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Rheinmetall to establish armored vehicle plant in Ukraine, defying concerns amid conflict with Russia


In a bold move, Rheinmetall, Germany’s largest arms manufacturer, has announced its plans to open an armored vehicle plant in Ukraine within the next 12 weeks, dismissing concerns raised by other Western defense companies about establishing a presence in the country while it is engaged in a conflict with Russia. The CEO of Rheinmetall, Armin Papperger, revealed this information in an exclusive interview with CNN on Thursday.

The new factory, set to be located in the western part of Ukraine, will not only manufacture tanks and other armored vehicles but also serve as a training center for Ukrainians to learn maintenance and repair skills for the vehicles produced there. Papperger emphasized the importance of Ukraine’s self-reliance, stating that waiting for assistance from Europe or the United States for the next decade or two is not a feasible option.

Rheinmetall aims to establish a battle tank factory worth €200 million ($218 million) on Ukrainian soil, with a production capacity of approximately 400 tanks per year, as previously reported by Rheinische Post. Papperger further revealed that the factory workers will also be responsible for building and repairing Rheinmetall’s Fuchs armored personnel carriers under license.

The partnership to operate the plant has been formed between Rheinmetall and Ukroboronprom, a Ukrainian state-owned defense group. Ukroboronprom will own the facility, and the two companies previously announced an agreement to enhance Ukraine’s defense technology capabilities. There have been reports that former Russian President Dmitry Medvedev, a close ally of current President Vladimir Putin, has threatened retaliation against any Rheinmetall facility established in Ukraine. However, Papperger expressed confidence that the factory could be protected in the event of a Russian attack, citing the presence of numerous military goods manufacturing facilities in Ukraine.

While Ukrainian forces have faced challenges in making significant progress in their counteroffensive due to Russian air superiority, Papperger stated that Rheinmetall’s current focus is on sourcing more ammunition rather than increasing tank production. The company plans to boost its annual production of artillery rounds from 100,000 to 600,000 next year, with a considerable portion designated for delivery to Ukraine. In fact, Papperger suggested that Rheinmetall could potentially supply 60% of Ukraine’s artillery ammunition needs.

Papperger also stressed the need for increased defense spending by NATO member states, highlighting that Germany’s commitment to allocate 2% of GDP on defense by 2024, in line with NATO targets, may not be sufficient to protect the alliance from a potential Russian attack. He advocated for raising the target to 3% of GDP, stating that Europe needs time to replenish its ammunition stocks, which are currently depleted.

Recently, German lawmakers provisionally agreed to a €6 billion ($6.5 billion) ammunition purchase from Rheinmetall, with a portion of it intended for Ukraine. Papperger noted that agreements, which previously took two to three years to finalize before the conflict in Ukraine, can now be reached in as little as four months, describing the shift as a game changer.

As this development unfolds, will closely monitor the establishment of Rheinmetall’s armored vehicle plant in Ukraine and provide updates on the evolving situation. The decision to proceed with this venture amidst ongoing tensions underscores the complex dynamics and interests at play in the region.

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