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BAE SYSTEMS AND RHEINMETALL NITROCHEMIE SIGN LONG-TERM MUNITIONS DEAL

30 Sep 2009 | Ref. 191/2009

Farnborough, United Kingdom – A ten-year munitions deal worth up to £205 million will help secure supplies of ammunition to British troops. The arrangement between BAE Systems and Rheinmetall Nitrochemie is for the supply of propellant used in producing ammunition.

Last August, BAE Systems signed a £2 billion-plus, 15-year deal called MASS (Munitions Acquisition – the Supply Solution) to supply the UK Ministry of Defence (MoD) with munitions, and this new contract flows down many of the principles of that deal. Like MASS, the Rheinmetall Nitrochemie deal includes price caps and cost reduction incentives.

“Rheinmetall Nitrochemie will now, like us, be able to take a long-term strategic view in areas such as investment and production planning to ensure our joint customer, the UK MoD, gets the security of supply, capability and capacity it needs at the lowest possible price,” commented Charlie Blakemore, Managing Director of BAE Systems’ Munitions business.

The MASS arrangement supplies a significant percentage of the general munitions consumed by UK Armed Forces for training and front line operations.

Rheinmetall Nitrochemie has worked closely with BAE Systems for eight years, supplying propellants and combustible cartridge components. During this period significant investment has been made to establish World Class production capabilities in support of BAE Systems requirements. Signing of the new 10 year supply agreement under MASS extends this relationship for the future.

Rheinmetall Nitrochemie will supply propellant and combustible charge cases for artillery, mortar and tank ammunition to BAE Systems’ facility at Glascoed in South Wales. Propellant for small arms ammunition will be delivered to its Radway Green factory in Cheshire.

The Rheinmetall Nitrochemie Group is jointly owned by Rheinmetall AG of Germany and RUAG of Switzerland. Rheinmetall Nitrochemie’s core competencies include the development and production of propellants and propelling charges for military and civil applications. Besides charge systems and propelling powder for small-, medium- and large-calibre ammunition, the company makes combustible cast parts, e.g. for Rheinmetall’s modular propelling charge system, the MCS. With locations in Aschau, Germany and Wimmis, Switzerland, Rheinmetall Nitrochemie is simultaneously the Propellants Division of the Düsseldorf-based Rheinmetall Defence, whose 9,000 employees generate annual sales of €1.9 billion.

For more on MASS see: http://www.baesystems.com/Newsroom/NewsReleases/2008/autoGen_10872110497.html

About BAE Systems

BAE Systems is the premier global defence, security and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, security, information technology solutions and customer support services. With approximately 105,000 employees worldwide, BAE Systems' sales exceeded £18.5 billion (US $34.4 billion) in 2008.

For further information, please contact:

Mike Sweeney, BAE Systems
Tel: 0780 171 6452
mike.sweeney2@baesystems.com

Mike Dennehy, BAE Systems
Tel: +44 (0) 1252 384782
Mob: +44 (0) 7793 427 132
Michael.dennehy@baesystems.com



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