Latvia is set to strengthen its domestic defense industry with a 275-million-euro ($321 million) deal with German defense firm Rheinmetall to establish a new ammunition production facility.
The memorandum of understanding — signed in Hamburg, Germany — highlighted that the planned facility is expected to produce “tens of thousands” of 155mm shells annually.
The deal includes design, construction, and planning for a modern shell forging and filling line, capacity to integrate regional suppliers, and local workforce development. Construction is slated to begin in spring 2026, with initial production expected about a year later.
The facility will be operated under a joint venture with Rheinmetall Waffe Munition (51 percent) and Latvia’s State Defense Corporation (49 percent)
Building Resilience Through Sovereign Production
Latvia’s move reflects a strategic push toward defense self-sufficiency amid renewed pressure across Europe’s security environment.
The planned facility aims to secure national supply chains and reduce dependency on imports while also positioning Latvia as a hub for supplying partner states.
Latvian Prime Minister Evika Siliņa framed the agreement as more than industrial, pointing out that “investing in our defense industry is investing in the safety and future of our people.”
“Signing this [deal] is a clear step towards strengthening Latvia’s security and developing our defence industry,” she said.
Rheinmetall CEO Armin Papperger, meanwhile, emphasized the company’s commitment to expanding its global ammunition footprint while supporting national sovereignty for clients.
The facility will integrate a full production chain with forging, filling, testing, and quality assurance. At least 150 jobs are expected locally, and Latvian firms will be woven into the supply chain.
Baltic neighbors are already coordinating similar projects. In November 2024, Lithuania awarded Rheinmetall a $190-million contract for the construction of an ammunition plant in Baisogala.
