Rheinmetall to build, repair tanks in Ukraine, says CEO

Rheinmetall will open an armoured vehicle plant in Ukraine within the next 12 weeks, shrugging off concerns other Western defence companies reportedly have about building a presence in the country while it is at war with Russia.

Germany’s biggest arms maker will also train Ukrainians to maintain the tanks and other armoured vehicles made in the factory, which will be located in the western part of the country, CEO Armin Papperger told CNN in an exclusive interview on July 6.

“[Ukrainians] have to help themselves — if they always have to wait [for] Europeans or Americans [to] help them over the next 10 or 20 years… that is not possible,” he said.

The company told the Rheinische Post newspaper earlier this year that it hoped to open a €200 million ($218 million) battle tank factory on Ukrainian soil, capable of producing about 400 tanks a year.

Papperger said on Thursday that factory workers would build and repair Rheinmetall’s Fuchs armoured personnel carrier — named after the German word for fox — under license in the facility.

Rheinmetall (RNMBF) will operate the plant in partnership with Ukroboronprom, a Ukrainian state-owned defence group, which will also own the facility. In May, the companies announced an agreement to boost Ukraine’s “defence technology capacities.”

Former Russian President Dmitry Medvedev, a close ally of current President Vladimir Putin, has said Russia would retaliate by hitting any facility Rheinmetall set up in Ukraine, Reuters has reported.

Papperger said that the factory could be protected from a Russian attack.

“There are a lot of factories at the moment which are producing military goods [in Ukraine]. It is just another one — and we can protect that also,” he said.

Ukrainian forces have struggled to make major gains in their counteroffensive launched a month ago, in part, because of the Russian army’s air superiority.

For now, Papperger said, sourcing more ammunition was a bigger priority than building more tanks.

Rheinmetall would ramp up its annual production of artillery rounds from 100,000 to 600,000 next year, and much of that extra output would be earmarked for delivery to Ukraine, he said.

In theory, he added, Rheinmetall could provide 60 per cent of the artillery ammunition Ukraine needs.

"Game changer"

Germany said last week that it plans to spend 2 per cent of gross domestic product on defence starting in 2024, in line with a target NATO has set for all member states. But Papperger said that didn’t go far enough to protect the alliance from a potential Russian attack.

At a minimum, he said, NATO should raise its target to 3 per cent of GDP, adding that Europe would not be ready to defend itself properly in an armed conflict with Russia.

The region has “to invest more and we need some years to fill stocks [of ammunition] because, at the moment, the stocks are empty,” he said.

Last week, German lawmakers provisionally agreed to buy €6 billion ($6.5 billion) worth of ammunition from Rheinmetall, with some of that set aside for Ukraine, Papperger said,

And, whereas Rheinmetall could expect to spend two or three years thrashing out a deal with the government before the war in Ukraine, agreements are now tied up in as little as four months.

“It’s a game changer,” he said.