Following a Europe-wide selection process, Alzchem Group AG has been awarded an investment grant of EUR 34.4 million by the EU Commission as part of the ASAP (“Act in Support of Ammunition Production”) funding instrument. Alzchem Group AG wants to use the funds over an investment period of two and a half years to increase the production capacity of nitroguanidine and to modernize and expand the existing facilities for the production of guanidine nitrate. Guanidine nitrate is a precursor of nitroguanidine, which is used in crop protection, as a propellant for airbags and, increasingly, in defense technology. Funding for the project was approved in principle and published today by the EU Commission, in consultation with the member states; the final allocation will be made upon conclusion of a corresponding grant agreement, expected to be signed in May 2024.
ASAP is a direct response to the European Council’s call in March 2023 to urgently deliver ammunition, and missiles if requested, to Ukraine and to help Member States refill their stocks by introducing targeted measures. Aimed at enabling ramp-up of ammunition production capacity across Europe, ASAP constitutes the track 3 (industrial part) of the so-called three-track approach of the ammunition plan agreed by the Council. This Regulation aims at strengthening the responsiveness and ability of the Union defence industry to ensure the timely supply of ammunition and missiles in Europe. The regulation includes measures to support the industrial reinforcement throughout the supply chains of ammunition and missiles in the EU. Financial support will be provided in the form of grants to various types of actions contributing to the efforts of the European defence industry to increase their production capacities and tackle identified bottlenecks.
ASAP aims to ramp-up of ammunition production capacity across Europe and with this, help Member States refill their stocks and deliver ammunition to Ukraine by anticipating bottlenecks and shortages in the defence supply chains. The programme has currently identified projects with a budget in excess of €500 million to stimulate the production of ammunition in the following areas:
- Explosives with a project portfolio budget of about €124 million;
- Powder with a project portfolio budget of about €248 million;
- Shells with a project portfolio budget of about €90 million;
- Missiles with a project portfolio budget of about €50 million;
- Testing and reconditioning certification of about €2 million.
Alzchem is a globally active specialty chemicals company that is one of the market leaders in most of its fields of activity. Alzchem benefits from the three very different global developments climate change, population growth and longer life expectancy in a unique way. Alzchem products can offer attractive solutions for achieving the resulting social goals in a multitude of different applications. Alzchem Group AG’s broad product range includes dietary supplements, precursors for corona tests and pharmaceutical raw materials. These products are the company’s response to global trends and developments. Alzchem is ideally positioned in this respect and considers itself well prepared for an environmental future and global development. The company employs around 1,630 people at four production sites in Germany and a plant in Sweden, as well as three sales companies in the USA, China and England. Alzchem generated Group sales of around EUR 422.3 million and EBITDA of around EUR 62.0 million in 2021.
