Rheinmetall has announced its acquisition of Hagedorn-NC, a German manufacturer of industrial nitrocellulose, as part of its strategy to enhance the supply of raw materials for artillery propellant. This move is indicative of a broader trend among European nations and companies striving to secure and expand their ammunition and explosives production capabilities.
In the coming months, Rheinmetall intends to transition Hagedorn-NC’s production to focus on military-grade cellulose, while still servicing existing civilian clients “for the time being,” according to a statement released on Monday. The company emphasized that this acquisition addresses a critical gap in the supply chain.
Rheinmetall’s CEO, Armin Papperger, stated, “The acquisition helps us to overcome a strategic bottleneck in propellant production,” highlighting its significance as a vital source of raw materials that supports vertical integration throughout the entire ammunition production value chain.
The urgency for increased artillery ammunition production has surged since Russia’s invasion of Ukraine in 2022, prompting industry stakeholders and the European Union to invest over €1.5 billion ($1.6 billion) to enhance capacity for explosives, propellant, and shells. The EU anticipates that by 2025, the bloc will produce 2 million artillery shells, a significant increase from an estimated annual capacity of just 230,000 rounds in early 2023.
Nitrocellulose is essential for creating charges that propel modern artillery shells over long distances. Rheinmetall aims to ramp up its production capacity to manufacture up to 1.1 million 155 mm artillery shells annually by 2027, with Hagedorn-NC becoming its fourth nitrocellulose production facility alongside existing plants in Switzerland, Spain, and South Africa.
This acquisition follows Czechoslovak Group’s recent purchase of the nitrocellulose business from U.S.-based International Flavors & Fragrances in Germany, which also aims to expand nitrocellulose production for ammunition.
The process of producing nitrocellulose involves converting cotton linters or wood pulp using nitrating acids. Since April 2022, the EU has prohibited the export of nitrocellulose and its precursor materials to Russia.
Rheinmetall’s acquisition is pending antitrust approval but is expected to solidify its position as a leading supplier of large-caliber ammunition within NATO while ensuring a reliable supply of essential components. The company has not disclosed specific financial details regarding the deal but noted that it would add approximately 90 employees at Hagedorn-NC.
As Europe responds to heightened military demands following Ukraine’s shell shortages and NATO’s challenges in supplying adequate ammunition, new production capacities are being established across the continent. Recent developments include France restarting explosive powder production at Eurenco and Poland committing around 3 billion zloty ($760 million) towards local ammunition manufacturing.
Rheinmetall currently produces nitrocellulose through its joint venture Nitrochemie in Switzerland and at facilities in Spain and South Africa. Hagedorn-NC operates out of Osnabrück with a production site in Lingen, primarily focusing on industrial applications such as lacquers and printing inks.
