PARIS — Nexter Munitions has signed a multiyear contract worth an initial 138 million euros ($178 million) with the Direction Générale de l’Armement (DGA) procurement office to develop and produce large caliber ammunition, the Ministry of Defense said.
The first tranche order is worth 138 million euros, with conditional tranches to be placed, a DGA spokesman told journalists.
Under the contract, signed Dec. 30, Nexter will be responsible for development, qualification and production of 100mm shells for the Navy, and 105mm, 120mm and 155mm for the Army, with delivery in stages to 2019, the ministry said in a Jan. 19 statement.
Nexter has been anxious to seal a munitions deal as there was concern over workload for its ammunitions factory at La Chapelle, near Bourges in central France.
The contract reflected a response to the operational needs of the forces, based on recent lessons learned, and was intended to support critical industrial capacities, the DGA statement said.
“The visibility afforded to Nexter Munitions allows the company to adapt its industrial capability and to increase its competitiveness in export markets,” the DGA said.
Nexter Munitions has annual sales of 160 million euros, of which exports account for about 20 percent, the DGA said.
“This package contract covers the Armed Forces' requirements for large-caliber ammunition and gives France guarantees regarding the short and medium-term sustainability of the business of its supplier, Nexter Munitions, for both development and production of large- caliber ammunition,” the company said in a statement.
“The multi-annual nature of the supply contracts also ensures better price control in an extremely competitive global market,” Nexter said.
The orders covers development and qualification of 155/52-caliber illumination and smoke shells, supply of modular charges for Caesar artillery, supply of explosive 120mm cartridges for the Leclerc tank, and 105mm practice cartridges for AMX 10R CR armored vehicles.
The deal also restarts production of 100mm cartridges for the French Navy, Nexter said.
Nexter had shown interest in the Munitions Acquisition Supply Solution contract signed between BAE Systems and the British Ministry of Defense in 2008, which guaranteed a long-term supply at an agreed price, and allowed a reorganization of industrial facilities.