Rheinmetall has unveiled plans to establish a new production facility for 155 mm calibre artillery ammunition in Latvia, involving an investment of €275m ($321m).
In this connection, the German defence contractor has signed a memorandum of understanding (MoU) with the Latvian Government. It was signed in Hamburg, Germany, with Latvian Prime Minister Evika Siliņa in attendance.
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As per the MoU, a new joint venture will be created between Rheinmetall Waffe Munition, which will own a 51% majority stake, and the Latvian State Defence Corporation, which will hold the remaining 49%.
The JV will assume responsibility for operating the new ammunition facility.
The move is part of Latvia’s strategy to enhance its defence capabilities and develop its independent defence sector.
The facility is expected to secure a reliable supply of ammunition for the National Armed Forces of Latvia and bolster supply chains, benefiting both the country and its partners.
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By GlobalDataRheinmetall CEO Armin Papperger said: “We are delighted to be able to contribute to Latvia’s national sovereignty in the field of ammunition. At the same time, the production line will strengthen our position as the world’s leading manufacturer of artillery ammunition.”
According to GlobalData’s ‘Latvia Defense Market 2023-2028’ report, published in January 2024, Latvia’s defence budget is projected to experience a substantial escalation from $1bn in 2023 to nearly $1.7bn by 2028, marking a notable expansion in military spending over the five-year period.
Scheduled to commence in spring 2026, construction of the new production line will introduce a facility equipped with shell forging and filling capabilities.
Production on the calibre artillery ammunition facility is expected to start a year from the commencement of the construction.
It is projected to create at least 150 local jobs and integrate regional companies into its value chain, thereby stimulating the domestic economy.
Latvian Prime Minister Evika Siliņa said: “Signing this MoU is a clear step towards strengthening Latvia’s security and developing our defence industry. By aiming to establish partnership with Rheinmetall Latvia not only builds stronger national defence, but also contributes to security of supply in Europe, enhancing industrial capacity as well as facilitating economic growth.”
This development follows Rheinmetall’s contract with Lithuania, Latvia’s neighbour, in late 2024 to establish a similar ammunition production facility.
The Lithuanian plant in Baisogala is soon to commence construction and will reflect the design and capacity of the planned Latvian facility, signifying a concerted effort in regional defence enhancement.
In August 2025, Rheinmetall inaugurated an advanced artillery ammunition production facility in Unterluess, Germany.
