In a significant move to bolster defense capabilities amid rising regional tensions, German arms manufacturer Rheinmetall announced a partnership with Romanian firm Pirochim Victoria to establish a gunpowder factory in Romania. The deal, signed on Monday, entails an investment exceeding 500 million euros (approximately $576 million) and is part of a broader strategy to enhance Europe’s military readiness in light of the ongoing threat from Russia.
The factory will be situated in Victoria, a central town in Romania, where it is expected to produce gunpowder and artillery charges. The joint venture will be led by Rheinmetall, which will hold a 51-percent stake in the facility. The initiative is anticipated to create around 700 jobs, with production slated to commence in 2028.
During a signing ceremony in Bucharest attended by Rheinmetall CEO Armin Papperger and Romanian Prime Minister Ilie Bolojan, Papperger emphasized Romania’s strategic role as part of the European and NATO industrial framework. “Our strategy is for Romania to become an integral part of the European and NATO industrial ecosystems,” he stated.
Romania has been especially alert to security threats due to its geographical position on NATO’s eastern flank, sharing a border with war-torn Ukraine. Since Russia’s full-scale invasion of Ukraine in 2022, the Romanian government has actively sought to reinforce its defenses. Recently, it summoned the Russian ambassador to protest an incident involving a Russian drone that unintentionally crossed into its airspace during military operations against Ukraine.
The announcement of the new factory has positively impacted Rheinmetall’s stock, with shares rising over three percent on the Frankfurt exchange. The company’s expansion in response to increasing demand for defense materials is evident, as highlighted by a recent deal with Bulgaria to construct a weapons factory there as well.
