German weapons manufacturer Rheinmetall signed a deal Monday to build a gunpower factory in NATO member Romania, as Europe rearms in the face of the growing Russian threat.
A total of more than 500 million euros ($576 million) is being invested to establish the plant in the central town of Victoria, Rheinmetall said in a statement.
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Rheinmetall and Romanian company Pirochim Victoria are establishing a joint venture to set it up, with Germany’s biggest defence group to hold a 51-percent stake.
“Our strategy is for Romania to become an integral part of the European and NATO industrial ecosystems,” said Rheinmetall CEO Armin Papperger, who attended a signing ceremony in Bucharest for the project with Prime Minister Ilie Bolojan.
The factory will produce gunpowder as well as artillery charges, and employ around 700 people. Production is expected to start in 2028.
Romania, sitting on NATO’s eastern flank, has been among European countries racing to bolster its defences since Russia’s 2022 full-scale invasion of Ukraine.
Bordering war-torn Ukraine, Romania has been particularly rattled by the growing Russian threat -- in September, it summoned Moscow’s ambassador to lodge a protest after a Russian drone entered its airspace during an attack on Ukraine.
Rheinmetall, which has been setting up new plants across Europe as demand booms, saw its shares jump over three percent in Frankfurt after the announcement of the Romanian deal.
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Last week Bulgaria and the arms maker announced a joint venture to build a weapons factory in the country.
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