Translated by Milo Dvorak
24. 6. 2024
Business Newsletter #45
Good morning,
In the wake of the Russian invasion of Ukraine, the old continent has been slowly rearming itself, with Poland, Scandinavia and the Baltic states being at the forefront of it. However, it's no secret that Germany's rusty gears have been undergoing a slow but steady lubrication. We shall see what Germany looks like once it has shaken the WWII chip off of its shoulder. For now, though, there's a lot of money to be had for arms manufacturers.
Published by e15.cz on 20 June 2024
The German arms conglomerate Rheinmetall has received a record contract. The German army has signed a framework agreement with them for artillery ammunition worth up to €8.5 billion, nearly CZK 212 billion. The largest German arms manufacturer, which, among other things, produces Leopard tanks had a framework agreement since last July for a maximum of €1.3 billion. This has now been increased by €7.2 billion.
The exact number of 155-millimetre shells, which can be fired over forty kilometres, has not been specified. According to the DPA agency, it will likely be several million. They will primarily be manufactured in Unterlüss, Lower Saxony.
The ammunition is intended to fill the somewhat empty Bundeswehr warehouses, and a large portion is also set to be sent to Ukraine. The country, invaded by Russia, has already received ammunition supplies from Germany, with further deliveries expected in the future.
Deliveries under the current framework agreement are scheduled to begin at the start of 2025. The first batch is valued at €880 million. It is unclear how long the framework agreement will remain valid, reports DPA. The agreement signed last year was valid for six years.
Rheinmetall also manufactures tanks, military trucks and cannons. The company's market value has more than quadrupled since the start of the Russian invasion. Rheinmetall CEO Armin Papperger predicted in May that his company would secure up to a third of the contracts from the special €100 billion defence fund established by Germany in response to the Russian invasion of Ukraine.