BERLIN
German weapons manufacturer Rheinmetall is planning to build a new ammunition factory in the Baltic country of Latvia, the company announced in a statement Thursday.
Rheinmetall signed a memorandum of understanding with Latvia’s State Defense Corporation (SDC) in Hamburg on Thursday, with Latvian Prime Minister Evika Silina attending the ceremony.
Rheinmetall will own 51% of the factory’s shares, which is expected to cost 275 million euros ($321 million), while the Latvian state-owned SDC will own the remaining 49%.
Silina hailed the deal as a step towards enhancing Latvia’s national security and the country’s developing defense industry.
Rheinmetall CEO Armin Papperger said the new ammunition production plant will strengthen the company’s position as a key artillery ammunition manufacturer.
As the war in Ukraine continues, many European countries have ramped up defense spending, driving a surge in sales for companies like Rheinmetall amid growing geopolitical instability.
Rheinmetall currently operates six factories in Germany and employs around 40,000 people globally. The firm also operates in Canada, the US, UK, Austria, Switzerland, Italy, Hungary, South Africa, and Australia.
Rheinmetall produces ammunition, tanks, armored transport vehicles, weapons, and anti-aircraft systems.
In August, the firm opened Europe’s largest ammunition factory in northern Germany, with an annual production capacity of 350,000 artillery shells expected by 2027.
In addition to producing shells in Spain, Rheinmetall is planning to establish further artillery shell plants in Lithuania, Romania, and Bulgaria.
Rheinmetall shares have surged by more than 1,800% since the outbreak of the Russia-Ukraine War.