Rheinmetall CEO says gunpowder choke point is solved with four years of reserves

The Bavarian site, spread across 90 hectares, is being expanded under a plan called "Project Firepower." It will also house a research center for high-energy smokeless propellants. Gunpowder prices have spiked as demand outstrips supply.

Rheinmetall is one of the few manufacturers that covers the full value chain, from the propellant to the bullet casing. Papperger said the gunpowder produced at Aschau will feed ammunition for drones, small-caliber weapons, tank guns, and artillery. "In every area where you need powder, here we produce for all these products."

The defense contractor's shares have fallen 35% this year. Some investors question whether modern warfare, dominated by drones and AI-powered systems, will reduce demand for traditional heavy ammunition. Papperger dismissed the concern. "The drone is an add-on in that area, so it will give us more business and not less."

He pointed to the company's order book, which he expects to exceed 100 billion euros by year-end. The U.S. is rebuilding its own depleted stocks, Papperger said, and cannot supply Europe. "The stocks in America are on a level of maybe 20% to 30%, and they have to produce for themselves."

"For the next 10 years we have a lot to do, and we have a lot to produce here," he added.