The stock value of printing machinery manufacturer, Heidelberger Druckmaschinen AG (HDM), skyrocketed by 35% on July 29, following their declaration of expanding into the weaponry production sector. Jürgen Otto, the CEO of the corporation, unveiled a long-run strategic collaboration with Vincorion, which is a current player in the field of safety technology.
Vincorion is an offshoot from the defense technology sector of Jenoptik, a renowned tech giant in East Germany. An array of products is under its manufacture, including the generators for the Eurofighter battle jet. According to Otto, the weapons market is enormously prosperous, boasting a value of several billion euros and consistently enlarging its scope.
The collaboration with Vincorion marked HDM’s initial significant venture into the arms market. Projections highlight that the company foresees a generation of a minimum of €100 million within the next three years in this flourishing sector.
Comdirect, a Commerzbank subsidiary, commented this move provides Heidelberg access into an expanding area with attractive margins. This will be closely tied to Europe’s initiative for heightened defense independence. The strategic alignment with the sensitive technology of security furthers HDM’s robust and long-range value creation.
This strategic move by HDM is not an isolated case, as more engineering corporations show a trend towards engaging in military goods production. This shift coincides with the tactical objectives of powerful nations contending for supremacy in the global market sphere.
Collapsing profits in the civilian sector, partly attributed to the destructive trade war between Europe and the United States, drives most large corporations towards the conversion into the ‘business of death’. Examples include ZF Friedrichshafen moving towards the weaponry manufacturing, notably in military propulsion systems, actively using its facilities for the process and conversion of capability.
Trumpf has broken new ground by producing laser weapons, initially for drone defense. This development signals the company’s foray into advanced military technology. Continental has formed an alliance with Rheinmetall, Germany’s biggest arms manufacturer, transforming plants previously meant for automotive technology into factories that produce weapons components.
Volkswagen (VW) is contemplating the transformation of its Osnabruck plant for the manufacturing of tanks, a decision validated by the company’s leadership. Bosch, on the other hand, has seen a migration of skilled workers shifting towards the defense sector. The company now employs its facilities for military subcontracting jobs.
Established arms manufacturers such as Rheinmetall have also amplified their production efforts. This includes adapting previous car parts production lines, particularly in Berlin and Neuss, into arms and ammunition facilities, in order to meet the rapidly escalating demand.
KNDS (Krauss-Maffei Wegmann) has resorted to utilizing old railway technology factories, such as those inherited from Alstom, for producing tank parts. Hensoldt is focusing intensely on recruiting engineers, originally from the non-military mechanical engineering arena, to aid in the acceleration of military electronics and radar systems production.
Major German machine equipment manufacturers, including Walter Maschinenbau, Vollmer, Heller, and Fein are playing substantial roles as suppliers of industry gear and elements. These components eventually find their application, either directly or indirectly, in international defense manufacturing.
Their specialization is placed in CNC machines that are integral to ammunition, vehicles, and weapons’ precision production. These companies look past Germany’s borders and indulge in exporting to third countries as well.
Heidelberger Druckmaschinen AG was previously a leading entity globally, in producing printing presses for commercial and magazine printing. Nonetheless, there has been a rapid shift in trend towards digital communication and online availability of print media, leading to a significant lapse in demand for physical prints.
König & Bauer, another manufacturer of printing press, stated that global demand for newspaper presses shrank by approximately 70% from 2008 to 2018. While there was a limited expansion in packaging and digital printing due to online retail’s growth, it failed to deliver previous profit margins. This resulted in HDM expanding its product base introducing lines that included consumables, electric vehicles’ charging infrastructure, automation technologies and robotics.
HDM’s revenues decreased steadily throughout, registering a setback from about €3.6 billion in 2007 to €2.25 billion in the 2024/25 financial year, rendering production facilities underutilized. Thus, the strategic alliance with Vincorion seemed like a significant progression for HDM. The company was impressed by Vincorion’s scalability – the capability of boosting production without significantly raising investment costs. Consequently, Heidelberg’s ambition to reposition itself as a steadfast partner in security-related sectors was pronounced by CEO Otto.
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