National security provision: Rheinmetall builds new ammunition factory

Rheinmetall is taking a strategic step to strengthen national security preparedness. At the Unterlüß site in the Lüneburg Heath, the technology group will build a new factory to further enhance the state's independence in ammunition supply. Federal Chancellor Olaf Scholz, the Prime Minister of the Kingdom of Denmark, Mette Frederiksen, and Defense Minister Boris Pistorius, together with Armin Papperger, the CEO of Rheinmetall AG, recently marked the symbolic groundbreaking for the "Niedersachsen Factory". The event was attended by numerous other high-ranking representatives from politics, administration, armed forces, and industry.
The "Niedersachsen Factory" will produce artillery ammunition, explosives, and components for rocket artillery. Around 200,000 artillery shells are expected to be produced here annually, as well as up to 1,900 tons of RDX explosive and optionally other components for ammunition loading. In addition, on-site production of rocket propellants and, if necessary, warheads will take place, as needed for the planned German rocket artillery project.
"To secure Germany's strategic sovereignty in the field of ammunition manufacturing, we are creating a national production facility that sets new standards and above all will ensure the supply for the Bundeswehr," said Armin Papperger. "With the 'Niedersachsen Factory', another European center for the production of artillery ammunition and other effectors is being created at our traditional location in Unterlüß. We are doing this out of responsibility and the desire to make a significant contribution to the defense capability of our country and our NATO partners with our technologies."

The establishment is accompanied by a privately funded investment volume of around EUR 300 million. Rheinmetall will bear the costs of the factory, with no participation from the public client. This will create around 500 new jobs locally.

With the new factory, Rheinmetall is creating the opportunity to independently meet the needs of the Bundeswehr from domestic production and, especially in times of crisis, ensure independent supplies to partner states. Existing dependencies on export permits from other countries will be eliminated, thus establishing Germany's sovereignty in this security-relevant area. Rheinmetall will create the complete value chain for artillery ammunition in Unterlüß, in order to offer the "Full Shot" from a single source: the projectile, the primer, the explosive charge, and the propellant that propels the projectile out of the barrel.
For this, the Niedersachsen Factory will work largely autonomously and replicate all work steps on site that are required for the production of artillery shells. In setting up the manufacturing process, Rheinmetall follows a modular and scalable concept for supply security, which will allow for further growth in the future.
The primary objective in setting up the factory is to achieve an early start of production. After a construction period of around 12 months - starting from the contract conclusion with the client - a capacity of 50,000 shells per year will be reached, with an initial share of national value-added of 50 percent. This share will gradually increase to 80 percent in the second year and reach 100 percent of national added value in the third year of production. This will ensure security of supply for Germany and complete domestic value creation.
An annual capacity of 100,000 shells will be achieved from the second year of production onwards, and later the capacity will increase to 200,000 shells per year.

Background: 

Artillery is the essential capability in the military land dimension. The experiences from the Ukraine War show the immense need for artillery ammunition. The Bundeswehr's arsenals are empty, and their demand for ammunition is estimated at around EUR 40 billion. The scarcity is exacerbated by the enormous ammunition consumption in Ukraine. The available production capacity of the western world is not designed for these quantities. Therefore, Germany, like other countries, plans to procure large quantities over a longer period of time.

Rheinmetall is a leading manufacturer in the defense sector and one of the largest producers of ammunition worldwide. The company has already made significant investments in its production network in recent months. From 2025, Rheinmetall plans to produce up to 700,000 artillery shells as well as 10,000 tons of powder at its locations in Germany, Spain, South Africa, Australia, and Hungary.

The Unterlüß Site:

The Rheinmetall site in Unterlüß is one of the company's most important sites. It is celebrating its 125th anniversary this year. Currently, around 2,500 employees are working there, mainly engaged in the development, construction, and maintenance of tracked vehicles as well as the production of weapon systems and ammunition - for the Bundeswehr and the armed forces of other nations. Rheinmetall also conducts its activities with high-energy laser effectors in Unterlüß. Furthermore, the Unterlüß Test Center with the largest privately owned shooting range in Europe is involved in the acceptance procedures for ammunition and weapon systems.

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