Bulgaria signs deal with Rheinmetall to build factory
Photo: Bulgaria and Rheinmetall have signed an agreement to build a factory (facebook.com/GeneralStaff.ua)
Bulgaria and the German defense giant Rheinmetall have signed a deal worth over €1 billion to build a factory producing gunpowder and 155mm artillery shells, according to Reuters.
Officials said the project is important for both Bulgaria and Europe as a whole, as the region seeks to modernize its defense capabilities following Russia's invasion of Ukraine.
The project will be a joint venture between Rheinmetall and the Bulgarian manufacturer VMZ, with the German company holding 51% of the shares and VMZ 49%. Bulgaria will finance its share through a loan under the European SAVE mechanism to increase defense investments.
The contract was signed by Rheinmetall CEO Armin Papperger and VMZ director Ivan Getsov at a ceremony at the Council of Ministers in the capital, Sofia.
"With the signing of this contract, we mark the beginning of a strategic partnership between the Bulgarian state and the German technology concern, which will change the future of the Bulgarian defence industry," said Bulgarian Prime Minister Rosen Zhelyazkov.
Papperger said the plant will be built within 14 months and that Bulgaria will make a significant contribution to Europe’s and NATO’s ammunition needs.
"Bulgaria's speed is like never before. With our second meeting, we are creating one of the best factories in Europe," he added.
The Bulgarian government says the project will create about 1,000 jobs and restore a key element of the country’s defense capability. Production will include propellant, 155mm artillery shells, and the latest modular charge systems.
Reuters notes that Rheinmetall is investing in several European countries to expand capacity and has alliances with other defense firms, including Italy’s Leonardo and the US group Lockheed Martin.
Rheinmetall is building new factories
Earlier, it was reported said the German defense group will build an artillery shell plant in Latvia, with construction due to start in spring 2026.
Rheinmetall will also build a new shell plant in Ukraine. According to Defence Minister Denys Shmyhal, land was allocated for the project in early September in a secure region of the country.
The company has also opened the EU's largest ammunition plant in Unterlüß near Hanover. Once it reaches full capacity in 2027, the factory will produce up to 350,000 artillery shells a year.
Rheinmetall will build two defense factories in Bulgaria to produce propellant, artillery shells, and drones.
It is expected that about 100,000 artillery shells will be produced in the first year.
