What began as rumors last year has now become reality: Rheinmetall has formally moved forward with the purchase of German Naval Yards Kiel (GNYK).
By Lars Hoffman / Hartpunkt
Rheinmetall’s new naval division, formerly NVL, has submitted a non-binding offer for GNYK, as Rheinmetall CEO Armin Papperger announced yesterday at an analyst conference held by the defense company. A due diligence process has been initiated, the results of which are expected in the coming weeks. Based on this, a binding offer can be submitted. The aim is to increase Rheinmetall’s own production capacity, Papperger said. In addition to Rheinmetall, Germany’s largest naval shipbuilder, TKMS, is also interested in GNYK and submitted a non-binding offer at the beginning of the year. GNYK is currently located at the TKMS shipyard.
According to Papperger, major orders are expected for the naval division this year. These include the modernization of the Type 125 frigates and a bid submitted for the new F126 frigates. The company possesses the technical capabilities to implement the latter project. Furthermore, there is potential for international expansion, for example in Romania, the Rheinmetall CEO stated.
According to a report in the Financial Times, the bid for the six F126-class ships is expected to be worth approximately €12 billion. This figure includes an additional €2 billion already invested in the project. The Dutch shipyard Damen Naval has been the prime contractor until now. However, Damen has failed to deliver on its contractual obligations, leading to Rheinmetall taking over project leadership. Rheinmetall states that the ships could be delivered no earlier than 2031 or 2032, assuming streamlined acceptance procedures.
According to Papperger, however, there will be no order placed this year for the Type 127 frigate, as the Ministry’s resources are insufficient for such a large undertaking. NVL and TKMS established a joint venture for the construction of the F127, with TKMS holding the majority stake. Reportedly, the costs for the F127 project could be higher than previously estimated. The expenses for the Aegis command and control system, sensors, electronics, and launchers—all manufactured in the US—for the eight planned ships alone would amount to nearly 12 billion US dollars.
As the Rheinmetall CEO further explained in the analyst conference, he also sees great potential in the collaboration with the Kraken Technology Group. He had visited the production line for the Kraken boats in Hamburg and is very optimistic about increasing output to over 200 boats per year. The goal is to increase production to 500 systems of various boat classes per year.
The initial offerings will be boats eight to ten meters in length; a twelve-meter class and larger boats are also available. Papperger anticipates a similar long-term development in naval warfare as in air warfare: Each F-35 will likely be accompanied by five to seven unmanned aerial vehicles in the future. A similar development is expected in the naval sector. Given the anticipated order intake, Papperger reaffirmed the goal of increasing naval revenue to €5 billion by 2030.
This article by Lars Hoffman was originally published in German language at hartpunkt.de. It has been translated and republished with authorization.