The Land UK subsidiary of BAE Systems was awarded a $21 million contract to supply 155mm smoke and illuminating artillery rounds to Britain's Defense Ministry.

The contract, which was awarded globally through the Defense Ministry's tender process, offers flexibility to add additional quantities in later years, the company said in a news release Tuesday.

Smoke and Illuminating rounds are used in the battlefield during day and night operations. The smoke rounds obscure the battlefield visually and in the thermal range.

The shell bodies will be manufactured at BAE Systems' British facility in Washington, and the smoke and illuminating payloads will be assembled into the shells at the Glascoed facility in South Wales.

BAE Systems will use German's Rheinmetall's Assegai Carrier design to save time and costs by not needing to develop the system, the company said.

"This contract is testament to what collaboration between strong companies can achieve," Lee Smurthwaite, the heavy munitions director for BAE Systems Land UK, said in a statement. "Manufacturing and assembling products to someone else's design demands an agile and capable set up, which we've demonstrated at our Glascoed and Washington facilities."

He added: "As well as offering excellent value for money, this contract shows the dedication of our people to ensure third-party designs remain interoperable with the British Army's weapon systems and ultimately, deliver essential capability to soldiers."

Last week, BAE Systems announced it sold a majority stake in its Land UK tank and combat vehicle division to Rheinmetall for $37.6 million. The new joint venture gives Rheinmetall a 55 percent stake with BAE owning the rest.

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