Latvia has signed a 275-million-euro ($321 million) agreement with German defense giant Rheinmetall to build a new ammunition production facility, a major step in strengthening its domestic defense industry. The memorandum of understanding, formalized in Hamburg, Germany, outlines plans for a factory capable of producing “tens of thousands” of 155mm artillery shells annually.
The deal covers the design, planning, and construction of a state-of-the-art facility equipped with a modern shell forging and filling line. It also emphasizes regional supplier integration and workforce development, with construction scheduled to begin in spring 2026. Initial production is expected to start approximately one year later.
The plant will be managed under a joint venture structure, with Rheinmetall Waffe Munition holding 51 percent and Latvia’s State Defense Corporation controlling 49 percent. The collaboration highlights Latvia’s strategic aim of achieving greater defense self-sufficiency while contributing to NATO’s collective readiness.
Officials noted that the facility will secure national supply chains, reduce dependence on imports, and position Latvia as a potential ammunition hub for allied nations. Once operational, the site will incorporate a complete production cycle—including forging, filling, testing, and quality assurance—and create at least 150 local jobs. The project mirrors similar efforts across the Baltics, including Lithuania’s 2024 decision to contract Rheinmetall for an ammunition plant in Baisogala worth $190 million.
