Lithuania, Rheinmetall sign letter of intent on ammunition factory

VILNIUS – The Lithuanian government and Germany's defense industry giant Rheinmetall signed in Vilnius on Tuesday a letter of intent on the construction of an ammunition factory in the country.

The document was signed by Economy and Innovation Minister Ausrine Armonaite, Defense Minister Laurynas Kasciunas, and Maximilian Froch, Director of Strategic Program Organization International at Rheinmetall.

The content of the document is not yet public.

At the ceremony, Prime Minister Ingrida Simonyte used a quote from Ukrainian President Volodymyr Zelensky, who has said that "freedom must be better armed than tyranny". 

"Today we understand this better than ever," she said.

The prime minister said she expects Rheinmetall's factory to be a significant addition to the list of defense industry initiatives being developed in Europe. 

Armonaite said that Rheinmetall's investment will be one of the largest in Lithuania's history and the largest among defense industry companies.

"It will give a boost to our industry, our economy and the security of our region," she said. 

According to the minister, Rheinmetall's investment shows that the German company "trusts Lithuania's talented people and believes that Lithuania is a safe country for significant investments".  

"We are ready to keep working with the company to ensure that this success story happens quickly," she added. 

Armonaite also announced that she has signed an order opening the way for the state to start negotiations with Rheinmetall on an investment agreement.

The minister told reporters on Monday that Lithuania would expect the main works, including the construction of the 155mm ammunition factory, to start later this year.

Government officials have confirmed that state-owned land in the northern district of Radviliskis is being considered as one of possible sites for Rheinmetall’s factory.

The land near Baisogala, a small town of about 1,800, is now operated by the Lithuanian University of Health Sciences (LSMU) on a loan-for-use basis.

Rheinmetall has also applied for its planned facility to be granted the status of a large-scale investment project. Special investment and business conditions usually apply to such projects.

The Lithuanian parliament last week started debating a legislative package, tabled by the Economy and Innovation Ministry, to facilitate the construction of factories by major Western arms and ammunition producers.