This article is from the Model Rockets FAQ, by Wolfram von Kiparski with numerous contributions by others.
Making your own rocket motors is not recommended.
It's completely illegal without the appropriate permissions and licenses.
First of all, you need a pyrotechnics manufacturing license
("Hersteller-Schein"). After you got this, you need a site and more
licenses from several offices (Arbeitssicherheit, Bauamt, Umweltschutz etc.)
before you can start to plan the several separate buildings needed for
storage of the components, different procedures (grinding, mixing, filling,
pressing etc.), and storage of the finished products.
And don't forget about the (in this case very costly) insurance.
All in all, manufacturing your own rocket motors is nothing you would want
to burden yourself with. Even if you got your manufacturer's license,
you are still not allowed to USE the products you made unless they have
got their BAM approval for class I, II or T1/T2!!