Norway’s Nammo has called on European countries to provide arms producers with long-term contracts to support an industry with profitable operations.
Nammo CEO Morten Brandtaeg told Breaking Defense that 10 to 15 years of production agreements would enable arms manufacturers to sustain industry investments.
In an interview with the publication on the sidelines of the AUSA 2023 conference in Washington, D.C., the executive said awarding companies three- to four-year contracts could eventually kill the industry. He explained that longer production contracts would deliver the required profits for arms makers to continue investing in research and development efforts and introduce innovations.
“We have to make good profits so we can continue to spend money on the next versions of artillery rounds,” the CEO said.
Brandtaeg noted that the industry’s concerns and the ammunition shortage in Europe, caused by the war in Ukraine, must be addressed at the same time.
He expressed optimism, however, that the ammo production difficulties will soon be sorted out. The current shortage issue has already caught more attention in the European Union and NATO than in 2022.
In recent months, the EU has activated the Act in Support of Ammunition Production program to meet the region’s ammo requirements while NATO approved deals to acquire 155 mm projectiles, Breaking Defense said.