Rheinmetall headquarters in Dusseldorf.
Dusseldorf The armaments group Rheinmetall is in the starting blocks for orders from the Bundeswehr. CEO Armin Papperger called for more speed in the award process from politicians. “The entire German industry is ready. The resources are there, the people are there, we also have the know-how.
What we need now is solidarity with politicians that we have the ability to plan,” said the group leader on Tuesday at the Handelsblatt conference “Security and Defense”. Rheinmetall invested 700 million euros in capacity expansion last year and hired 2,000 people. But so far there are no orders.
Papperger confirmed that there was a large deficit in the ammunition inventory. “We are able to produce more artillery ammunition than the Americans,” he said. “But I haven’t had a single order for it so far.” He doesn’t have two billion euros to pre-finance. It’s about huge numbers, not only for Ukraine, but also for the Bundeswehr. “We don’t have any ammunition with us, and it’s the same in Europe.” Papperger criticized that if only around one billion euros were available for ammunition in the defense budget annually, it would take 30 years for the stock to be increased to meet needs.
The turning point with the special fund of over 100 billion euros for the Bundeswehr was overdue, said Papperger. However, the announced five- and ten-year plans still do not exist. “In 2023 we really have to start the turning point now,” demanded the Rheinmetall boss.
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It is not only about the special fund, but also about reaching the two percent target, i.e. raising two percent of the gross domestic product for the defense budget. This would have to be increased by 20 to 25 billion euros per year. “It’s a huge responsibility that politicians have, but I think they have to take this step.”
Rheinmetall: Sales boosted by Expal takeover
In June, as a reaction to the Russian war of aggression against Ukraine, the Bundestag decided on a special fund worth 100 billion euros for the Bundeswehr.
Driven by the general increase in defense budgets in many countries, Rheinmetall is currently on record course. In addition, there is the recent takeover of the Spanish ammunition manufacturer Expal. With the additional revenue of 700 to 800 million euros, group sales in 2025 will be between eleven and twelve billion euros, said a group spokesman. Papperger had previously targeted ten to eleven billion euros. Meanwhile, the traditional Düsseldorf group, which is also active in mobility in addition to armaments, is aiming for sales of 6.5 billion euros in 2022.
“The resources are there, the people are there, we also have the know-how,” says Papperger.
(Photo: IMAGO/Mike Schmidt)
Tanks for Ukraine: Rheinmetall has access to 139 Leopard tanks
With regard to the Leopard battle tanks, Papperger told Stern magazine that he had a target return before taxes of at least ten percent. Currently, the delivery of Leopard 2 tanks to Ukraine is being discussed in the EU. In the short and medium term, Rheinmetall has access to 139 tanks from the series, said a company spokesman. Some of these would have to be revised. But the first could already be delivered in the spring.
Rheinmetall shares have increased in value rapidly since the start of the Ukraine war. In January 2022, the MDax titles were still trading at just under EUR 89. They are currently being traded at EUR 223.50, just below the record high of EUR 227.90 in the summer of last year.
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