The joint venture of Rheinmetall AG of Düsseldorf and Ferrostaal GmbH of Essen, Rheinmetall International Engineering GmbH, is now ready to take-off.
Rheinmetall and Ferrostaal had announced the creation of the joint venture in September 2013, with each holding a 50% stake. The final nod by the competition authorities was given in December 2013.
Rheinmetall International Engineering will plan and build industrial facilities, serving as a single-source supplier, headquartered in Geisenheim, Germany. It will have an initial staff of around 200, most of them former Ferrostaal Industrieanlagen GmbH employees.
Rheinmetall intends to use the new joint venture to accelerate internationalization of its defence operations, especially in regions where until now it has had only limited access. Intermeshing of the two Groups’ sales networks should – particularly with regard to sovereign customers – assure broader access to target markets in North Africa and Middle East as well as Asia and Latin America. Ferrostaal expects the joint venture to give its activities in these regions a significant boost. This also applies to Ferrostaal’s traditional oil and gas operations, which it is contributing to the joint venture in the form of Ferrostaal Industrieanlagen GmbH.
Rheinmetall sees the joint venture as a means of marketing its extensive array of defence technology products in combination with local turnkey production facilities. This approach 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.
By drawing on the experience of a globally leading defence contractor, Rheinmetall International Engineering thus enables execution of major capex projects in the defence technology realm, too – all from a single source. In the field of plant engineering, the new joint venture benefits in particular from the expertise and international experience which Ferrostaal Industrieanlagen brings to the company, especially with regard to project management, project development, EPC contracting (engineering, procurement, construction) and production planning.