German defense giant, Rheinmetall, has secured a €1.3 billion contract to supply artillery shells to the German Armed Forces (Bundeswehr), strengthening its lead as an ammunition supplier in Europe.
Rheinmetall to supply the Bundeswehr with ammunition until 2029
This agreement is divided into two separate contracts. One is a new contract for the supply of 155mm artillery ammunition; the other is an extension of an existing contract. The supply of several hundred thousand shells of different types is expected.
The new contract, which will run until 2029, represents a potential order volume of approximately €1.2 billion, including VAT.
In addition to these supplies, the Bundeswehr has increased an existing framework agreement for the DM121 ammunition, raising its contract volume from €109 million to a total of €246 million, including VAT.
First ammunition deliveries are expected shortly.
Initial service and practice ammunition orders occurred just after the contract was signed. Rheinmetall is scheduled to deliver €127 million worth of shells (VAT included) in the short term.
This order reaffirms Rheinmetall’s role as a key partner of the German armed forces in the supply of ammunition and artillery, a relationship that dates back more than 125 years.
The company will provide traditional shells and insensitive ammunition, smoke shells, and others. This includes the 155mm Assegai ammunition Rheinmetall Denel of South Africa produced.
These projectiles have a boat tail and base bleed design that guarantees their effective use at a range of approximately 40 kilometers. The Bundeswehr will introduce the proven Assegai ammunition as part of the framework contract.
Impact of the Agreement on Rheinmetall and NATO
For Rheinmetall, this framework agreement ensures constant use of its ammunition production capacity for years to come. In addition, the contracts will help ensure a secure supply of ammunition for the armed forces of Germany and other NATO nations.
The framework contract also offers logistical advantages to other users of 155mm artillery, thanks to the guaranteed long-term production of various types of ammunition.