Sharing the News: Arms Industry in Rhineland-Palatinate
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Business Ventures in Rhineland-Palatinate's Defence Sector: Potential for Companies
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In the heart of Rhineland-Palatinate, lies a small but influential arms industry. With just a handful of companies, this sector produces a variety of products that are used worldwide by armies and security forces. Ranging from small-caliber ammunition to heavy-duty mobile bridges, these products play a crucial role on battlefields and throughout military operations. However, this industry represents a minor portion of the state's economic growth and national standing, earning the label of a "niche existence."
Nevertheless, a shift in the security policy and military spending could bring about significant changes for this sector. Last week, a forum in Mainz focused on the "Security and Defense Industry Rhineland-Palatinate" for the first time, attracting over 170 companies and guests eager to discuss potential opportunities. This marks a new era for the industry, breaking away from its previous focus on specialized trade fairs and moving towards a more refined and salon-worthy image.
Networking Opportunities and Expertise Building
The two-hosts of the forum, Minister of Economics Daniela Schmitt (FDP) and Annette Lehnigk-Emden, President of the Bundeswehr Procurement Office in Koblenz, emphasized the need for networking, expertise building,, and value creation. With the growing interest in the industry, companies from various sectors will have the opportunity to explore if they can find a place in the arms sector at this Mainz event.
Matthias Witt, head of the consulting firm WIMCOM – considered the largest German consulting firm in the military sector – confirms the increasing interest in the sector. He reports receiving more inquiries from companies in the past ten years since the founding of WIMCOM. The expert attributes this influx to the so-called special funds for the Bundeswehr provided by politics, with particular interest coming from the ailing automotive industry and other sectors like logistics and metalworking. Witt believes this surge is not a mere "flash in the pan."
Arms Industry in Koblenz
The Bundeswehr Procurement Office in Koblenz has attracted surrounding businesses to form a mini arms center in Rhineland-Palatinate. Although companies typically have only offices or smaller departments located there, there are several German companies maintaining equipment for the American military bases in Ramstein and Spangdahlem.
Leading Players in the Rhineland-Palatinate Arms Industry
- Daimler Truck with its defense division in Wörth specializes in military vehicles, even though their military vehicle output remains relatively low. They've recently seen impressive order volumes, including a $216 million deal with Lithuania for over 480 vehicles.
- General Dynamics subsidiary GDELS in Kaiserslautern is a specialist in mobile bridges and amphibious vehicles. After the Russian attack on Ukraine, the company has seen a significant increase in demand and plans to hire more employees.
- MEN Metallwerk Elisenhütte, a munitions manufacturer in Nassau, is one of the largest ammunition factories in Germany. They produce cartridges for the G36 assault rifle, Browning machine guns, and are the largest German supplier of police ammunition.
- Lausberg, a weapons packaging specialist in Nassau, has a long tradition in the defense industry. They produce wooden boxes for weapons like the Panzerfaust and the rocket, with stringent safety requirements.
- Other players in this industry include service providers and cybersecurity companies.
The Bundeswehr and US Forces
Rhineland-Palatinate is home to 18 military locations with 14,000 soldiers. Unlike before, the Bundeswehr now aims to reactivate old barracks instead of demolishing them. Additionally, Rhineland-Palatinate hosts approximately 38,000 US soldiers, around 9,000 of whom work for the associated US forces.
Daimler Truck in Wörth has been focusing on growth in the defense sector, with the military vehicle production percentage still in the low single-digit range. The company expects further expansion in order to cater to increased demands in the defense sector.
Despite the niche existence of the arms industry in Rhineland-Palatinate, recent events have signaled a potential growth period. The shift towards a more refined and professional image, as observed at the "Security and Defense Industry Rhineland-Palatinate" forum, has attracted interest from companies traditionally not involved in this sector (Technology companies might find new opportunities in this changing landscape).
Moreover, the increasing interest in the defense sector and the so-called special funds for the Bundeswehr has been confirmed by Matthias Witt, head of the consulting firm WIMCOM, who reports reception of more inquiries from technologically advanced industries like logistics and metalworking (Technology companies with expertise in logistics or manufacturing could find promising prospects in this expanding sector).
