Lithuania to Hold 49% Stake in Rheinmetall Ammunition Plant Joint Venture
German defense Giant to build Artillery Shell Factory in Lithuania with Local Partners
Baisogala, Lithuania – German defense contractor Rheinmetall is set to establish a major artillery shell production facility in Lithuania, partnering with local companies in a joint venture. The factory, slated for construction in Baisogala, Radviliškis district, represents a significant investment of over $180 million and is expected to create at least 150 new jobs.
The joint venture will see Rheinmetall holding a 51% stake, while Lithuanian partners will own the remaining 49%. A newly established investment management company, Epso-G Invest, owned by the state-owned energy group Epso-G, will hold a 48% stake. The remaining 1% will be held by Lithuania’s state-owned munitions factory, Giraites Ginkluotes Gamkykla (GGG).
Epso-G Invest is expected to formally announce its participation in the joint venture later this month. Sources indicate that GGG, while currently lacking the financial capacity to independently undertake such a large project, may eventually acquire a larger share in the venture within the next five to six years.Rheinmetall has a history of establishing joint ventures with partners in other countries for collaborative projects, typically holding a 50-51% stake. This Lithuanian venture aligns with the company’s strategy of expanding its global footprint and securing strategic partnerships.
Epso-G, responsible for managing Lithuania’s electricity and gas transmission companies Litgrid and Amber Grid, has a proven track record in managing large-scale infrastructure projects. The company previously oversaw the construction of a physical barrier on Lithuania’s border with Belarus, the GIPL gas pipeline connecting Lithuania and Poland, and is currently coordinating the synchronization of Lithuania’s power grid with Western Europe, decoupling it from Russia and Belarus.
Production at the new factory is scheduled to commence in mid-2026, focusing on the manufacture of 155mm artillery shells. The project has been granted “major investment project” status by the Lithuanian government, highlighting its strategic importance for the country’s defense industry and economic development.
In April,the Lithuanian government and Rheinmetall signed a memorandum of understanding outlining the terms of the factory’s construction. The facility’s location in Baisogala was strategically chosen for its logistical advantages and access to skilled labor.
Lithuania Welcomes German Artillery shell Factory: Interview with Defense Analyst
NewsDirectory3.com sat down with Dr. Henrikas Kavaliauskas, a leading defense analyst specializing in Eastern European security, to discuss the implications of Rheinmetall’s investment in Lithuania.
NewsDirectory3.com: Dr. Kavaliauskas, Rheinmetall’s decision to build a major artillery shell factory in Lithuania is a significant development.What are your initial thoughts on this investment?
Dr. Kavaliauskas: This is a major win for lithuania’s defense industry and a clear sign of the country’s growing importance in NATO’s eastern flank. Rheinmetall is a world-leading defense contractor, and their decision to invest in Lithuania underscores the country’s commitment to bolstering its defense capabilities in light of the current security situation.
NewsDirectory3.com: The factory will produce 155mm artillery shells. How crucial is this type of munition in the current geopolitical landscape?
Dr. Kavaliauskas: 155mm artillery shells are a cornerstone of modern land warfare. Their versatility and range make them indispensable for both offensive and defensive operations. Given the ongoing war in Ukraine and the increased tensions with Russia,the ability to produce these shells domestically is vital for lithuania’s security.
NewsDirectory3.com: The joint venture structure with Lithuanian partners is noteworthy. What are the potential benefits and risks of this approach?
Dr. Kavaliauskas: This model allows Lithuania to benefit from Rheinmetall’s expertise and technology while also fostering the development of its own defense industrial base. however, it’s vital to ensure that Lithuanian companies gain valuable knowledge transfer and eventually increase their ownership stake in the venture.
NewsDirectory3.com: What does this investment signal about Lithuania’s role in NATO and its commitment to collective defense?
Dr. Kavaliauskas: It demonstrates Lithuania’s willingness to take concrete steps to enhance its military capabilities and contribute to NATO’s collective defense posture. This investment sends a strong signal of deterrence to potential adversaries and reinforces Lithuania’s position as a reliable ally.
NewsDirectory3.com: Thank you for your insights,Dr. Kavaliauskas.