More than €1 Billion in Gunpowder and Shell Production: Bulgaria and Rheinmetall Sign Agreement to Build a Plant

Bulgaria and the European defense giant Rheinmetall have signed an agreement to build a plant to produce gunpowder and large-caliber artillery ammunition.

Reuters reported this.

The deal was signed on Tuesday, October 28, for more than EUR 1 billion. Officials said the project is important for both Bulgaria and Europe as a whole.

This is because countries in the region are seeking to modernize their defense capabilities after Russia’s invasion of Ukraine.

The plant will be a joint venture between Rheinmetall and the Bulgarian company VMZ, in which the German company will hold a 51% stake and VMZ will hold a 49% stake.

Bulgaria will finance its share with a loan under the European SAFE mechanism to stimulate investment in defense.

Rheinmetall CEO Armin Papperger and VMZ Director Ivan Getsov signed the contract at a ceremony in Sofia.

“With the signing of this contract, we mark the beginning of a strategic partnership between the Bulgarian state and a German technology company that will change the future of the Bulgarian defense industry,” Bulgarian Prime Minister Rosen Zhelyazkov said after the signing ceremony.

Rheinmetall’s CEO said the plant would be built within 14 months and that Bulgaria would make a significant contribution to Europe’s and NATO’s ammunition needs.

The Bulgarian government said that the project will create about 1,000 jobs and restore a key element of Bulgaria’s defense capability.

The production will include gunpowder, 155mm artillery shells, and the latest modular metal charges.

Militarnyi reported on the agreement between the parties back in August, when it also became known that the plant’s design capacity would be 100,000 shells.