The German arms manufacturer Rheinmetall plans to build a new plant in Lithuania for the production of 155-millimetre artillery shells.
The German defence contractor and the government of the Baltic EU and NATO member state signed a memorandum of understanding on Tuesday in the presence of the Lithuanian Prime Minister Ingrida Šimonytė, Economy Minister Aušrinė Armonaitė, and Defence Minister Laurynas Kasčiūnas. Details of the deal were not disclosed.
Armonaitė said Rheinmetall's investment will be the largest in the Lithuanian defence sector to date, and one of the largest in the country's history.
"This will boost our industry, our economy and the security of our region," she said at the ceremony, which was broadcast live on Lithuanian television. "We are ready to continue working with the company to ensure that this success story moves forward quickly."
Talks on an investment agreement are expected to begin soon, she added.
Defence Minister Kasčiūnas emphasized that the production of ammunition in the country was one of the lessons of the war in Ukraine. "Independence from global supply chains and production here in Lithuania are an integral part of national security and defence," he said.
Rheinmetall confirmed plans to build an artillery production plant in Lithuania in mid-March at its annual press conference for 2023. An armoured brigade of the German Armed Forces, the Bundeswehr, is also to be permanently stationed in the Baltic state in future.
Rheinmetall has been operating a maintenance centre in Lithuania together with the defence company Krauss-Maffei Wegmann (KMW) since the summer of 2022.
Armoured vehicles of the NATO combat units stationed in the Baltic states and the Leopard 2 main battle tanks handed over by Germany to Ukraine are maintained there.
