existing business.” But Renk also makes additional purchases. The company recently bought two companies in the USA with annual sales of over 200 million euros.

Wiegand also wants to expand the product range as the company grows: “We have to become more international, with broader technological expertise.” To do this, she is looking for further acquisition targets. For them, blueprint is a business unit acquired from the US group L3 Harris, which manufactures engines in North America in addition to transmissions. Renk is thus gradually moving out of the niche it has occupied in military production.

The armaments sector is thus gaining in importance for Renk. This is an advantage for Wiegand, as the way the industry is viewed is changing – including among investors. From the point of view of investment bankers, an IPO could bring in even more. According to a banker, the prospects for armaments companies have improved considerably.

More: Armored gear manufacturer Renk plans to go public

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