Lithuania and Rheinmetall have finalised relevant contracts to initiate the construction of a new production plant for 155mm artillery ammunition in Baisogala.
The project represents a direct investment of €180m ($189.2m) in Lithuania. The relevant contracts include a land lease agreement and a supply contract for the procurement of 155mm ammunition.
The facility, covering an area of approximately 340 hectares, will feature shell manufacturing and load assembly pack operations.
Scheduled to begin operations by mid-2026, the plant will produce tens of thousands of 155mm calibre artillery shells annually.
Lithuania Prime Minister Ingrida Šimonytė said: “From day one, the dialogue between the Lithuanian Government and Rheinmetall has been based on a mutual understanding of this project’s necessity and urgency. I am very pleased that today, this cooperation has enabled the beginning of construction of the artillery ammunition production plant.
“Our defence needs, the importance of the shortest possible supply chains, and strong allied partnership between Lithuania and Germany underscore the need to maintain the momentum as we continue to work in the same spirit of cooperation.”
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The project is expected to create around 150 local jobs and aims to enhance the local economy and integrate local businesses into the value chain.
The initiative is part of a broader effort to bolster Lithuania’s defence capabilities.
Rheinmetall CEO Armin Papperger said: “We at Rheinmetall are very grateful for the trust Lithuania has placed in us. It is and remains our aspiration at Rheinmetall to be one of the pillars of national and international security provision.
“This long-term partnership with Lithuania confirms this once again.”
In June 2024, Rheinmetall and Lithuania Economy and Innovation Minister Aušrinė Armonaite signed an agreement to establish the German defence company in Lithuania.
The project has been granted ‘state significance’ status, allowing it to benefit from special investment and business conditions to expedite construction.
Rheinmetall recently reported a 35.7% increase in sales for the first nine months of fiscal year 2024, reaching €6.3bn compared to €4.6bn in the same period the previous year.
This growth is attributed to a dynamic market in the military sector, driven by demand from EU and NATO armed forces and ongoing aid for Ukraine.
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