Latvia is set to bolster its domestic defense industry through a €275 million ($321 million) agreement with German defense company Rheinmetall to build a new ammunition production facility.
The memorandum of understanding, signed in Hamburg, outlines plans for a facility capable of producing tens of thousands of 155mm shells annually. The project covers design, construction, and planning of a modern shell forging and filling line, integration of regional suppliers, and local workforce development. Construction is scheduled to begin in spring 2026, with initial production expected roughly a year later.
The facility will operate as a joint venture, with Rheinmetall Waffe Munition holding 51 percent and Latvia’s State Defense Corporation 49 percent. The initiative aims to enhance national defense self-sufficiency, secure supply chains, and reduce import dependency, while positioning Latvia as a regional hub for partner states.
The plant will feature a complete production chain, including forging, filling, testing, and quality assurance, creating at least 150 local jobs and integrating Latvian companies into the supply chain. Neighboring Baltic nations are pursuing similar efforts; Lithuania awarded Rheinmetall a $190 million contract in November 2024 to build an ammunition plant in Baisogala.
