Latvia is advancing its defense industrial base through a 275-million-euro ($321 million) deal with Rheinmetall to establish a new ammunition production facility. Signed in Hamburg, the memorandum of understanding calls for a factory designed to produce significant volumes of 155mm artillery rounds each year, ensuring a steady supply for Latvia and allied partners.
The project encompasses design, planning, and construction of a modern plant featuring a forging and shell-filling line, along with systems for testing and quality control. Scheduled to break ground in spring 2026, the facility aims to achieve initial production by 2027. A key element of the program is the integration of Latvian suppliers into the value chain and the training of a local workforce.
Ownership will be split between Rheinmetall Waffe Munition (51 percent) and Latvia’s State Defense Corporation (49 percent), reflecting a balanced public-private partnership. The move is part of a broader European trend, as nations increase investments in domestic production capacity to mitigate supply shortages and reduce reliance on external imports amid heightened regional security pressures.
Beyond reinforcing self-sufficiency, the facility is expected to generate at least 150 jobs and could establish Latvia as a regional ammunition hub within the Baltic area. Similar initiatives are already underway in neighboring states, with Lithuania awarding Rheinmetall a $190-million contract in late 2024 to construct its own ammunition plant in Baisogala.
