Bulgaria and German defense giant Rheinmetall have signed a €1 billion ($1.1 billion) agreement to establish a major ammunition and gunpowder production facility in the country’s Sopot region. The project aims to bolster Europe’s defense manufacturing capacity amid growing security challenges and heightened demand for artillery shells across the continent.
The new industrial complex will be built on a 100-hectare (247-acre) site and is expected to create around 1,000 jobs once fully operational. Infrastructure development is projected to take approximately 14 months, with production of projectile casings starting in 2027 and explosive materials following in 2028.
At full capacity, the factory will manufacture up to 100,000 155-millimeter artillery shells annually, along with propellant charges for 150,000 additional rounds and approximately 1,300 tonnes (2.8 million pounds) of gunpowder each year. The facility will serve as a key component of Europe’s push to expand defense autonomy and ammunition readiness.
The initiative is a joint venture between Rheinmetall and Bulgaria’s state-owned Vazovski Mashinostroitelni Zavodi (VMZ). The German firm will hold a 51 percent stake, while VMZ retains 49 percent. Bulgaria’s share is being financed through a European SAFE (Security Action for Europe) loan program, designed to support EU member states in modernizing their defense industries.
