RHEINMETALL DENEL MUNITION: RDM Targets Further Global Growth
South Africa’s Rheinmetall Denel Munitions is taking market share as purchasing of defence products increases all over the globe. An industry leader in manufacturing, with a long history in SA, RDM is a key player for the local economy and for its international partners.
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The world’s largest weapons exporters include the US, Russia, France, China, Germany and more top economies. With exports going around the world to important markets including Saudia Arabia, Australia, and Japan, the opportunity is big for those that can demonstrate quality, reliability, and price sensitivity. At a time of such uncertainty across the world, and conflicts flaring up quickly and at scale, the defence market stands as a vital contributor to national security as nations look to enhance their presence.
But it’s not always the obvious exporters who have the best products. It’s not necessarily the traditional markets – well-known for defence equipment manufacturing – who can be flexible and tailor bespoke offerings.
From South Africa – a country responsible for R3.3 billion worth of weapons exports in 2021, according to the National Conventional Arms Control Committee (NCACC) – its market share is relatively small. But this is changing as the demand for weaponry alters in its nature and timeframe.
In the first half of 2023, South Africa experienced significant growth in exports, reaching R3.8 billion for munitions alone citing the rise in military spending globally following Russia’s invasion of Ukraine.
Central in the country’s increase in presence is Rheinmetall Denel Munition (RDM). The company is an industry leader in the research, design, development, and manufacturing of ammunition, artillery, mortar and infantry systems.
RDM’s roots are deep in South Africa. The company’s history goes back a long way to the days of Denel – a state-owned business that supplied the South African National Defence Force (SANDF) with military hardware, support, and other services. Parts of the Denel business date back more than a century and come from a focus on explosives for the mining industry. Through history, a number of brands developed to service this and other sectors, and in the 1970s and 1990s different consolidation programmes saw businesses merged to create Armscor Procurement Agency of the Department of Defence and Denel. Responsible for the manufacturing capability of the defence industry in South Africa, Denel’s ability was unrivalled in Africa and the group began to build its presence at global scale. But the company ran into financial and operational challenges through the early 2000s, and in 2008 German technology and systems suppler Rheinmetall purchased a stake from Denel to revitalise the munitions business and bolster its ambitions for global dominance.
Following the deal, which saw RDM split 51/49 between Rheinmetall and Denel as a state-owned enterprise, investment was penned by both parties and technology expertise shared to bring global best practice to five facilities across South Africa.
Today, the company is a centre of excellence for manufacturing and has produced a number of world-firsts in the competitive and crowded international market.
INNOVATORS
In 2019, RDM was in the record books when it successfully tested various munitions across the longest range ever attained. A G6 howitzer 52-calibre gun with a conventional 155 mm artillery round travelled 76 km, a PzH 2000 52-calibre gun launched a self-propelled shell 67 km, and a field howitzer with a 39-calibre gun achieve 54 km. This success led to a number of fresh contracts as the company looks to establish long-term relationships.
In December 2022, RDM agreed a multimillion contract with a NATO member to supply 155mm artillery ammunition from its Assegai range. Able to be fired from any NATO STANAG-compatible artillery system, the Assegai range is popular because of its power and flexibility. Under a five-year framework, RDM will supply 155mm M2005 V-LAP (Velocity Enhanced Long Range Artillery Projectile) projectiles, M92 modular charges and various fuses.
“We are proud to support our long-time NATO partner with Rheinmetall’s world-leading long-range artillery suite. Framework agreements provide long-term ammunition supply assurance and a flexible system for procuring ammunition over the course of a year. The rocket assist V-LAP together with the tactical assegai charges M92 with barrel wearer reducer and muzzle flash reducer will support both the soldiers in the battlefield and the logistics and maintenance troops,” said former CEO Jan-Patrick Helmsen.
In January 2023, the company announced a new partnership with the Hungarian state to supply plant technology for a new explosives plant in Várpalota in the west of the country. Another multimillion Euro contract will see Rheinmetall and a state-owned entity of Hungary operate the plant with production beginning in 2027. When the plant is complete and fully operational, the expectation is that Rheinmetall AG will become a primary customer. Products will include artillery, tank, mortar ammunition and more.
These contract awards come off the back of agreements with the Spanish military in 2022 and the Dutch armed forces in 2021 which buoyed production in SA facilities and fuelled the local supply chain including materials, logistics, and labour.
But sustainability is essential and the company is looking at innovation to keep it at the cutting edge from a product and process perspective. Where competition has made some advances in V-LAP technology, RDM is readying a new system which will see increased range. Ramjet-powered 155mm artillery will give a range of 155 km using an air compression engine system to act more efficiently than rockets, at a reduced price. With refinement still required, the ramjet system is an exciting development for the long-range class, and RDM is leading the way with research and testing.
SUSTAINABILITY
In processes, the energy usage to manufacture high-power goods in South Africa is a concern. Loadshedding is part of life and there is no escaping the Eskom difficulties, unable to deliver consistent electricity supply to all parts of the economy. So, RDM is taking action by implementing a solar energy project at its site in Somerset West in the Western Cape.
In June 2023, the company broke ground on the development which will produce 4200 KW of AC current from around 10,000 solar modules. This power will fuel the entire plant and feed surplus energy back to the national grid. Rheinmetall has released a target to reach carbon neutrality by 2035 and this project backs up a project to produce and export green hydrogen.
“The solar park will lay the groundwork for forward-looking new fields of business for the Somerset West plant, further expanding the company’s position in global markets while simultaneously benefitting people everywhere by helping to protect the climate and contributing to a sustainable future,” said Helmsen.
At the same time as protecting the environment and taking steps to be more effective in mitigating against climate change, RDM is also thinking of sustainability internally. The company, like all others in SA manufacturing, requires a skilled workforce now and in the future. To ensure a strong set of local skills, helping people to develop themselves, RDM has invested in a Career Community Centre in Macassar, close to Somerset West. Technology and connectivity, as well as advice and training for job seekers, will help those in the area to be effective in a challenging job market.
“Rheinmetall is happy to be supporting our neighbours in Macassar with a fully-fledged Career Centre. Its mission is to equip job seekers with the skills they need to compete in the labour market,” said Helmsen.
Capping off a good year, the company displayed capabilities at the Lohatlha Combat Training Centre in the Northern Cape in December when it fired off 30-year-old refurbished mortar rounds. As part of a project – Exercise Vuk’uhlome 2023 – with the SANDF, RDM showed its ability to take munitions that have moved beyond A-grade and ensure they still have life by re-engineering to save money while providing expected performance. New CEO Dr Frank Dirksen said RDM would continue to work with the SANDF as a reliable and trusted partner as the company and country grows in importance during tough, confusing, and unpredictable economic conditions.