The tech enterprise Rheinmetall and Ukraine’s state-owned Ukrainian Defense Industry JSC (UDI, the former Ukroboronprom) have set up a joint venture company in Kyiv. Denys Shmyhal, Ukraine’s Prime Minister, made the announcement on the occasion of the German-Ukrainian Business Forum in Berlin, which was also attended by the German Chancellor Olaf Scholz. Rheinmetall Ukrainian Defense Industry LLC has already been operating since 18 October 2023. It is jointly owned by Rheinmetall Landsysteme GmbH, with a 51% stake, and UDI, which holds the remaining 49%.
Strategic cooperation in the defence realm between the two organizations began back in May 2023. On 28 September 2023 Germany’s Federal Cartel Office gave the new joint venture the green light, followed by approval from the relevant agencies in Poland and Ukraine in early October. A few days later Rheinmetall Ukrainian Defense Industry was officially registered and commenced operations.
The joint venture will be active in the fields of service and maintenance as well as assembly, production and development of military vehicles, and will initially operate solely on Ukrainian sovereign territory. “In Germany there are no competition overlaps and no indications of competition-related concerns”, stated the Federal Cartel Office in a press release dated 28 September 2023.
First announced in May 2023, cooperation between Rheinmetall and the Ukrainian defence sector is intended to strengthen Ukraine’s domestic defence industry and, ultimately, its national security. The plan calls for creating joint defence industry capabilities in Ukraine.
Ukraine stands to benefit from this cooperation in multiple ways, including the creation and expansion of defence technology capacities in-country, additional local added value as well as the swift delivery of military equipment from Germany.
Service and maintenance of military vehicles supplied to Ukraine either directly or via the German government’s “Ringtausch” multilateral equipment exchange projects form the first step in cooperation between Rheinmetall and UDI. The cooperation will soon extend to the joint production in Ukraine of selected Rheinmetall products.