Rheinmetall announced the acquisition of the German company Hagedorn-NC, a company specialized in the production of nitrocellulose for industrial use. The operation aims to strengthen the supply chain of strategic raw materials for the production of propellants intended for artillery, in a European context marked by a strong increase in demand for ammunition and explosives.
Nitrocellulose is an essential component for the creation of modular charges, which allow projectiles of 155 mm to be launched over distances exceeding 40 kilometers. With the war in Ukraine still ongoing, the demand for heavy ammunition has skyrocketed, pushing governments and companies to invest in production capacity and supply security.
According to the statement, Rheinmetall intends to convert Hagedorn-NC's production to military-grade nitrocellulose in the coming months, while temporarily keeping civilian supplies active.
«The acquisition allows us to overcome a strategic bottleneck in the propellant production chain», said Armin Papperger, CEO of Rheinmetall.
«We secure an essential source of raw materials and continue vertical integration along the entire ammunition supply chain».
The European Union estimates reaching an annual production of 2 million artillery shells by 2025, compared to just 230,000 rounds in 2023. The push also comes from joint initiatives between industry and institutions to increase European defense resilience.
Rheinmetall, one of the main European producers of large-caliber ammunition, aims to reach a production capacity of up to 1.1 million 155 mm shells per year by 2027. With the integration of Hagedorn-NC, the company will have a fourth nitrocellulose production site, alongside those already operational in Switzerland (Wimmis), Spain (Murcia), and South Africa (Wellington).
The acquisition comes at a time when all of Europe is mobilizing to fill production gaps in the defense sector. In France, for example, the production of explosive powder has been reactivated at Eurenco in Bergerac, while Denmark has entrusted the Norwegian company Nammo with the restart of an ammunition factory closed in 2020.
Poland has also invested heavily in the sector, allocating about 3 billion zloty (760 million dollars) to local ammunition production, particularly 155 mm shells. An agreement with Grupa Azoty and Polska Grupa Zbrojeniowa provides for the construction of new plants for nitrocellulose and propellants.
The acquisition of Hagedorn-NC by Rheinmetall fits into a context of increasing vertical integration in the sector. In parallel, the Czech group Czechoslovak Group (CSG) acquired the nitrocellulose business of International Flavors & Fragrances in Walsrode, Germany, with the intention of expanding military production beyond the industrial one, already destined for paints and enamels.
Nitrocellulose is produced through the nitrification of cellulose, derived from cotton linters or wood pulp. Since 2022, the EU has banned the export of nitrocellulose to Russia, extending the ban to cotton pulp in June 2023, to prevent critical components from falling into hostile hands.
The acquisition of Hagedorn-NC is currently subject to antitrust approval, but Rheinmetall has confirmed that the operation will strengthen its role as a key NATO ammunition supplier, ensuring an autonomous and secure supply chain.
The company has not provided financial details of the operation, nor has it specified the future production capacity of the acquired site. However, according to initial information, the integration will lead to the addition of about 90 new employees to the Rheinmetall group, while the Walsrode site managed by CSG already employs over 350 people.
In conclusion, the growing demand for artillery ammunition, the strengthening of European defense policies, and the need for industrial autonomy are reshaping the European defense production landscape. Operations like Rheinmetall's on Hagedorn-NC confirm that the future of European security will also depend on the ability to control every link in the chain, from raw material to finished projectile.
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