German defense giant Rheinmetall AG (XFRA-RHM) has signed a memorandum of understanding with Latvia’s State Defense Corporation (SDC) to build a new ammunition manufacturing facility in Latvia, marking a strategic expansion into the Baltic region.
The plant, valued at €275 million (approx. $321 million), will be majority owned by Rheinmetall (51%), with the Latvian government holding a 49% stake through its state owned defense entity. Latvian Prime Minister Evika Siliņa attended the signing ceremony, calling the deal a milestone for national security and the country’s growing defense sector.
Rheinmetall CEO Armin Papperger stated the facility will reinforce the company’s role as a leading supplier of artillery ammunition in Europe. The move comes amid heightened geopolitical tensions and increased defense spending across the continent, driven largely by the ongoing war in Ukraine.
The new Latvian plant adds to Rheinmetall’s growing global footprint, which includes operations in Germany, Canada, the US, UK, Austria, Switzerland, Italy, Hungary, South Africa, and Australia. In August, the company opened Europe’s largest ammunition factory in northern Germany, with a projected annual output of 350,000 artillery shells by 2027. Rheinmetall also plans to expand production in Spain, Lithuania, Romania, and Bulgaria, signaling a broader strategy to meet rising demand for military supplies.