BERLIN (dpa-AFX) - The surge in the defense industry following Russia's attack on Ukraine has sent the membership of a key industry association soaring. "We now have 340 member companies, which is 100 more than at the end of last year," said Hans Christoph Atzpodien, Managing Director of the Federation of German Security and Defense Industries (BDSV). When he took office in 2017, the BDSV counted just 70 members.
New members are seeking guidance on how to conduct business in the defense sector and which regulations are relevant to them. They also hope to network with potential buyers.
Atzpodien did not disclose specific names of new members. Many of the companies come from the automotive sector, where they previously operated as suppliers or service providers. Due to the ongoing crisis in the German automotive industry, some firms are now shifting focus, aiming to offset weaknesses in their auto business with contracts from the defense industry. As an example, he mentioned engineering firms whose expertise is now less in demand among car manufacturers.
The Sector Has Its Own Rules
Reflecting on the rising military expenditures to which NATO member states have committed, the association representative said: "For decades, the public sector had to exercise restraint in defense spending, but that has now completely reversed: There is an incredible momentum across the entire economy, also because of our current threat environment."
German defense companies fundamentally need new service providers and suppliers; however, the sector and the Bundeswehr's procurement office have their own set of rules.
For example, certain employees require what is known as a security clearance in order to participate in weapons production. Such clearance must be applied for, and applicants are vetted and scrutinized by state authorities.
This process takes time, Atzpodien noted. "That is my first piece of advice to companies: Expand the number of your employees with security clearance and qualify yourselves on the procurement portals of your potential customers."
Germany's largest defense company, Rheinmetall--whose CEO Armin Papperger also serves as BDSV president--reports increasing demand from suppliers. Frequently, these are companies from the automotive industry./wdw/DP/zb
