Hanwha to Build Ammunition Plant in Estonia

South Korean defense company Hanwha Aerospace has announced a €100 million investment package to develop Estonia’s defense industry.

ERR reported on this.

The project includes the construction of a 40 mm ammunition plant with an investment of €25 million. According to the plan, the joint venture with local companies will be capable of producing more than 300,000 rounds per year.

Plans also include establishing a service and maintenance center for equipment and expanding cooperation with Estonian defense companies in research and development.

According to the company’s press release, the economic effect from direct investments and joint R&D projects is estimated at around €160 million. As a result, the total investment package could reach €260 million.

Estonian Defense Minister Hanno Pevkur told ERR that the investments are part of the contract for the purchase of Chunmoo multiple-launch rocket systems.

“The condition of this contract was Hanwha’s commitment to invest in the Estonian defense industry. Now this process is moving to the stage of specific bilateral agreements with Estonian enterprises,” Pevkur noted.

According to him, Hanwha Aerospace will partially transfer advanced technologies to Estonia. The sides also plan to jointly develop products aligned with the Korean company’s interests in the region.

The Minister also noted that, in addition to supplying K9 Thunder self-propelled howitzers and Chunmoo MLRS systems, Hanwha is among the potential candidates to participate in the Estonian Navy modernization program.

Estonia’s plans to establish domestic ammunition production were first announced in early 2024. The country planned to create a defense industrial park covering about 100 hectares.

Basic infrastructure was to be built using state funds, after which interested companies would construct their own production facilities within the industrial park. Under the plan, the first batches of ammunition are expected to be produced in August 2026.

In January 2026, Estonia officially commissioned its first explosives production facility for ammunition. The Nitrotol plant was opened in the new defense industrial park in Ämari.