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PARIS — European policymakers should urgently provide funding to increase production of the propellants and explosives needed to make 155mm artillery shells, ammunition makers Nammo and KNDS said at the Eurosatory defence exhibition in Paris.
“The reaction from the industry is to hurry up,” Namo CEO Morten Brandtsag said in response to a question at a roundtable about the need for European Union funding beyond the 500 million euro ($536 million) ASAP program. Assigned in March“This needs to be done as soon as possible.”
Expanding production of shells to defend Ukraine against a Russian invasion amounts to “industrial warfare” and he is concerned about the time lag required to ramp up production, NAMO’s CEO told Defense News on the sidelines of the roundtable.
The EU said its annual production capacity of 155mm shells reached 1 million in January, but the coalition had delivered just over half of the 1 million it had promised to Ukraine by March. The European Commission said the ASAP program will help Europe reach an annual production capacity of 2 million shells by the end of 2025.
According to Dominique Guillet, vice president for ammunition at KNDS, requirements to further increase raw material production have already been identified as part of ASAP, and if the European Commission were to decide on an additional €200 million investment, for example, no new tender would be necessary: ”We know what is needed, we just need to make a decision.”
Besides fundraising capacity, companies also need to consider research and development funding, Guillet said, adding that long range and accuracy will be important for future weapons, and that loitering munitions are also a new development to consider.
Thierry Franck, CEO of French artillery fuel maker Eurenco, said the industry also needed to consider “the peak and the end of mass production” and how to manage new assets after that.
Branzeig said he “fully supports” balancing demand, for example so that one European country has large stocks of explosives and another has ample capacity to load warheads. But Namo’s CEO warned against consolidation in the industry, and both Guillet and Francoux questioned further concentration in the European ammunition industry.
“Now is not the time to consolidate what is missing,” said Branzag. “We have a few players in Europe. We should be increasing the size of the few players, not reducing the number of players.”
Prices for 155mm shells produced in Western Europe range from a low of $5,000 to more than $10,000 for premium ammunition, industry executives who attended the roundtable told Defense News.
Ammunition makers are facing rising supply chain costs due to increased demand for machinery and rising energy prices, which are putting a “huge strain” on them, Francoux said.
“The price of all machines is rising, and this applies to everyone in this room,” Frankow said. “To give you one example, we are accepting high payments to get ahead, to accelerate investment. We could do it cheaper if we had more time, but that’s three years away. After all, what is the price of acceleration now?”
The price of small-caliber ammunition has also doubled. “That’s what the market has been like for the last five years,” Francoux said.
Namo’s Branczag said the price hike was not only due to the war in Ukraine, but had already started due to the COVID-19 pandemic, and that setting up a new ammunition factory would take two to three years.
Rudi Luitenberg is Defense News’ European correspondent. He began his career at Bloomberg News and has experience covering technology, commodity markets and politics.
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