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German Defense Producer and Industrial Plant Constructor Team Up

Jan. 29, 2014 - 01:26PM   |  
By ALBRECHT MÜLLER   |   Comments
A natural gas power station in Portugal.
A natural gas power station in Portugal. (Ferrostaal)
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BONN — Rheinmetall of Düsseldorf and Ferrostaal of Essen have created a joint venture to plan and build industrial facilities. Each company holds 50 percent of Rheinmetall International Engineering.

The needed approval by the competition authorities was granted in December, both companies recently announced.

The Rheinmetall group is Germany’s largest defense company and was No. 31 on the Defense News Top 100 list of defense companies for 2012. Ferrostaal is a provider of industrial services, operating worldwide with a presence in about 40 countries, and is active in project development, financing and industrial plant construction.

“Rheinmetall intends to use the new joint venture to accelerate internationalization of its defense operations, especially in regions where until now it has had only limited access,” said a spokesman for Rheinmetall. “It complements our portfolio and fits it 100 percent.”

The defense giant sees the joint venture as a means of marketing its extensive array of defense technology products in combination with local turnkey production facilities.

“This takes account of a growing trend among international customers, who increasingly prefer to create manufacturing infrastructure at home rather than rely solely on traditional arms imports,” said the spokesman.

Both companies expect broader access to target markets in North Africa and the Middle East, as well as Asia and Latin America, particularly with regard to sovereign customers, by mixing the two groups’ sales networks.

Ferrostaal decline to comment, but in a statement released in September when the companies announced their intention to form the joint venture, John Benjamin Schroeder, managing director of Ferrostaal, said, “With Rheinmetall we have a leading enterprise of the defense technology with a unique product portfolio at our side. Together, the distinct project competence and the specific country knowledge of Ferrostaal are the perfect base to generate new business in many regions of the world. This also includes, that we will expand our traditional oil and gas business within the joint venture to Asia and South-America.”

Rheinmetall International Engineering is based in Geisenheim, close to Frankfurt/Main in the midwest of Germany. It will have an initial staff of around 200 persons. Most of them are former Ferrostaal employees.

Email: amuller@defensenews.com.

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