Europe’s biggest defense manufacturer Rheinmetall will open two plants in Bulgaria to produce artillery shells and gunpowder, deepening the German corporation’s position as a critical supplier of ammunition for the Armed Forces of Ukraine (AFU), recent news reports from Sofia said.
CEO Armin Papperger, during Tuesday meetings with senior Bulgarian politician Boyko Borissov, agreed Düsseldorf-headquartered Rheinmetall would construct a NATO-standard 155mm shell production line on the premises of Vazovski Mashinostroiteleni Zavodi, a major Bulgarian defense products manufacturer, the Bulgarian Telegraph Agency reported.
Borissov broke the news during a live-stream video published on local and later mainstream media. An agreement for the shell production operation will be drawn up in three weeks, and the plant’s target capacity will be 100,000 shells per year, he said.
“We have informed the European Commission of these two projects, and we have ensured the funding on the part of the Bulgarian State through the SAFE (Strategic Technologies for Europe Platform) mechanism,” Borissov said.
“Rheinmetall, together with Bulgaria, will soon build at least two factories in Bulgaria, the first of which for artillery shells,” Papperger added. “Even more important is our gunpowder joint venture,” he said. The Bulgarian government and Rheinmetall will invest jointly over EUR 1 billion in the project, he said.
A former Prime Minister, Borissov heads the conservative political party Citizens for European Development of Bulgaria (GERB). The August meeting was Borissov’s third meeting with Papperger this year. The second factory would produce gunpowder, Papperger said.
On Wednesday NATO chief Mark Rutte was presiding in Unterlüß (Germany), site of a brand-new, state-of-the-art 155mm shell factory, a EUR 300 million project on which Rheinmetall broke ground in Feb. 2024. The German corporation’s success building the facility from the ground up in seventeen months—two or three times faster than the typical construction pace for such projects—was proof European industry was capable of meeting the military threat of Russia, Rutte said.
“This is absolutely crucial for our own security and also to keep supporting Ukraine in its fight today and to deter any aggression in the future,” he said. “We are being challenged… (but we) are on course to turn the tide on defence production.”
The massive 30,000 square meter Unterlüß facility will produce 350,000 shells a year by 2027. Artillery shell production across the continent is now six times greater than it was two years ago, Rutte said, in comments reported by AFP.
Speaking at the same opening event, Papperger said that the Unterlüß plant will help fill a German government munitions order worth EUR 8.5 billion placed in July 2024. Rheinmetall also recently signed a EUR 550 million cooperative production deal with Romania to manufacture gunpowder, with the factory planned to be up and running by early 2028, AFP reported.
In March Germany’s parliament approved constitutional changes allowing for the first time limited deficit spending if directed toward defense needs. Per numbers published by the defense ministry, German defense spending in 2029 will be EUR 162 billion, more than triple the defense budget in 2021.
Thursday price reports showed the value of a Rheinmetall share holding generally steady at EUR 1,634 a share, but down from a record high of EUR 1,889 on May 29. Rheinmetall stock prices rocketed following the German deficit-spending vote: In Feb. 2025 a Rheinmetall share usually could be bought for between EUR 750 and EUR 800.
According to open sources, Rheinmetall manufactures 155mm artillery shells in Germany, Spain, South Africa, and Australia either directly or through subsidiaries it controls. The company also is participating in joint production with India, the Czech Republic, and Ukraine. Company global output reportedly was, in 2024, about 1.1 million shells. New facilities are planned in Hungary and Bulgaria.
Across Europe, arms manufacturers led by Rheinmetall have expanded military factory floor space from 790,000 m² in 2020–2021 to 2.8 million m² in 2024–2025—a “rearmament of historic proportions,” Bloomberg reported on Wednesday. German officials have said that much of the shell output is destined for the AFU.
Ukrainian President Volodymyr Zelensky in public statements has said that Ukraine produces between 40 and 50 percent of its arms needs, but is still short in some types of weaponry and that overall artillery shell stocks are thin. Official statements by Ukraine’s Army General Staff suggest the AFU burns through 3,000–5,000 artillery shells of all types in a day on average, and twice that in intense fighting. Military analysts usually estimate Ukraine’s artillery shell expenditures per year at between 1.5 and 2 million munitions of all types.
The United States, in the months following Russia’s invasion of Ukraine, led international efforts to deliver artillery shells and even the howitzers to fire them to the hard-pressed AFU. Emergency shipments of tens of thousands of NATO-standard 155mm shells, some flown in from as far away as Israel and South Korea by U.S. military transport aircraft, played a critical role in battles in Ukraine’s eastern Donbas region in May–July 2022.
In that offensive the Kremlin massed most of its forces in an attempt to destroy the badly outnumbered AFU and conquer Ukraine’s eastern Donbas region. American shell deliveries, above all in the critical 155mm caliber, helped the AFU fight the Russian army to a standstill.
The U.S. halted all donated arms deliveries to Ukraine in Feb. 2022 following the takeover of the White House and Congress by President Donald J. Trump and his supporters. Since then the U.S. has permitted only limited sales of U.S. weaponry to Ukraine on cash-on-the-barrel-head terms. Since the Trump team has come to power the U.S. has cut off all arms assistance to Ukraine, including shells, at least twice. Pentagon officials linked the halts with low shell stocks for U.S. forces.
In May 2024 the U.S. opened a new 155mm artillery munitions plant in Mesquite, Texas, intended to bulk up American shell production by setting up three shell production lines churning out a collective 100,000 shells per month by 2025.
Contrasting with factories owned and operated by Rheinmetall as businesses, the Mesquite facility is U.S. government-owned and not profit-seeking, with the arms giant General Dynamics running operations as a contract manager. A May New York Times article profiling the factory called it “the future of American military ammunition production.”
In June 2025 U.S. defense industry media reported the Mesquite facility had missed multiple deadlines for starting up production lines, and that shell counts as of June for the single line put into operation were not 100,000 but 36,000 shells.
Reports blamed manufacturing equipment delays and unexpectedly high supply chain costs, in some cases exacerbated by new U.S. tariffs placed on production line component vendors overseas. The Pentagon was considering firing General Dynamics and seeking a replacement better able to organize American shell production, some reports said.