Rheinmetall builds a new plant in Szeged, Hungary, and thereby expands its footprint in the EU and NATO partner country. 

The groundbreaking ceremony on 26 March 2024 was attended by prominent guests. The Hungarian Minister of Defence, Kristóf Szalay-Bobrovniczky, the Mayor of Szeged, Dr. László Botka, Prof. Dr. Gábor Szabó, Managing Director of the research institute ELI-ALPS, Dr. Judit Fendler, Chancellor of the University of Szeged, Milhálffy Béla, Member of Hungarian Parliament, and many other high-ranking representatives from politics, government and industry followed the invitation of Christoph Müller, CEO of Rheinmetall’s Power Systems division, to attend the ceremony.

The new plant is Rheinmetall’s first major hybrid site, where the Group’s civil business and defence technology activities will be united under one roof. The site, which is scheduled to go into operation in August 2025, is part of Rheinmetall’s Power Systems division. 

A plant with a floor area of 15,000 square metres is to be built on an area of 85,000 square metres in the first industrialization step. Up to 300 highly qualified jobs will be created. The total investment volume is €63 million.

The Rheinmetall site in Szeged will primarily manufacture products for the Automotive business unit, including electrical components such as nanostructure capacitors, as well as products for the use of hydrogen in mobility and energy generation. In addition, around ten percent of the production area is planned for goods from the military business of Rheinmetall’s Electronic Solutions division.” 

“We are delighted to further expand our presence in Hungary, one of our home markets,” says Christoph Müller. “Szeged, the ‘City of Sunshine’, will now be the fourth Rheinmetall site after Budapest, Zalaegerszeg and Várpalota. We are grateful for and proud of the Hungarian government’s trust in us as a partner in the civil and defence industries.”

Taufkirchen/Germany, 3 April 2024 – Sensor solutions provider HENSOLDT has completed the acquisition of ESG Elektroniksystem- und Logistik-GmbH, which was agreed last year, with effect from 2 April 2024 after receiving all official approvals. ESG is a leading platform- and manufacturer-independent system integrator as well as an established technology and innovation partner for defence and security. The acquisition adds strong design and system integration capabilities to HENSOLDT’s product and solutions business and creates a national champion in defence electronics.

HENSOLDT CEO Oliver Dörre emphasises: “The acquisition of ESG fits perfectly into our overall strategy and accelerates the development of HENSOLDT as a solution provider for defence and security. By combining the highly complementary capabilities of HENSOLDT and ESG, we are taking a decisive step towards becoming a leading European provider of seamlessly integrated solutions. This step accelerates our international growth and opens up excellent development opportunities for ESG through capital market access.”

Christoph Otten, Managing Director of ESG, also emphasises the many opportunities: “The deal gives ESG the backing of a financially strong listed company and access to international markets. As part of complete solutions, we can develop our excellent capabilities as a system integrator, technology and innovation partner even better.”

Founded in 1967, ESG is a manufacturer-independent system integrator and technology and innovation partner for defence and public safety. The company develops, integrates, supports and operates highly complex, security-relevant electronic and IT systems in the fields of defence and security. ESG has established itself as a leading German systems house and plays a key role in important current and future programmes such as FCAS (Future Combat Air System) and the F-35. The company employs around 1,400 people in Germany, the Netherlands and the USA and generated sales of around 330 million euros in 2023.

Rheinmetall House in Bristol, UK, the newly acquired Vehicle Systems International (VSI) headquarters, has been officially opened by Andy Start, Chief Executive Officer of Defence Equipment & Support.

As Rheinmetall’s first divisional headquarters to be located outside of Germany, the VSI headquarters will focus on UK, North American and Asia-Pacific markets, providing global customers with more individualised support and promoting and enhancing wider international collaboration. It will continue to establish comprehensive, sovereign capability with commitment to the UK’s Land Industrial Strategy and to drive export from UK. Building on our investments in the UK, Rheinmetall House includes a Collaboration and Innovation Centre (CIC) – a unique capability to promote collaboration and innovation to achieve the battlefield of the future, enabling experimentation with technology across Rheinmetall, with customers, SME’s, academia and our current and future supply chain.

The CIC provides an area dedicated to developing concepts that can be realised in the Systems Integration Lab, pulling products and technology together to integrate into platforms. This approach to Digital Engineering will reduce development time and risk, enabling technology to reach the soldier faster.

Rheinmetall House adds to Rheinmetall’s locations across the UK, including London, Telford, Newcastle, Bovington and the Isle of Wight and further building UK capability, IP and enhancing our investment in UK prosperity. In addition to being the VSI HQ, Rheinmetall House brings together all of Rheinmetall’s expertise in weapons and munitions, technical publications, tactical and logistics vehicles as well as our joint venture RBSL.

During the launch event, guests from across the customer base and industry were invited to explore the Collaboration and Innovation Centre. On display was the BRIDGE future mission module, a digital twin for the Boxer module, demonstrating how SMEs, partners, and customers are exploring future mission requirements in both physical and digital engineering domains.

Attendees also had the chance to explore the Caracal Light Mobility Vehicle; enabled for experimentation with Electronic Architectures, a Mission Master; to experiment with remote piloting and combat pairing, and a Luna NG; with potential for linking to Land platforms to provide airborne ISTAR capability. All are enabled for development in the CIC to support the battlefield of the future.

Rheinmetall House offers an established base for our UK operations, to continue working with our customer, both current and future, and will provide opportunities for key stakeholders to engage and collaborate closely with the Vehicle Systems International division.

Chemring notes the announcement made by the European Commission regarding its allocation of funding in support of boosting defence production within Europe, and we welcome its public announcement of awards totaling €66.7m (£57m) made to our Norwegian subsidiary, Chemring Nobel.

These awards, which are part of the Act in Support of Ammunition Production (“ASAP”) programme, are a direct response to the European Council’s call in March 2023 to urgently deliver ammunition, and missiles if requested, to Ukraine and to help Member States refill their stocks by introducing targeted measures. This Regulation aims to strengthen the responsiveness and ability of the European Union’s defence industry to ensure the timely supply of ammunition and missiles in Europe, and includes measures to support production capacities and tackle identified bottlenecks throughout the industrial supply chain.

Further information can be found on the European Commission website:defence-industry-space.ec.europa.eu/eu-defence-industry/asap-boosting-defence-production_en

Chemring is also pleased to report that it has received further grant funding of 428 million NOK (£32m) from the Government of Norway. This co-financing will boost capacity and production at Chemring Nobel and will significantly strengthen Norwegian production capacity for critical defense products.

Further information can be found on the Norwegian government website:www.regjeringen.no/no/aktuelt/milliardstotte-til-norsk-forsvarsindustri/id3029866.

Grant agreements are expected to be signed over the coming months.

Both grants support Chemring’s decision to invest in doubling the capacity of this facility over the medium-term, and reinforces Chemring Nobel’s position as a key strategic supplier to NATO.

NATO’s DIANA (Defence Innovation Accelerator for the North Atlantic) programme is expanding its network with new sites. Finland is now part of the network since the Board of the DIANA initiative approved a proposal to establish an accelerator and two test centres in Finland. Their mission is to help companies develop technology, innovation and business for the civil and defence sectors.

The preparatory work, which started in spring 2023, was led by the Ministry of Defence and VTT Technical Research Centre of Finland and required input from several operators, has reached its desired conclusion. VTT is setting up a DIANA accelerator in Otaniemi, Espoo, in collaboration with Aalto University and the University of Helsinki. The test centres will be established at the University of Oulu and VTT’s Otaniemi site.

The operations to be established in Finland will build on decades of strong technological expertise and market success. The technology themes of the accelerator and test centres are related to next-generation communication systems, 6G technology, cybersecurity, quantum and space technologies.

“VTT is honoured to be part of the DIANA network and its accelerator and test centre activities. Finland’s world-class expertise helps pioneering companies to develop the deep technologies that will safeguard NATO and its billion inhabitants,” says Sauli Eloranta, Vice President, Defence at VTT.

DIANA accelerator to train companies to operate in the defence sector

VTT is setting up a DIANA accelerator in Otaniemi, Espoo, in collaboration with Aalto University and the University of Helsinki, which will focus on the communication systems and quantum technologies of the future. This will provide a special training programme that will help companies develop deep technologies and innovations for commercial and defence purposes. It will also provide companies with extensive and varied training on how to develop business opportunities in the defence sector.

The accelerator’s services will be specifically targeted at start-ups and SMEs with limited experience in the defence and security sector.

“The long-awaited decision is significant for Finland as it is the first time that Finnish operators will be able to harness their cutting-edge expertise for NATO’s DIANA innovation activities on such a large scale. Our country has a large number of technologically advanced and innovative start-ups and SMEs, which have found it difficult to invest in export in the defence sector. DIANA will support this activity free of charge by using the accelerators to train companies in NATO technical and procurement requirements and by developing company-specific business training programmes. Such a mechanism provides a high-speed lane for companies to enter a difficult but fastest growing industry internationally – I hope Finnish companies will participate as widely as possible,” says Eloranta.

DIANA selects companies for accelerators through its application process. This procedure is called the DIANA challenge programme. The first round of applications for the Finnish DIANA accelerator will be launched in 2024, and it will be open to start-ups developing dual-use solutions in NATO countries.

Test centres provide tools for further technological development

The technology test centres will be established at VTT’s Otaniemi site and the University of Oulu. VTT’s Otaniemi Test Centre will focus on secure connectivity, space and quantum technologies. The test centre at the University of Oulu will offer companies the opportunity to test 6G network technologies.

DIANA test centres are places where companies can strengthen their technological expertise and competitiveness. The research infrastructure and experts provided by the test centres will allow companies to evaluate their own concepts and technologies and get support to develop them. In practice, the test centres will consist of a comprehensive set of existing research facilities and equipment, as well as top-level expertise in the sector. The centres will also support the development of start-ups participating in the accelerator programme.

It will be possible for all companies in NATO countries to purchase the test centre services, regardless of whether or not they belong to a DIANA accelerator.

“Finland has a strong position as a developer of civilian communications systems, thanks to companies like Nokia. DIANA offers a fast track for many companies to enter the NATO defence market,” says Eloranta.

What is NATO’s DIANA initiative?

NATO’s DIANA initiative aims to identify future challenges in the defence and security sector and work with companies to find technological solutions.

“Part of DIANA’s strength is our unique transatlantic network of talent centres and innovation leaders working toward a common purpose. The breadth and diversity of partners in DIANA’s network will accelerate the development and deployment of ground-breaking solutions for defence, security and peace,” says Professor Deeph Chana, Managing Director of DIANA.

The initiative focuses on new technologies such as artificial intelligence, autonomy and quantum technologies, which are dual-use in nature, i.e. they can be commercially exploited in both the civil and defence sectors.

DIANA in brief

• NATO established DIANA to help develop dual-use technologies that meet security and defence challenges. DIANA supports companies working on solutions in key sectors identified by NATO member states.

• To meet the needs of a changing world, NATO is identifying, developing and deploying emerging and disruptive dual-use technologies.

• DIANA is NATO’s innovation accelerator, bringing together innovators from member states to support NATO’s technological leadership, defend its one billion citizens and maintain peace and security.

• DIANA provides companies with training, funding, commercial advice and access to defence expertise and investors. Participating companies are developing dual-use technologies to address major defence and resilience challenges.