Rheinmetall launches mega-plant for artillery shells: will produce ammunition for Ukraine and NATO
27 August 20:54
On Wednesday, August 27, 2025, the German defense concern Rheinmetall officially opened Europe’s largest artillery ammunition plant. This is reported by "Komersant Ukrainian" with reference to Bloomberg.
The plant is located in Unterluss (Lower Saxony, Germany) and will be able to produce up to 350,000 155-mm artillery shells per year at its peak.
The company estimates that the plant will reach full production capacity in 2027. In 2025, it is expected to test produce up to 25,000 shells, in 2026 – 140,000, and in 2027, the capacity will triple.
Large-scale investment and new jobs
The project, worth more than €500 million, is one of the largest defense investments in Germany in recent years. The company has created more than 500 new jobs. The plant has two main buildings: one is responsible for the production of shells, the other for their equipment, assembly and packaging.
According to Rheinmetall CEO Armin Papperger, this is not just a plant, but a “flagship of industrial rearmament” in Europe. He also said that “the company can become the core of a pan-European defense ecosystem.”
The new Rheinmetall plant as part of the EU’s defense renaissance
The opening ceremony was attended by the newly appointed NATO Secretary General Mark Rutte. He noted that Europe currently produces six times more artillery shells than two years ago. By the end of 2025, the total production in the EU will reach more than 2 million units. Rheinmetall will become one of the key players in this market.
The company also plans to expand the plant’s product line: in 2026, it will start producing rocket ammunition and rocket engines.
Read also: Partnership for security: Rheinmetall and Lockheed Martin to produce missiles in Europe together
A plant for 350 thousand shells has been launched in Germany: context
The opening of the plant took place against the backdrop of historically high demand for ammunition in Europe. Rheinmetall expects to increase production from 70,000 to 1.1 million units per year by 2027, which is 16 times more than before the start of the full-scale war in Ukraine.
According to analysts, investments in the production of shells indicate a long-term transformation of the defense budgets of NATO countries. In particular, the German government has already signed a €8.5 billion contract with Rheinmetall to provide the army with shells for several years to come.
Rheinmetall is one of the key players in the defense and automotive industries in Europe
Rheinmetall AG was founded in 1889 in Düsseldorf, Germany, as a manufacturer of ammunition for the German army. The company was initiated by a group of investors who saw the potential in the industrial production of weapons for the young German Empire. Already in the early years, Rheinmetall became the main supplier of shells for the army, and with the outbreak of World War I, the company significantly expanded production.
After Germany’s defeat in the First World War and the restrictions of the Treaty of Versailles, Rheinmetall was forced to reduce military production and switch to civilian goods, including steel products. But in the 1930s, the concern began to work for the defense industry again, first covertly and then openly, with the rise of the Nazis.
During the Second World War, Rheinmetall produced guns, tank weapons, and ammunition, including the famous 88 mm cannon, which was used as an anti-tank and anti-aircraft weapon.
After the defeat of the Third Reich, the concern was dismantled and disbanded. However, in the 1950s, with the onset of the Cold War and Germany’s integration into NATO, Rheinmetall returned to the arms market. In 1956, the company again received a license to manufacture weapons, and in the 1960s, it expanded its activities in the armored vehicles segment.
Gradually, the company diversified its business, creating two key areas: Rheinmetall Defense (weapons, ammunition, control systems) and Rheinmetall Automotive (engine components, automotive electronics, engineering).
In the 21st century, Rheinmetall has become one of the most important defense contractors in Europe. The company is involved in the production of armored personnel carriers (e.g., Boxer), guns for Leopard 2 tanks, air defense systems, and the development of digital combat solutions.
After Russia’s full-scale invasion of Ukraine in 2022, demand for the company’s products increased dramatically. Rheinmetall became a key supplier of ammunition and equipment to Ukraine and other NATO countries. In 2023-2025, the company opened new plants, in particular in Hungary and Germany, and announced plans to set up a joint production facility in Ukraine.
In 2024-2025, Rheinmetall invested more than €1 billion in expanding its shell production, planning to produce up to 700,000 units per year by 2026.
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Rheinmetall’s ties with Ukraine and its contribution to strengthening the country’s defense capabilities
Rheinmetall supplies Ukraine with a variety of military equipment: more than 100 Marder 1A3 armored personnel carriers, as well as Leopard 1A5 and Leopard 2A4 tanks, including recovery tanks and training models.
The company also supplies ammunition: 20-mm, 35-mm (for Gepard and Skynex systems), 105-mm, 120-mm tank shells, mortar and 155-mm artillery ammunition.
Rheinmetall Ukrainian Defense Industry LLC (a joint venture with Ukroboronprom) operates in Ukraine. It maintains, repairs and develops armored personnel carriers in Ukraine.
The company repairs combat vehicles in Ukraine (e.g., Marder, Leopard 1) and plans to repair Leopard 2 tanks in the future.
In addition, the company trains Ukrainian specialists and prepares specialists for repair teams in Germany.
In addition, in 2023-2024, the parties signed an agreement to build several factories in Ukraine to produce artillery shells, military equipment, components, explosives, and air defense systems.
Rheinmetall has also supplied a fully equipped modular field hospital to Ukraine that can be quickly deployed and meets NATO standards.
It should be noted that the concern has supplied Ukraine with Skynex air defense systems equipped with AHEAD ammunition, which is effective against drones and cruise missiles. In addition, Rheinmetall’s participation was used to deploy SurveilSPIRE mobile reconnaissance solutions, including mini-drones and control systems.
In addition, Rheinmetall, together with the Finnish company ICEYE, is creating a company to produce synthetic radar satellites that may have defense applications for Ukraine.
And in February 2025, President of Ukraine Volodymyr Zelenskyy discussed with Rheinmetall’s CEO the launch of joint production of 155 mm ammunition in Ukraine.
Thus, Rheinmetall is actively involved in strengthening Ukraine’s defense capabilities through multilevel cooperation: supplying equipment, training, logistics and repair support, building production facilities, and participating in space and medical projects. The influence of the concern goes far beyond one type of weapon – it is a contribution to the strategic autonomy and security of the country.
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