Latvia has taken a significant step toward enhancing its domestic defense capabilities by entering into a substantial 275-million-euro ($321 million) agreement with the German defense company Rheinmetall. This partnership aims to establish a new ammunition production facility, a move that underscores Latvia’s commitment to bolstering its national defense industry amid a shifting security landscape in Europe.
The memorandum of understanding, signed in Hamburg, outlines the ambitious project, which is expected to manufacture “tens of thousands” of 155mm artillery shells each year. This fortification of the defense sector is seen as a critical step in securing Latvia’s supply chains and reducing reliance on foreign imports for vital military resources.
The facility is anticipated to feature a state-of-the-art shell forging and filling line, with a focus on incorporating regional suppliers into its operations. Local workforce development is also a key component, with plans for construction to commence in spring 2026 and initial production slated to start in 2027.
This facility will operate as a joint venture, with Rheinmetall Waffe Munition holding a majority stake of 51%, and Latvia’s State Defense Corporation owning 49%. The collaboration seeks to create a robust supply chain, including job opportunities in the local economy, with estimates suggesting the creation of at least 150 jobs.
Latvian Prime Minister Evika Siliņa articulated the broader implications of the agreement, characterizing it as an investment not just in the defense sector, but also in the safety and future of Latvia’s citizens. “Signing this deal is a clear step towards strengthening Latvia’s security and developing our defense industry,” she stated, emphasizing the strategic importance of enhancing the country’s defense infrastructure.
Rheinmetall’s CEO, Armin Papperger, highlighted the global expansion of the company’s ammunition production facilities while reinforcing their role in supporting national sovereignty for nations like Latvia. The facility is designed to integrate a full production chain encompassing forging, filling, testing, and quality assurance processes, ensuring that the entire production cycle is managed within the region.
Latvia is not alone in this strategic endeavor; its Baltic neighbors are pursuing similar initiatives to augment their defense capabilities. Notably, Lithuania has awarded Rheinmetall a $190-million contract for an ammunition plant in Baisogala, reinforcing a coordinated effort among the Baltic states to enhance regional defense resilience.
Overall, Latvia’s investment in this new production facility marks a pivotal moment in the country’s defense strategy, aiming to secure its military capabilities and simplifying supply logistics for allied nations in the face of contemporary geopolitical challenges.
