Rheinmetall Defence Receives $61 Million Order for "Green" Training Ammunition

Düsseldorf, (PresseBox) - Rheinmetall Defence announced today that the U.S. Marine Corps placed a new $61M delivery order for MK281 cartridges with the Düsseldorf-based Rheinmetall Group. The new delivery order signifies the U.S. Marine Corps (USMC) continued commitment to align its procurements with the Department of Defense's initiative to field safer, "Green" training ammunition. Unexploded Ordnance (UXO) is politically sensitive issue around the world. Rheinmetall is pleased that its advanced technologies are helping the US Marine Corps reduce costs, enhance training, reduce UXO and reduce the environmental impact associated with military training. This new delivery order is a milestone for the company and demonstrates the effectiveness of Rheinmetall's US growth strategy.

The 2001 U.S. Defense Science Board report stated that US ammunition generally produces duds (unexploded ordnance-UXO) at a rate of 3% - 8%. The report also notes that DoD's UXO clean up costs are $2,500 - $16,000 per incidence (per dud). With annual training requirements for at least 400,000 cartridges, the USMC's purchase of "green" MK281 cartridges passes an estimated savings of more than $20 million annually to the US taxpayers.

The USMC awarded Rheinmetall a 5-year Indefinite Delivery/Indefinite Quantity (IDIQ) contract in 2006 to supply MK281 cartridges. In October 2007, the USMC announced that it was increasing the value of the IDIQ contract to allow the US Army the opportunity to buy MK281 supplies under their IDIQ contract. To date, the USMC has now placed orders with Rheinmetall for $133M of MK281 supplies. The framework (IDIQ) contract provides the USMC with options to order up to $65M annually through 2011.

Rheinmetall's US subsidiary, American Rheinmetall Munitions, Inc. (ARM), in Stafford, Virginia produces the MK281 cartridges. ARM has developed a US supply chain for ammunition components and has established several partnerships with US Small Businesses. Rheinmetall has teaming agreements with Cyalume Technologies in Springfield, Massachusetts and Spectra Technologies in Camden, Arkansas. ARM has MK281 suppliers producing material for the program in Maine, Massachusetts and Virginia.

The MK281 is a non-dud producing, non-toxic training cartridge that is fired from U.S. MK19 MOD 3 weapons. The MK281 replaced the pyrotechnic, dud producing M918 training cartridge. Rheinmetall's MK281 leverages the company's patented high-visibility non-toxic "day and night" marking technology. This MK281 design reduces customers costs by eliminating unexploded ordnance, precluding range fires and affording the military commanders with better utilization of training ranges. The cartridge also affords users the ability to conduct "fire and maneuver" training in a dud-free training area.

Following a similar path as the MK281 "Green" ammunition program, Rheinmetall has several other active ammunition programs with the Department of Defense. Recently, Rheinmetall's XM1110 day and night 40mm training cartridge completed successful user trials in Camp Avon Florida. The XM1110 is a non-toxic, non dud producing cartridge that provides military users the capability to conduct fire and maneuver training "24/7" with 40mm grenade launchers like the H&K XM320 grenade launcher. The U.S. Department of Defense has shown great interest in Rheinmtall's innovate "green ammunition" and advanced safety technologies. Rheinmetall's new cartridges are expected to enter US service by 2010.

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