RHEINMETALL DENEL MUNITION: Ambitious RDM on Aggressive Growth Journey
Hoping to work on a major new contract, and growing through acquisition, Rheinmetall Denel Munitions is in a good place where demand is outstripping supply. The company is innovating and investing to enhance output while developing a reputation for world-class expertise.
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In a seemingly more unstable world than at any point in the last 30 years, the need for certainty and reliability is strong. As countries around the world beef up their security provision, many look for proven and predictable partners to assist in the deployment of technology that bolsters security.
From technological innovations, software, digital and AI products, through to weapons, ammunition, and mobility systems, Rheinmetall is a proven player in the defence space. Headquartered in Germany, but with a strong presence around the world including in South Africa, this is a company that can deliver what others cannot – trust.
“Rheinmetall is taking responsibility in a changing world. As an integrated technology group, we are in an excellent position to help shape the changes in the markets and achieve our ambitious medium-term goals for sustainable, profitable growth,” explains Chairman, Armin Papperger.
In South Africa, the company is well known for its time as Denel, the former state-owned enterprise for defence. When Denel hit hard times in 2008, Rheinmetall acquired the business and Rheinmetall Denel Munitions (RDM) was established. Today, the company is a specialist manufacturer and distributor of large- and medium-calibre ammunition and artillery, mortar and infantry systems as well as plant engineering.
Focused on delivery for the South African military forces and the armed forces of other African countries, RDM can also supply into the Middle East, South America, and Asia.
BOOMING GROWTH
Previously, the company had concentrated on an initiative to green its manufacturing process by investing in a solar park that can supply 4.2 million watts from 10,000 solar modules. That investment is already hailed as a success, and CEO Dr Frank Dirksen expects further growth in the next 12 months.
“Rheinmetall Denel Munition is on a growth path, continues to serve as a strategic global partner, and actively contributes to developing defence technology in South Africa. The Rheinmetall Group continuously invests in increasing Rheinmetall Denel Munition’s production capacity in response to the escalating demand for defence goods. We have started expanding within Rheinmetall Denel Munition, including acquiring land to expand one of our operations. We expect our growth to double by the end of 2025,” he says.
Currently, the company is at home in Somerset West, with operations across Boskop, Boksburg, and Wellington. Employing around 2000 people, and supporting 1500 domestic suppliers, RDM is a driver of economic growth.
“We are committed to investing in innovation and product development, ensuring we maintain a competitive edge in defence technologies. RDM is dedicated to investing in cutting-edge technology establishments to sustain its industry capabilities and deliver state-of-the-art ammunition.”
The business has gained a major opportunity to showcase its skills as it will participate in a group project to supply munitions to the Bundeswehr (German armed forces). In a deal signed in June 2024, the agreement was made for Rheinmetall to supply 155mm artillery munitions worth €8.5 billion. The German forces are restocking the arsenal while supplying support to the Ukrainian military effort. The Netherlands, Denmark, and Estonia are also part of the deal. South Africa will likely manufacture a portion of this order, building on its already strong commitment to European supplies where it manufactures ammunition for the Hungarian military.
“We are delighted about the largest order in our company’s recent history,” said Papperger. “This large-volume framework contract underlines Rheinmetall’s leading role as an ammunition supplier in Germany and our position as the world’s largest manufacturer of artillery ammunition. We highly appreciate the great trust that is expressed in this long-term order as part of the security provision of the Federal Republic of Germany and its allies.”
Deliveries will begin in 2025 and the wars in Ukraine and the Middle East have underlined immense global demand for ammunition. This is why RDM is keen on further expanding its presence in South Africa, relieving pressure on existing infrastructure, which sees 24-hour shifts running continuously to produce more than 100,000 shells per year.
ACQUISITION EXPECTED
In August 2024, RDM announced that it would acquire Resonant Holdings, a specialist in chemical applications and plant engineering. Rheinmetall Waffe Munition GmbH will hold 51% of the shares in a newly formed joint venture Rheinmetall Resonant South Africa. This move shows the company’s willingness to adapt to a new global reality where demand for ammunition is soaring, and facilities to manufacture simply cannot keep up with demand.
“The partnership offers Resonant a strong global reach, industry expansion and access to new markets,” RDM revealed. “The combined expertise of both entities will drive innovation and efficiency, delivering unparalleled value to customers. Rheinmetall aims to preserve the company’s existing technology and workforce.
“The planned acquisition of Resonant Holdings underscores Rheinmetall’s dedication to expanding its technological capabilities and delivering state-of-the-art solutions to its partners,” RDM added. “This strategic acquisition of the controlling stake ensures that Rheinmetall remains at the forefront of innovation in the engineering and defence industries, providing unparalleled expertise and comprehensive solutions.”
Resonant was founded in 1999 and works as a consultancy with expertise across nitrogen oxide reduction, desulphurisation, dust control, green energy, waste energy recovery and other solutions, operating in the metals, minerals, chemicals, oil and gas, and infrastructure sectors.
When this new capability is added to the portfolio, RDM will have a wide-ranging and unique product and service portfolio, backed up by a strong local base of suppliers, and growing demand. The company is a long way away from the organisation that Rheinmetall purchased in 2008, and the South African economy is benefitting.
“At Rheinmetall Denel Munition, our primary focus is advancing defence technology to safeguard nations’ sovereignty and enhance national security. We are committed to investing in innovation and product development, ensuring we maintain a competitive edge in defence technologies,” says Dirksen.
“RDM is dedicated to investing in cutting-edge technology establishments to sustain its industry capabilities and deliver state-of-the-art ammunition.”