This year Ukraine received Marder IFVs from Rheinmetall following a contract signed with the German Government. Source: Photo by Marco Dorow, US DoD

Rheinmetall AG and Ukrainian Defense Industry JSC (UDI) have established a joint venture in Kyiv. 

The venture, Rheinmetall Ukrainian Defense Industry LLC, focuses on the maintenance of military vehicles as the initial phase of their partnership, with plans to expand into joint production of selected Rheinmetall products on Ukrainian soil.

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The inauguration of Rheinmetall Ukrainian Defense Industry LLC on 18 October, 2023, was announced by Ukraine’s Prime Minister, Denys Shmyhal, during the German-Ukrainian Business Forum in Berlin. Attended by German Chancellor Olaf Scholz, the event underscored the strategic importance of this venture for both nations.

This collaboration began in May 2023 and gained regulatory approval in Germany, Poland, and Ukraine, solidifying its standing in the defence industry. Rheinmetall holds a 51% stake in the joint venture, while UDI retains 49%, signifying a balanced partnership that aims to enhance Ukraine’s domestic defence industry.

Initially focusing on service, maintenance, and the production of military vehicles within Ukrainian territory, the venture aims to fortify Ukraine’s national security infrastructure. “In Germany, there are no competition overlaps and no indications of competition-related concerns,” emphasised the Federal Cartel Office in a statement on September 28, 2023.

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The collaboration’s first phase will see the service and maintenance of military vehicles, benefiting from Ukraine’s participation in the German Government’s “Ringtausch” multilateral equipment exchange projects. This cooperative effort is expected to lead to the joint production of select Rheinmetall products on Ukrainian soil, further bolstering the nation’s defence capabilities.

Rheinmetall has displayed a variety of international support for Ukraine. The German-based company initiated the delivery of 35mm air defence ammunition to Ukraine’s Gepard anti-aircraft tanks. In addition, Rheinmetall has supplied Ukraine with a mobile field hospital, fulfilling a €9m contract. 

Furthermore, Rheinmetall secured an order for 155mm artillery ammunition for Ukraine and Germany, with deliveries set for 2024. Lastly, Rheinmetall’s subsidiary, Expal Systems, will deliver more than 100,000 rounds of 155mm munitions to the German Government, earmarked for Ukraine’s war effort, representing Rheinmetall’s expanded production capacity. 

This joint venture creates opportunities to expand defence technology capacities within Ukraine but also aims to promise increased local value addition and swift access to military equipment from Germany. It is a testament to the shared commitment of Rheinmetall and UDI to advance Ukraine’s defence industry and secure the nation’s future.