Published by Global Banking & Finance Review®
Posted on November 4, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleLithuania partners with Rheinmetall to build a propellant production facility, investing over 400 million euros to boost defense capabilities.
By Andrius Sytas
VILNIUS (Reuters) -Lithuania on Tuesday signed a memorandum of understanding with German defence conglomerate Rheinmetall for production of propellants in the country, the company said.
Rheinmetall earlier launched the construction of a 300 million euro 155 mm artillery ammunition factory in Lithuania, scheduled to go into operation in the second half of 2026, with production eventually reaching tens of thousands of projectiles per year.
The newly announced Centre of Excellence would have the capacity to produce several hundred thousand propellant modules per year, Rheinmetall said.
"This is the centre of excellence of (gun)powder, and this is the most important thing at the moment, because that is the bottleneck...here in Europe, of powder systems and propellant systems," Rheinmetall CEO Armin Papperger said in Lithuania.
The centre would also include production facilities for energetic components and combustible cartridge cases.
Papperger told Lithuanian news wire BNS in an inteview that the investment would amount to more than 400 million euros.
"The launch of negotiations with Rheinmetall for the second factory in Lithuania shows our country's ambition and undiminished potential," Lithuanian President Gitanas Nauseda said in a separate statement.
Both factories will be operated by Lithuanian-registered Rheinmetall Defence Lietuva, in which the German group has a 51% stake with two Lithuanian state-owned companies holding the remaining 49%.
Rheinmetall has a separate joint venture in Lithuania to maintain combat vehicles for the German army there, and expects to build another artillery plant in neighbouring Latvia in the near future.
(Reporting by Andrius Sytas, editing by Louise Breusch Rasmussen, Terje Solsvik; Editing by Kirsten Donovan)
Propellant production involves creating materials that can produce thrust when burned, commonly used in ammunition and rockets.
An artillery ammunition factory is a facility that manufactures ammunition used in artillery systems, including shells and propellants.
A Centre of Excellence is a designated facility or team that provides leadership, best practices, research, support, and training for a specific area of expertise.
Foreign investment refers to investments made by individuals or entities in one country into businesses or assets in another, often leading to economic growth and job creation.
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