PARIS — Rheinmetall agreed to buy Hagedorn-NC, a German maker of industrial nitrocellulose, to expand its supply of raw material for artillery propellant, the latest move in a rush by countries and companies across Europe to safeguard or build up production of ammunition and explosives.
Rheinmetall plans to convert production at Hagedorn-NC to military-grade cellulose in coming months, though existing civilian customers will continue to be supplied “for the time being,” it said in a statement on Monday.
The purchase closes a strategic shortage in the supply chain, the company said.
“The acquisition helps us to overcome a strategic bottleneck in propellant production,” Rheinmetall CEO Armin Papperger said. “It gives us an important source of raw materials and continues the vertical integration along the entire value chain in the production of ammunition.”
Europe’s artillery ammunition makers have scrambled to boost output after Russia invaded Ukraine in 2022, with industry and the European Union jointly spending more than €1.5 billion ($1.6 billion) to add capacity for explosives, propellant and shells. The EU now expects the bloc to produce 2 million artillery shells in 2025, from estimated annual capacity of 230,000 rounds in early 2023.
Firing all those shells relies on nitrocellulose, which is the raw material for the charges that can propel a 155 mm grenade from a modern howitzer to distances of 40 kilometers (25 miles) or more. Gunners typically use modular charges, stacking more propellant to fire greater distances.
Rheinmetall is among those that has been ramping up production of large-caliber ammunition, and the company aims for capacity to produce up to 1.1 million 155 mm artillery shells annually by 2027. Hagedorn-NC will give Rheinmetall a fourth nitrocellulose production site, in addition to factories in Switzerland, Spain and South Africa, the company said.
The purchase comes after Prague-based defense firm Czechoslovak Group (CSG) in November snapped up the nitrocellulose business of U.S.-based International Flavors & Fragrances in Walsrode, Germany. The Czech firm plans to add production of nitrocellulose for ammunition over time, in addition to industrial applications such as wood coatings and nail polish.
Nitrocellulose is produced from either cotton linters or wood pulp, using nitrating acids to convert cellulose. The EU has banned export of nitrocellulose to Russia since April 2022, and of its precursor cotton linter pulp since June 2023.
The Hagedorn-NC acquisition is subject to antitrust approval, Rheinmetall said. The company said the purchase will strengthen its position as a leading supplier of large-caliber ammunition within NATO and ensure long-term and independent supply of essential components.
Rheinmetall didn’t immediately respond to e-mailed questions regarding financial details, production capacity and any remaining bottleneck issues in nitrocellulose.
The company says its acquisition of Hagedorn-NC will add 90 employees. Meanwhile, CSG said more than 350 people work in the Walsrode nitrocellulose plant and associated industrial park the company is buying.
New or additional production capacity for explosives and artillery propellant is arising or being planned across Europe, after Ukraine’s shell shortage in its fight against Russia and NATO’s inability to deliver enough ammunition raised the alarm for military planners and policymakers.
France last month restarted explosive powder production at Eurenco in Bergerac, in the southwest of the country, having halted domestic manufacture of propellant in 2007. Meanwhile, Denmark in March picked Norway’s Nammo to restart an ammunition plant that had been shut down in 2020.
Polish lawmakers in November agreed to invest around 3 billion zloty ($760 million) in local ammunition production, particularly of 155 mm shells. The government signed a letter of intent with fertilizer maker Grupa Azoty and defense manufacturer Polska Grupa Zbrojeniowa earlier that month to set up nitrocellulose and propellant production in Poland.
Rheinmetall currently makes nitrocellulose through the Nitrochemie joint venture with RUAG MRO Holding at a site in Wimmis, Switzerland, as well as at sites in Murcia in Spain and Welllington in South Africa.
Hagedorn-NC is based on Osnabrück in northwest Germany, with a production site in Lingen, and currently makes nitrocellulose specifically for industrial applications, particularly lacquers and printing inks.
Rudy Ruitenberg is a Europe correspondent for Defense News. He started his career at Bloomberg News and has experience reporting on technology, commodity markets and politics.
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