Latvia plans to strengthen its domestic defense sector with a €275 million ($321 million) contract with German defense firm Rheinmetall to establish a state-of-the-art ammunition manufacturing facility.
Signed in Hamburg, the memorandum of understanding details a facility designed to produce tens of thousands of 155mm shells annually. The agreement encompasses the design, construction, and planning of a modern shell forging and filling line, integration of regional suppliers, and development of a skilled local workforce. Construction is slated to begin in spring 2026, with the first production expected around one year afterward.
The facility will operate as a joint venture, with Rheinmetall Waffe Munition holding a 51 percent stake and Latvia’s State Defense Corporation owning 49 percent. This initiative represents a strategic move toward defense self-reliance amid heightened security concerns across Europe, aiming to secure national supply chains and reduce reliance on imports, while establishing Latvia as a supplier hub for partner nations.
The planned plant will incorporate a complete production chain, including forging, filling, testing, and quality assurance processes. At least 150 local jobs are projected, and Latvian firms will be embedded in the supply network. Similar projects are underway in the region; for instance, Lithuania awarded Rheinmetall a $190 million contract in November 2024 for an ammunition facility in Baisogala.
