Before an industry meeting with Defense Minister Boris Pistorius, Rheinmetall boss Armin Papperger calls for an increase in the German defense budget, independent of the 100 billion euro special fund.

"We need decisions about the budget," the manager said in a Reuters interview.

"The 51 billion euros in the individual plan 14 will not be enough to be able to procure everything.

And the 100 billion have already been budgeted and some have already been used up by inflation." "Individual plan 14" is the defense budget in the federal budget. Last year, trucks and ammunition could not have been delivered because there was no more money in the budget.

"If we want to be successful, and not just with the 100 billion package, we have to have a sustainable individual plan 14 over the next ten years today," said Papperger.

After taking office a few days ago, Pistorius announced very rapid talks with industry and admitted that the so-called Bundeswehr special fund of 100 billion euros was not enough - just like the regular budget of 51 billion euros.

Papperger said Rheinmetall had done its homework and expanded capacity.

Around 2,000 employees were hired last year.

New powder factory to solve bottleneck

The manager said that Rheinmetall was considering operating another powder plant in Saxony to meet the growing need for ammunition, and called for state investment in this area.

"This is a specialty chemicals plant that will cost between 700 and 800 million euros." This is an investment that the industry cannot bear alone.

“This is a national security investment that is needed.

And of course you need the federal government here.” Germany has the largest capacity in the world for 120 millimeter tank ammunition.

"In Germany we have the largest capacity in the world for tank ammunition - we can produce 240,000 rounds of tank ammunition a year.

That's more than the whole world needs," said Papperger.

Production could be hampered by the powder bottleneck.

The group, which is traded as a Dax aspirant, has been on a record course for a long time thanks to the armaments business.

“We had a very good year in 2022, a record year.

You know the results of the third quarter, things will look even better in the fourth quarter,” said Papperger.

In terms of orders on hand, the group is heading towards EUR 30 billion after around EUR 25 billion most recently.

"And I'm assuming we have 40 billion in backlog next year.

The company is growing very strongly.” In the armaments sector, he expects growth rates of between 15 and 20 percent in the coming years.

There are many projects in the pipeline that will be wrapped up in the next six months.

Even in the civil business, which only accounts for around 20 percent of group sales, "we will have reasonable growth." At the beginning of the year, Rheinmetall had already announced that in 2022 the operating profit would have increased by more than 20 percent.