Booming Defense Spending: Rheinmetall Aims for €40 Billion by 2030
Backlog in orders may erase $40 billion in revenue soon.
The ongoing conflict in Ukraine and new US administration pushing for higher defense expenditures have sparked an arms race among western nations. And Rheinmetall, a German defense giant, is set to cash in big. With rapid growth on the horizon, the company's CEO, Armin Papperger, forecasts turnover surpassing €40 billion by 2030 – a leap from the €9.7 billion registered in 2024.
Rheinmetall's military division is gearing up for a boom, with a projected 35% to 40% increase in sales. Orders from Germany's military alone have skyrocketed over 180%, resulting in an overwhelming order intake of €11 billion.
The company aims to create more than just weapons; they're venturing into the world of space. Neuss, Rheinmetall's factory town employing about 1,500 people, is expected to start manufacturing satellites from 2026. However, the future of the company's civilian division could be in flux as it grapples with falling sales and potential divestment.
Rutte and the Defense Spending Uptick
The international arms industry is witnessing a comeback due to the Ukrainian conflict and Donald Trump's pro-military policies, especially as NATO strives to increase defense expenditures. Mark Rutte, NATO's secretary-general, recently discussed growth prospects for Rheinmetall, encouraging members to reach a defense spending target of 3.5% of their respective GDP – a significant increase from the current 2%. This uptick in spending could result in a staggering €300 billion investment in arms production by European countries and the EU by 2030.
Rheinmetall's Eye on Satellites and Collaborations
Considering redirecting part of its civilian production capacity to military manufacturing, Rheinmetall has formed a joint venture with the Finnish company ICEYE to produce satellites. The company could also acquire idle plants from automotive powerhouses like Volkswagen if the conditions are favorable. A key player in the joint venture with US giant Lockheed Martin, Rheinmetall anticipates making €5 billion annually producing missiles like ATACMS or Hellfire in Germany.
Sources:- ntv.de- als/rts
- Rheinmetall
- Ukraine Conflict
- Defense Industry
- NATO
- Mark Rutte
- Military Budgets
- Space Technology
- Joint Ventures
- Acquisitions
- In light of the increasing defense spending following the Ukraine conflict and the push from the new US administration, Rheinmetall, with its foray into space technology, sees potential growth exceeding €40 billion by 2030.
- The defense industry, including Rheinmetall, is seeking collaborations and acquisitions, such as the joint venture with ICEYE for satellite production, and potential acquisition of idle plants from automotive companies like Volkswagen.
