ARCA Baltics Operations to Build €300 Million Ammunition Factory in North Kiviõli

In the North Kiviõli defence industry park in Estonia, ARCA Baltics Operations will begin producing 155 mm artillery ammunition. The total investment amounts to approximately €300 million, and the completed ammunition factory is expected to create up to 1,000 jobs in the region, with production planned to start in 2028.

“With the establishment of large-calibre ammunition production, Estonia is taking an important step in developing its defence capabilities and ammunition industry. ARCA is a rapidly expanding defence company that has in recent years developed a significant ammunition production hub in Turkey. ARCA Baltics Operations, established in Estonia, will build a factory in North Kiviõli where the primary focus will be on producing large-calibre 155 mm ammunition, including extended-range variants. Under the agreement, the Estonian state will also have the option to procure ammunition from this major producer if needed. In addition, the agreement signed today brings an investment of hundreds of millions of euros into the Estonian economy and creates hundreds of new jobs,” said Minister of Defence Hanno Pevkur.

ARCA Baltics Operations will produce 155 mm artillery ammunition, mortar ammunition of various calibres, and 122 mm rockets in the North Kiviõli defence industry park. The company will invest €300 million to build the necessary production infrastructure, including equipment and storage facilities. The manufacturer plans to create up to 1,000 new jobs in the area.

The Estonian company ARCA Baltics Operations OÜ is affiliated with the Turkish defence industry group ARCA Defense, which recorded export volumes exceeding €3 billion last year. The group operates nine factories and employs approximately 5,000 people, with activities spanning not only defence and aviation but also the energy and construction sectors.

Under the agreement, the state will grant the company use of a 141-hectare site in the North Kiviõli defence industry park and will invest up to €10 million in access roads, fencing, and the establishment of necessary electricity, gas, and water connections.

“ARCA has successfully established a significant large-calibre ammunition production capability in Turkey, and their recent experience in building ammunition factories, along with their market knowledge, is a major advantage,” said Tambet Tõnisson, Head of State Assets at the Estonian Centre for Defence Investments. “The company’s development plan and land requirements are well aligned and fit effectively within the Kiviõli defence industry park.”

The parties are cooperating to ensure that ammunition production can begin in 2028. The official signing ceremony will be marked in early May in Turkey during the SAHA Expo 2026.

To identify companies that will operate in Estonia’s defence industry parks, the Estonian Centre for Defence Investments launched a selection tender in early April 2025. The national designated spatial plan has been approved for the Ermistu and North Kiviõli sites, while planning procedures continue for the Piirsalu and Aidu pre-selected areas.

Four companies have been selected to establish production in the defence industry park in Ermistu, Pärnu County: Nitrotol OÜ, Frankenburg Technologies OÜ, Infinitum Strike OÜ, and the UK-based Thor Industries Ltd through its Estonian-registered entity Odin Defence OÜ. The park is likely able to accommodate one or two additional manufacturers.