By Horst Teubert

May 14, 2024


German weapons manufacturer Rheinmetall aims to become a “global player” in the arms sector. Group CEO Papperger envisages a “European systems house” eventually joining the ranks of the big three US defence industry giants.

 DÜSSELDORF – Ahead of this year’s annual general meeting, on 14 May, the Rheinmetall military technology group announced its intention to become a “global player” in the arms industry. Its ambitious plans are rooted in a rapid increase in the demand for weapons and ammunition triggered by the war in Ukraine. The upward spiral in military spending has seen the sales and profits of the Düsseldorf-headquartered arms manufacturer skyrocket. Its weapons and ammunition division was able to boost turnover to 5.69 billion euros last year, generating a profit of 828 million euros – a significant increase on the 2021 figure (491 million euros). With a backlog of orders-in-hand that could reach 60 billion euros by the end of this year, the business appears to be very secure for years to come. A part of the upcoming orders is attributable the German government’s 100 billion euro “special fund” to upgrade the Bundeswehr. For around a third of this military expenditure is likely to flow into Rheinmetall. Group CEO Armin Papperger has wider ambitions for Europe-wide mergers. He is now advocating the creation of “a European systems house” capable of generating annual sales of 30 to 35 billion euros. Rheinmetall could then catch up with US defence industry giants, above all Northrop Grumman, Raytheon and Lockheed Martin. This rapid expansion is driving the growing importance of the arms sector for policymaking and in the wider society.

Ammunition production increased tenfold

Rheinmetall has been pursuing an almost unprecedented growth path since the start of the war in Ukraine. The manufacturing group has, for example, increased its production of artillery ammunition dramatically. While output still stood at around 70,000 rounds in 2021, Rheinmetall factories are now on course to reach an annual production of 700,000 rounds by the end of 2024. In the longer term, as many as 1.1 million rounds per year are planned. The production of tank ammunition alone, which stood at between 20,000 and 30,000 rounds per year before the war, will be ramped up to between 150,000 and 200,000 rounds, claims Group CEO Armin Papperger.[1] This will be made possible by building new factories, such as the one in Unterlüß and production sites abroad. Radviliškis, not far from Šiauliai, was recently identified as a Lithuanian ammunition production facility. Rheinmetall is also setting up a new ammunition factory in Várpalota, Hungary, southwest of Budapest. The company took over the Spanish ammunition manufacturer Expal at the end of 2022.[2] Other new plants are being planned. Thus a factory is being built in Weeze on the Lower Rhine, where fuselage parts for US F-35 fighter jets are to be manufactured from next year. Meanwhile, production volumes are also being ramped up at the company’s existing factories.

Orders in hand have doubled

The soaring production volumes are directly expressed in soaring sales figures. While Rheinmetall’s sales actually contracted from 2019 to 2021 (from 6.26 to 5.66 billion euros), they shot up again to 7.2 billion euros in 2023. Papperger estimates that sales will reach almost ten billion euros this year.[3] For 2026, sales are forecast at around 13 to 14 billion euros, perhaps even more. This surge will come from the steady stream of new orders, leading to a huge backlog to be worked on by the group. Indeed, there is now talk of expected orders worth more than 32 billion euros. Ammunition orders alone are reportedly worth at least 7.1 billion euros. According to Papperger, additional orders worth up to 30 billion euros could be secured this year.[4] “I expect us to have orders in hand worth around 60 billion euros by the end of the year,” announced the CEO recently.[5] This is due in no small part to orders from Germany’s Bundeswehr. The hike in expenditure on the German armed forces is largely being paid for out of the “special fund” of 100 billion euros. According to Papperger, the group will benefit from between 30 and 40 billion of this sum,[6] more than any other arms company.

On a par with arms sector giants?

Building on this momentum, Rheinmetall aims to rise rapidly to the top league of global arms corporations. In 2022, the group was placed 28th in the SIPRI ranking of the 100 largest arms companies worldwide, with military sales put at 4.55 billion US dollars (USD).[7] But by 2023, it had already succeeded in boosting arms and ammo sales to 6.20 billion dollars, while it saw its civil production division rapidly shrinking. Compared to the US arms industry leaders, Rheinmetall has still got miles to go. The arms sales figures for the top three in 2022 were enormous: USD 32.3 billion (Northrop Grumman), USD 39.6 billion (Raytheon) and even USD 59.4 billion (Lockheed Martin). However, Rheinmetall has realistic prospects of catching up with the top continental European groups: Thales (France, USD 9.4 billion in 2022) and Leonardo (Italy, USD 12.5 billion annual). Papperger recently proposed steps towards a merging of operations at EU level or, as he put it, “founding a European system house”. With annual sales of 30 to 35 billion euros, the group would, he said, begin to be on a par with the US market leaders.[8]

Hopes for success in the US market

Rheinmetall has increasingly turned its attention to the world’s largest defence industry market by far – the United States market. Since there is a lag in orders flowing from the German government’s massive “special fund” for revamping the Bundeswehr and Rheinmetall’s sales in its home market, Germany, remained stagnant in 2023 at 1.72 billion euros, the group owes its recent success to sales across the rest of Europe, which rose from 2013 to 2023 by around 50 percent to 3.40 billion euros.[9] Sales in Asia, especially in the Middle East, on the other hand, declined and were only slightly above 800 million euros. Sales in the United States rose from just under 440 million euros in 2000 to almost 600 million euros in 2023 – and are now set to grow dramatically. Last year, a US Rheinmetall team succeeded in reaching the short-list of two in the bidding race for the Pentagon’s successor to the US Bradley infantry fighting vehicle. The other finalist is the US company General Dynamics. Detailed planning for this new vehicle models has now begun. The two teams will build and test up to eleven prototypes of this combat vehicle.[10] The Pentagon’s decision is expected by the end of 2026, potentially leading to a huge contract of around 45 billion US dollars.

The influence of the defence industry

 With the rapid growth of Rheinmetall and other German armourers, we are seeing the German “defence industry” becoming ever more important to the overall economy. According to a report by the Cologne-based Institute for Economic Research (iwd), the arms sector employed around 55,500 people in 2020 and generated sales of just under 11.3 billion euros,[11] which at the time constituted 0.33 per cent of German GDP (gross domestic product). However, the true figure must include the manufacturers of dual-use products and suppliers of non-military products to arms companies for further processing. As for the direct production of weapons, ammunition and military combat vehicles in 2020, the number of people working here came to around 23,000. The example of Rheinmetall shows how much the workforce employed to produce arms has increased recently: while around 10,100 people were working in the company’s weapons and ammunition division in 2013, this figure had risen to almost 15,600 by 2023 – and the upward trend will continue.[12] This trajectory has repercussions well beyond Rheinmetall, as the political and social influence of the arms sector increases.


[1] Björn Finke, Thomas Fromm: „Wir sind keine Kriegsgewinnler“. Süddeutsche Zeitung 11.05.2024.

[2] See also: “Wie die USA im Zweiten Weltkrieg“.

[3] Rheinmetall sieht sich auf dem Weg zum „Worldwide Player“. 03.05.2024.

[4] Roman Tyborski, Christoph Schlautmann: Rheinmetall ist auf dem Weg zum europäischen Rüstungsgiganten. 13.05.2024.

[5] Rheinmetall sieht sich auf dem Weg zum „Worldwide Player“. 03.05.2024.

[6] Björn Finke, Thomas Fromm: „Wir sind keine Kriegsgewinnler“. Süddeutsche Zeitung 11.05.2024.

[7] The SIPRI Top 100 Arms-Producing and Military Services Companies, 2022. Solna, December 2023. See also: Vor dem Rüstungssturm.

[8] Rheinmetall sieht sich auf dem Weg zum „Worldwide Player“. 03.05.2024.

[9] Umsatz der Rheinmetall AG nach Regionen von 2013 bis 2023. 14.03.2024.

[10] Milliardenschwerer US-Panzerauftrag: Rheinmetall kommt in Endauswahl. 07.08.2023.

[11] Deutsche Rüstungsindustrie: Eine Branche im Umbruch. 29.03.2022.

[12] Roman Tyborski, Christoph Schlautmann: Rheinmetall ist auf dem Weg zum europäischen Rüstungsgiganten. 13.05.2024.