Rheinmetall AG has signed a Memorandum of Understanding (MoU) with Latvia to establish a €275 million artillery ammunition production facility, marking another significant expansion of the German defence giant's European manufacturing network and reinforcing the Baltic states' defence industrial capabilities.

The facility, to be operated through a joint venture between Rheinmetall Waffe Munition GmbH (51%) and the Latvian State Defence Corporation (49%), will produce tens of thousands of 155mm artillery shells annually once operational around spring 2027. Construction is scheduled to commence in spring 2026, with the investment creating at least 150 local jobs whilst integrating regional companies into the facility's value chain.

For Latvia, this agreement represents a crucial step towards defence sovereignty and industrial diversification. Prime Minister Evika Silina emphasised that the partnership "not only builds stronger national defence, but also contributes to security of supply in Europe, enhancing industrial capacity as well as facilitating economic growth". The facility will ensure ammunition supplies for Latvia's National Armed Forces whilst strengthening regional security supply chains and providing support to partner countries.

Ingrida Kirse, Board Member of the State Defence Corporation, highlighted the project's dual benefits, noting that whilst the corporation fulfils its mission to support the National Armed Forces and foster defence industry development, Rheinmetall contributes "longstanding expertise, accumulated know-how, high standards, and international recognition". This partnership aligns with Latvia's broader strategy to develop indigenous defence capabilities whilst maintaining interoperability with NATO standards.

The Latvian agreement directly follows Rheinmetall's commissioning by neighbouring Lithuania at the end of 2024 to construct a similar ammunition production facility at Baisogala, which mirrors the size and design planned for Latvia. The Lithuanian facility, representing a €180 million investment, is scheduled to begin operations in mid-2026 and will produce tens of thousands of 155mm shells annually whilst creating approximately 150 jobs.

These Baltic developments form part of Rheinmetall's aggressive European expansion strategy. The company recently opened Europe's largest ammunition factory in Unterluess, Germany, capable of producing 350,000 artillery shells annually by 2027. This €500 million facility represents Rheinmetall's commitment to meeting urgent European military needs whilst establishing what CEO Armin Papperger describes as "the largest ammunition plant in Europe, if not the world".

Rheinmetall's expansion across the Baltic states and broader Europe reflects the company's strategic positioning to capitalise on increased defence spending and the European Union's drive for strategic autonomy. The German defence giant's network now extends across multiple European countries, with new facilities confirmed for Bulgaria, Hungary, and Romania, alongside existing operations in Spain and South Africa. This diversification strategy enables Rheinmetall to mitigate geopolitical risks whilst positioning itself as a pan-European defence supplier capable of supporting NATO's collective defence requirements.

Beyond ammunition production, Rheinmetall has recently expanded into naval systems through its acquisition of Luerssen Group's warship division, NVL, demonstrating the company's broader ambitions across defence sectors. This comprehensive approach positions Rheinmetall as a leading European defence contractor capable of delivering integrated solutions across land, sea, and air domains.

The Latvia agreement underscores Rheinmetall's commitment to what Papperger describes as building "a pan-European defence ecosystem" that can rapidly establish comparable facilities across NATO countries. With the company targeting production of approximately 1.5 million artillery shells annually across its global network by 2027, the Latvian facility represents another crucial component in Europe's evolving defence industrial base.

This strategic expansion aligns with broader European defence priorities, as governments across the continent accelerate military modernisation programmes in response to evolving security challenges. For Rheinmetall, the Baltic expansion represents both a commercial opportunity and a contribution to European strategic autonomy, whilst for Latvia, it marks a significant step towards indigenous defence capabilities and regional security leadership.

Follow us on Telegram, Facebook and X.