German government awards unprecedented EUR8.5 billion contract to arms giant
Date
6/26/2024 8:18:10 AM
(MENAFN) The German government has awarded an unprecedented EUR8.5 billion contract to Rheinmetall, a major weapons manufacturer, for the production of 155mm artillery shells. This historic deal, announced by Rheinmetall on Thursday, marks the largest single contract in the company's 135-year history. While specific details on the quantity of shells were not disclosed, Rheinmetall confirmed that a significant portion of the order will be allocated to Ukraine, although their production capacity falls short of Kiev's extensive demands.
Under the terms of the contract, Germany will cover the costs for Ukraine's portion of the order, highlighting international support for Ukraine's defense efforts amid ongoing geopolitical tensions. Initial deliveries are scheduled to commence in 2025, with production set to ramp up at Rheinmetall's new factory in Lower Saxony, which is currently under construction. The facility is projected to manufacture approximately 100,000 shells annually starting from its second year of operation, contributing to a broader goal of producing 700,000 shells across all Rheinmetall factories by next year.
Despite these ambitious production targets, Ukrainian officials have expressed concerns over the adequacy of the supply. European Union estimates indicate that Russia was expending 700,000 shells approximately every 35 days during Ukraine's recent counteroffensive. Ukrainian authorities have emphasized the need for a significantly higher daily output of 20,000 shells to sustain their military operations using Western-supplied artillery.
The contract underscores Germany's commitment to enhancing regional defense capabilities while addressing urgent military supply needs in the face of escalating tensions. As Rheinmetall prepares to scale up production to meet these demands, the implications of this landmark agreement extend beyond national borders, shaping strategic dynamics and security policies across Europe.
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