German Chancellor Olaf Scholz and Defense Minister Boris Pistorius arrived at a small town in Lower Saxony on Monday for the groundbreaking ceremony for a new artillery ammunition factory.

The site is being built by the defense contractor Rheinmetall in the town of Unterlüss, between Hanover and Hamburg, where the company already has production facilities.

The building of the new factory for artillery ammunition comes amid increased demand as countries aim to bolster supplies to Ukraine as well as keep their own stocks full.

Hundreds of thousands of shells per year

Rheinmetall, which has seen its share price more than double following the Russian invasion of Ukraine, produces a range of military equipment that has become essential for Ukraine's defense, including the cannon for the Leopard 2 and a long-range howitzer, the Panzerhaubitze 2000.

But artillery ammunition has increasingly come into focus as the EU recently admitted that it would not be able to fulfill its pledge to provide Ukraine with 1 million artillery shells by March.

Rheinmetall's CEO Armin Papperger told the German newspaper Tagesspiegel on Monday that once the new facility is completed, Germany will have the ability to produce 200,000 artillery shells per year.

"Ukraine will receive several hundred thousand shells from us alone this year," he said, as well as "several dozen armored personnel carriers and tanks," on top of aerial defense systems.

German public broadcaster NDR reported that the company had invested €300 million ($323 million) in the project and expected to create 500 new jobs.

Numerous people, including farmers with tractors, also gathered outside the site on Monday, although it was not clear how many were there to protest the construction of a new weapons factory and how many were simply protesting Scholz and his coalition government.

Scholz's 'Zeitenwende' in practice

Scholz's attendance at the symbolic groundbreaking event may prove to be one of the highlights of his chancellorship after announcing the "Zeitenwende" — or changing of the times — days after Russian troops marched en masse into Ukraine in February 2022.

This consisted of a one-off rearmament program with a budget of €100 billion to be used to bring the Bundeswehr up-to-date and to boost the EU's collective defense.

There has been little substantial progress since that announcement, but Papperger said that he considered it correct for Scholz to consider the beginning of work on the new facility as the chancellor's "success."

Rheinmetall — which received contracts from the German state worth €10 billion last year, and expects an even greater volume this year — also said it could pick up some of the slack if the US reduces or stops entirely its own support for Ukraine.

"We can still expand our production — both in Ukraine and in Germany," Papperger told Tagesspiegel referring a new facility being set up in Ukraine for the production of armored vehicles.

ab/rc (dpa, AFP)

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