The German arms manufacturer, Rheinmetall, has announced that it will establish a joint venture (JV) with an unnamed Ukrainian partner company to produce 155-millimetre (mm) ammunition in Ukraine.

A memorandum of understanding was signed in the presence of the Ukrainian Minister for Strategic Industries, Alexander Knamyshin, during the Munich Security Conference.

Rheinmetall expects its new ‘Ukrainian Competence Centre for Ammunition’ will produce a six-digit number of 155mm calibre bullets per year in the future, including the corresponding propelling charges.

To achieve this, the partners plan to build and jointly operate a new production facility. Rheinmetall will have a 51% stake in the new company, with the remaining 49% share held by its Ukrainian partner.

Avdiivka falls

This announcement came at the same time that invading Russian forces gained the upper hand in Avdiivka, from which Ukrainian Armed Forces have since withdrawn.

“Delays in Western security assistance, namely artillery ammunition and critical air defence systems, inhibited Ukrainian troops from defending against Russian advances in Avdiivka,” observed the security research group, the Institute for the Study of War.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

This loss encapsulates a new avenue for sustaining the flow of war materiel to Ukraine’s forces: internal industrial output.

However, this is not a new idea. To offset its materiel loss, Ukraine’s indigenous defence industry established teaming arrangements with western defence organisations throughout 2023, particularly in the summer time.

In fact, a defence industries alliance was formed in late September 2023. This comprises 38 member companies that represent 19 countries. These are agreements on joint production, exchange of technologies, supply of components, propellant powder productio and munitions manufacturing.

Likewise, Rheinmetall had also previously formed a JV with Ukroboronprom – Ukraine’s state-owned defence industry corporation – in October 2023. This first JV set the scene for efforts in maintaining and repairing combat vehicles in Ukraine, and later armoured vehicles.

A new avenue: Ukrainian industrial output

“Demand for ammunition in many countries is enormous – first and foremost in Ukraine, of course,” suggested Armin Papperger, chairman of the executive board of Rheinmetall.

“Our intention of establishing another joint venture underscores our support for Ukraine. This joint venture will make a vital contribution to the country’s ability to defend itself – and thus to the security of all Europe.”

Similarly, this latest JV, aimed at strengthening Ukraine’s own indigenous ammunition output, comes just after Rheinmetall announced it will shoulder the costs of a new ammunition factory in Underluss, Lower Saxony.

The company made the bold claim that this facility will help to ensure that Germany is wholly self-reliant in its production of ammunition:

“Previous dependency on export permits issued by other countries will thus be eliminated, giving Germany full sovereignty in this national security-relevant domain.”

In the same way, “[w]e want to be an effective partner of Ukraine, to help rebuild the country’s once powerful defence industry, and to assure Ukrainian autonomy in ammunition production,” Papperger added.

“Already today, we are Kyiv’s most important defence industry partner. We are currently processing several billion euros worth of projects on behalf of Ukraine, with more almost daily.”