The Rheinmetall arms manufacturer opened a new factory at its existing site in Unterlüss in northern Germany on Wednesday, boasting that once it reaches capacity it could become Europe’s biggest munitions production factility.
CEO Armin Papperberger said that the production of 155 mm caliber artillery shells would be progressively ramped up, to reach 350,000 units per year by 2027. These artillery shells are in particular demand and short supply in Ukraine, and Europe and NATO members have been scrambling to replenish their stockpiles and increase production capacity.
155 mm artillery shells are in major demand in Ukraine, and western stockpiles have been dwindling rapidly since Russia’s invasionImage: Markus Schreiber/AP Photo/picture alliance
Rheinmetall plans to increase unit production at several facilities as well as the new one in Unterlüss, near Hanover.
NATO’s Rutte, German ministers attend ceremony
NATO Secretary General Mark Rutte, German Defense Minister Boris Pistorius and Finance Minister Lars Klingbeil toured the facility with Papperberger and other officials on Wednesday.
Papperberger showed his guests of honor around the expanded Unterlüss facilityImage: Markus Schreiber/AP Photo/picture alliance
According to Rheinmetall, the company invested roughly €500 million (roughly $580 million) in this new facility and another that will focus on rocket motors.
The company’s site in Unterlüss already includes other smaller areas for artillery production and for the production of Puma tanks, as well as a large firing range.
“With this we’re opening a new chapter both in our company’s history and that of our site at Unterlüss with regard to artillery production,” Papperberger said.
Earlier this month, the company reported rising turnover and profits, as well as record order figures — turning orders into deliveries and revenues can take some time in this sector — for the year to date.
Last July, Pappperberger was even alleged to be the target of a foiled Russian assassination plot, in a sign of the company’s importance to Kyiv’s military.
Also on Wednesday, Cologne protesters belonging to a group called ‘Disarm Rheinmetall’ protested outside a military siteImage: Sascha Thelen/dpa/picture alliance
Rheinmetall stock up roughly 2,000% since Russia invaded Ukraine
Investors have been flocking to Rheinmetall stock in recent years, and particularly since Donald Trump’s election to a second term as US president.
Stagnant at or below €100 for decades, it doubled in just a few months after Russia’s February 2022 invasion of Ukraine.
It continued to climb steadily as the previous German government pledged a new era in matters of defense spending and as the conflict in eastern Europe dragged on, reaching around €500 in time for last year’s US presidential eletions.
Then in the first half of this year it went into overdrive, peaking at almost €1,900 in late May.
Investors seeking the next fashionable stock to inflate have evidently decided that even if Germany and other European NATO members have no idea how they will spend 5% of GDP on defense, or when, pouring taxpayer money into the coffers of companies like Rhinemetall will play a part.
Trump’s pressure over defense spending ‘not bad for Europe’
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