By Sabine Siebold and Anneli Palmen

DUESSELDORF (Reuters) – German arms-maker Rheinmetall is able to drastically increase the output of tank and artillery munitions to fulfill sturdy demand in Ukraine and the West, and should begin producing HIMARS a number of rocket launchers in Germany, CEO Armin Papperger advised Reuters.

He spoke days earlier than Germany’s defence business bosses are resulting from meet new defence minister Boris Pistorius for the primary time, although the precise date has but to be introduced.

With the assembly, Pistorius goals to kick off talks on find out how to pace up weapons procurement and increase ammunitions provides in the long run after virtually a 12 months of arms donations to Ukraine has depleted the German navy’s shares.

Rheinmetall makes a variety of defence merchandise however might be most well-known for manufacturing the 120mm gun of the Leopard 2 tank.

“We are able to produce 240,000 rounds of tank ammunition (120mm) per 12 months, which is greater than the whole world wants,” Papperger stated in an interview with Reuters.

The capability for the manufacturing of 155mm artillery rounds will be ramped as much as 450,000 to 500,000 per 12 months, he added, which might make Rheinmetall the most important producer for each sorts of ammunition.

In 2022, Rheinmetall made some 60,000 to 70,000 rounds every of tank and artillery shells, in accordance with Papperger, who stated manufacturing might be boosted instantly.

Demand for these munitions has soared since Russia’s invasion of Ukraine final February, not solely resulting from their huge use on the battlefield but additionally as Western militaries backfill their very own shares, bracing for what they see as a heightened menace from Moscow.

Papperger stated a brand new manufacturing line for medium calibre ammunition, utilized by German-built Gepard anti-aircraft tanks in Ukraine for instance, would go stay by mid-year.

Germany has been making an attempt for months to seek out new munitions for the Gepard that its personal navy had decomissioned in 2010.

HIMARS PRODUCTION LINE IN GERMANY?

On the identical time, Rheinmetall is in talks with Lockheed Martin (NYSE:), the U.S. firm manufacturing the HIMARS (Excessive Mobility Artillery Rocket System) a number of rocket launchers in heavy use with Ukrainian troops, Papperger stated.

“On the Munich Safety Convention, we goal to strike an settlement with Lockheed Martin to kick off a HIMARS manufacturing (in Germany),” he stated, referring to an annual gathering of political and defence leaders in mid-February.

“We have now the expertise for the manufacturing of the warheads in addition to for the rocket motors – and we have now the vans to mount the launchers upon,” Papperger stated, including a deal might immediate investments of a number of hundred million euros of which Rheinmetall would finance a significant half.

Rheinmetall additionally eyes the operation of a brand new powder plant, probably within the japanese German state of Saxony, however the funding of 700 to 800 million euros must be footed by the federal government in Berlin, he stated.

“The state has to take a position, and we contribute our technological know-how. In return, the state will get a share of the plant and the income it makes,” Papperger urged.

“That is an funding that isn’t possible for the business by itself. It’s an funding into nationwide safety, and subsequently we want the federal state,” he stated.

The plant is required as shortages within the manufacturing of particular powders may develop into a bottleneck, hampering efforts to spice up the output of tank and artillery shells, he famous.

A number of days earlier than the assembly with the brand new defence minister, Papperger pushed for a rise of Germany’s defence funds.

“The 51 billion euros within the defence funds won’t suffice to buy every thing that’s wanted. And the cash within the 100 billion euro particular funds has already been earmarked – and partially been eaten up by inflation,” he stated.

“100 billion euros appears like a large sum however we might really need a 300 billion euro package deal to order every thing that is wanted,” he added, noting that the 100 billion particular fund doesn’t embody ammunitions purchases.

Even earlier than Russia’s invasion of Ukraine, Germany was 20 billion euros in need of reaching NATO’s goal for ammunitions stockpiling, in accordance with a defence supply.

To plug the munitions hole alone, Papperger estimates the Bundeswehr (German armed forces) would want to take a position three to 4 billion euros per 12 months.

Within the talks with the minister, the defence boss hopes for a flip in direction of a extra sustainable long-term planning in German procurement, stretching a number of years into the longer term, because the business wanted to have the ability to make its preparations in time.

“What we’re doing in the meanwhile is definitely battle stocking: Final 12 months, we prefinanced 600 to 700 million euros for items,” Papperger stated. “We should transfer away from this disaster administration – it’s disaster administration whenever you purchase (uncooked supplies and different issues) with out having a contract – and get into a daily routine.”

(This story has been refiled to insert the phrase ‘million’, making clear sum concerned is 600 to 700 million euros, within the closing paragraph.)