BERLIN (Reuters) -Rheinmetall plans to build a new ammunition plant in Latvia, the German defence conglomerate said on Thursday, expanding the ability of the Baltic nation bordering Russia to defend itself.
Countries across Europe have been racing to increase their defence capabilities in the wake of the war in Ukraine in an effort to deter Russia from attempting to take more territory.
Rheinmetall has benefited from those efforts, and CEO Armin Papperger is actively seeking similar partnerships with other countries and acquisitions to quickly expand production.
According to a memorandum of understanding, Europe’s largest ammunition producer will own 51% of the shares in the plant, while Latvia’s State Defence Corporation will hold the rest.
Papperger signed the MoU in the northern German city of Hamburg on Thursday in the presence of Latvian Prime Minister Evika Silina, who called it a “clear step” towards strengthening the country’s security and developing its defence industry.
Some 275 million euros ($322.74 million) will be invested in Latvia for the plant, which is expected to have an annual capacity of several tens of thousands of artillery shells.
Rheinmetall opened a new plant in the German state of Lower Saxony at the end of August that when fully operational is expected to become the largest ammunition plant in Europe.
The group also manufactures artillery shells in Spain and plans to build a similar plant in Lithuania, as well as in Romania and Bulgaria. A plant could also be built in Ukraine.
($1 = 0.8521 euros)
(Reporting by Matthias Inverardi, Writing by Miranda Murray, editing by Alexandra Hudson)
