Rheinmetall expands defence footprint with Europe’s biggest ammunition factory

Rheinmetall AG is set to inaugurate what will become Europe’s largest ammunition factory, opening its new facility in Unterlüß, near Hanover, after a brief delay. The launch comes as discussions on security guarantees for Ukraine gain momentum and Germany pushes ahead with a major military expansion.

The official opening ceremony on August 27 will be attended by Chief Executive Officer Armin Papperger, German Finance Minister and Vice Chancellor Lars Klingbeil, Defence Minister Boris Pistorius, and NATO Secretary General Mark Rutte, according to foreign media.

Rheinmetall began construction of the plant in early 2024, with former German Chancellor Olaf Scholz present at the groundbreaking. The facility, initially expected to open in late spring or early summer 2025, began trial operations in the second quarter of this year.

Once fully operational in 2027, the factory will have the capacity to produce up to 350,000 rounds of 155mm artillery ammunition annually. The site comprises two main buildings — one dedicated to shell production and the other to loading, assembly, and packaging. The company also plans to expand production at the plant to include rocket artillery starting in 2026.

The project represents an investment of approximately €500 million ($581 million) and is expected to create more than 500 jobs in northwestern Germany.

Rheinmetall has been rapidly expanding its defence production capabilities across Europe. Earlier this year, it completed a major facility in Weeze, near the Dutch border, where it manufactures centre fuselage sections for Lockheed Martin Corp.’s F-35 fighter jet.

The company’s weapons and ammunition segment has become a key driver of growth, with sales reaching €724 million in the first half of 2025, contributing to the firm’s unprecedented performance surge over the past three years.

Beyond Germany, Rheinmetall’s 155mm ammunition production network spans several European countries. On Monday, Papperger announced plans to build an ammunition factory in Bulgaria, along with a gunpowder facility — a project first outlined in April.

The company also operates plants in Spain and Hungary, is constructing another in Lithuania, and is in talks with the government of Latvia about establishing an additional site there.

In Ukraine, where Rheinmetall already runs a tank repair hub, plans are underway to build an ammunition factory. However, Papperger noted during an August call with analysts that the project has been delayed by bureaucratic hurdles, without providing specifics. He added that Ukrainian authorities are seeking to double the planned production capacity, but emphasised that additional funding would be required to move forward.

By Tamilla Hasanova