Rheinmetall signs €1B deal for munitions factory in Bulgaria

The logo of the Rheinmetall armaments group can be seen behind a fence at the entrance to a Rheinmetall plant on August 27, 2025, at Lower Saxony, Unterluess | File Photo: Wolf von Dewitz/dpa

Sofia: German defence contractor Rheinmetall has signed a contract with Bulgaria worth €1 billion ($1.2 billion) for a joint venture to build a new factory for gunpowder and ammunition, Sofia announced on Tuesday.

Under the deal signed by Rheinmetall chief executive Armin Papperger and the executive director of Bulgaria’s state-owned defence company WMZ, Ivan Gezov, Rheinmetall holds 51% of the shares, while Bulgaria gets 49%.

The new plant, to be established on the WMZ premises near Sopot in central Bulgaria, is to produce gunpowder and 100,000 artillery shells per year in accordance with NATO standards. It is expected to create around 1,000 new jobs and could be completed within 14 months.

“We will build up enormous production potential,” Papperger said. He said that according to the Bulgarian government, the European Union and NATO need millions of shells.

“This project would not be possible without the synergy generated by the [European] Union and NATO to better defend Europe on behalf of its citizens,” said Bulgarian Prime Minister Rosen Zhelyazkov.

Bulgaria’s Economy Minister Peter Dilov said the partnership combines “Germany’s technological experience and Bulgaria’s industrial potential.”

Last month, dpa reported the German company had won a contract worth €444 million ($520 million) from a customer in Eastern Europe to supply ammunition.

Rheinmetall Expal Munitions, acting as a subcontractor to Global Military Products — which is contracted by the U.S. government — will provide 155-millimetre M107 projectiles with M4A2 propellant charges and 105mm M1 projectiles.

Of the total contract value, €170 million had already been booked as a pre-order, and €274 million has now been booked as new orders.

Deliveries are scheduled to begin in 2026 and are expected to be completed by June 2027.