Memorandum of Understanding Signed on the Establishment of an Artillery Ammunition Production Facility in Latvia

Photo: Ministry for Economics and State Chancellery

On Thursday, 25 September 2025, in Hamburg, Germany, a Memorandum of Understanding was signed on the construction of a large-calibre artillery ammunition production facility in Latvia. The agreement was signed by Ingrīda Ķirse, Board Member of “State Defence Corporation” Ltd. (SIA “Valsts aizsardzības korporācija”) and Armin Papperger, Chief Executive Officer of the German defence industry enterprise “Rheinmetall AG”.

The signing ceremony was attended by Prime Minister of Latvia Evika Siliņa and Minister for Economics Viktors Valainis.

A joint venture is planned to be established for the construction of the facility. The facility shall be operated by a joint venture between Rheinmetall Waffe Munition GmbH (51%) and the Corporation (49%). The project is expected to attract investments exceeding EUR 200 million, while over a ten-year period the facility’s export could surpass EUR 3 billion.

The project also received government support on Tuesday, 23 September, when the Government of Latvia accepted the informative report “On the Establishment of an Artillery Production Facility in Latvia”.

Ingrīda Ķirse, Head of the Corporation: “We undertake this responsibility with the utmost commitment – to jointly develop an artillery ammunition production facility in Latvia. I am confident that all the necessary preconditions are in place, as the project brings together several key components. These include the Corporation’s mandate to meet the needs of our National Armed Forces and to develop Latvia’s defence industry by building production capacity, Rheinmetall’s extensive industry experience and expertise, as well as its high standards and international recognition. This synergy forms a strong foundation for a partnership that will foster industrial development and strengthen the security of Latvia and the wider region.”

I. Ķirse admitted that the planned project represents a logical continuation of the Corporation’s activities. The company has recently begun implementing its first major defence industry project – ROLLO, a modular charge assembly facility for artillery ammunition.

A. Papperger, CEO of Rheinmetall AG: “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. At Rheinmetall, we are committed to supporting our customers as a reliable partner with first-class services. I am confident that we will also build similar partnerships for ammunition production in other countries”.

Prime Minister E. Siliņa: “Signing the Memorandum 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. I have been directly involved in this process because I believe that investing in our defence industry is investing in the safety and future of our people.”

V. Valainis, Minister for Economics: “This agreement demonstrates that Latvia is purposefully developing its defence industry as an important sector of the national economy. We are speaking about new investment volumes, high value-added jobs, and technologies that will benefit our entire economy. Latvian companies will gain opportunities to participate in international supply chains and become part of the modern European defence ecosystem.”

Minister for Defence Andris Sprūds: “The establishment of the production facility in Latvia is a project of international significance entrusted to the Corporation. Its implementation will provide Latvia with a unique opportunity to acquire knowledge and build experience in ammunition manufacturing from our partners – companies with longstanding expertise in military production – while also promoting technology transfer.”

The artillery ammunition production facility project will strengthen the industrial base and innovation capacity. It will also deliver economic benefits through new jobs and expanded export opportunities, while fostering Latvia’s closer integration into the European Union’s defence industry.

On the visit to Germany and industrial development

The Memorandum of Understanding was signed during a visit to Germany by a large Latvian business delegation led by Prime Minister E. Siliņa and Minister for Economics V. Valainis. More than 180 representatives from companies and organisations across various sectors are participating in the trade mission in Hamburg and Rostock.

This visit highlights the increasingly close economic and security ties between Latvia and Germany, bringing together science, business and the defence industry within a unified cooperation platform.

The trade mission will continue in Rostock on 25 and 26 September, where the delegation will meet with companies from various sectors and participate in the Latvia–Germany Business Day. The event will bring together more than 250 participants and will focus on developments in energy, digitalisation, infrastructure and the defence industry.

Earlier this spring, the Cabinet of Ministers approved the Defence Industry and Innovation Support Strategy for 2025–2036. Within this framework, the Ministry of Economics, the Ministry of Defence, State Defence Corporation Ltd, and the Investment and Development Agency of Latvia have initiated close cooperation on the development of defence industry projects. The Ministry of Economics has already allocated more than EUR 200 million across its programmes to support the defence industry, including business incubation, research and development, product commercialisation, and large-scale investment projects.

About the “State Defence Corporation”

The Corporation was established following a decision by the Government of Latvia in November 2023. Its aims are to support the long-term development of Latvia’s defence industry, manage investments in the sector, and coordinate processes related to the production of military goods. Through these activities, the Corporation contributes to strengthening the supply capabilities of the NAF, supporting the growth of Latvia’s defence industry, and ensuring the security and continuity of international supply chains. The Corporation works in sectors that require significant state involvement and are not served by the private sector.

The Corporation also fosters national and cross-border cooperation and partnerships. The company is a wholly state-owned enterprise, with the Ministry of Defence acting as its shareholder.

INFROMATION:

AGNESE KORBE 
State Defence Corporation 
Communication and Stakeholder Relations Manager
+371 29110062 
agnese.korbe@defencecorporation.lv 
defencecorporation.lv
linkedin.com/defence-corporation

MINISTRY of ECONOMICS
Public Relations Unit
prese@mod.gov.lv