Lithuania Pursues Further Defense Industry Collaboration with Rheinmetall
Lithuania is actively engaged in discussions with the German defense conglomerate Rheinmetall regarding a potential second significant investment project in the country. This development comes shortly after the official groundbreaking ceremony for Rheinmetall's first major investment, a 155mm artillery ammunition plant, which took place on November 4, 2025, in Baisogala, Radviliškis District. The ongoing talks underscore Lithuania's strategic ambition to strengthen its defense industrial base and enhance regional security.
Strategic Ammunition Plant Under Construction
The recently commenced ammunition plant represents a substantial commitment, with an investment of up to €300 million (approximately $345 million). This facility, operated by the joint venture Rheinmetall Defense Lithuania, will span approximately 340 hectares and is designed to produce tens of thousands of 155mm artillery shells annually. Initial production is projected to reach 35,000 shells per year, with a ramp-up to 100,000 rounds by 2027. The project is expected to create up to 150 jobs, with some reports indicating up to 400 jobs across two shifts.
The groundbreaking ceremony was attended by prominent figures, including Lithuanian President Gitanas Nausėda, Prime Minister Inga Ruginienė, Minister of Economy and Innovation Edvinas Grikšas, and Rheinmetall CEO Armin Papperger. President Nausėda described the plant as 'the largest defense investment in country's history' and a 'strategic step aimed at building deterrence as a precondition for peace.' The facility is a joint venture between Rheinmetall, which holds a 51% stake, and Lithuanian state-owned companies Epso-G Invest and Giraitės Ginkluotės Gamykla (GGG). Operations are slated to begin in mid-2026. Additionally, a Memorandum of Understanding was signed to establish a Centre of Excellence for propellants, focusing on energetic components and modular propellant charges.
Discussions Underway for a Second Investment
The prospect of a second Rheinmetall investment was confirmed by Deividas Matulionis, chief national security adviser to President Nausėda. While specific details of this potential project remain undisclosed, Rheinmetall CEO Armin Papperger has previously mentioned plans for a drone factory in the context of the company's European expansion. Matulionis indicated that such projects are contingent on sufficient political commitment and financial capacity from the Lithuanian government.
Lithuania's favorable investment climate and increased European funding for the defense sector are key factors attracting international defense manufacturers. The country is also reportedly in discussions with several US and Scandinavian defense industry companies for future collaborations, signaling a broader effort to diversify and strengthen its defense capabilities.
Bolstering Lithuania's Defense Industry and Regional Security
These investments align with Lithuania's overarching strategy to become a regional hub for the defense and security industry. The nation has launched the 'Vytis' initiative, backed by €300 million in funding, aimed at boosting its defense industrial capabilities, fostering innovation, and enhancing international competitiveness. Lithuania is also increasing its defense spending, with an aim to allocate more than 5% of its GDP to military needs by next year. These efforts are part of a concerted drive to bolster national security and contribute to the collective defense of NATO's eastern flank.
5 Comments
Matzomaster
Turning Lithuania into an arms factory? This just makes us a bigger target.
Comandante
High defense spending at 5% of GDP? That's unsustainable and a huge burden on taxpayers.
Muchacho
Excellent news for national security! This is crucial for deterrence.
eliphas
The investment from Rheinmetall clearly boosts our deterrence posture and supports NATO's eastern flank, which is vital for security. Yet, we must ensure these military developments are always paired with robust diplomatic efforts to prevent rather than provoke conflict.
paracelsus
Strengthening our defense industry is a logical step given the geopolitical climate, providing both security and economic benefits. However, relying heavily on foreign defense giants like Rheinmetall raises questions about true national independence and long-term economic strategy beyond military goods.