Europe’s defence industry marked a significant milestone this week as Germany’s Rheinmetall inaugurated the continent’s largest ammunition factory in Unterlüß, Lower Saxony. The €500mn facility underscores Europe’s urgency in boosting weapons production both to support Ukraine and to replenish its own depleted stockpiles.
Expanding Ammunition Production
The new plant will focus on producing 155mm artillery shells — a critical supply line for Ukraine’s war effort. Rheinmetall expects initial output to reach 25,000 rounds this year, scaling up to 350,000 annually by 2027. Combined with production from other sites across Europe, the company currently manufactures about 700,000 shells per year, representing a substantial share of NATO’s goal to reach 2mn shells annually by the end of 2025.
NATO secretary-general Mark Rutte, who attended the opening ceremony, praised the facility as “extremely important” and highlighted the increasing pressure from Russia and China, who continue to produce weapons at what he called “an incredible rate.”
Strategic and Political Support
German defence minister Boris Pistorius and vice-chancellor Lars Klingbeil were among the senior officials present, reflecting Berlin’s political commitment to rearmament. Chancellor Friedrich Merz has unlocked unlimited borrowing powers to fund a sweeping increase in defence spending, further positioning Rheinmetall as a key beneficiary of Europe’s military build-up.
Chief executive Armin Papperger emphasized that the facility’s completion in just over a year demonstrated Germany’s capacity to move quickly “when the conditions are right.” He also announced new contracts, including a €550mn ammunition plant in Romania and another planned project in Bulgaria.
Wider Implications
Rheinmetall’s expansion highlights both the scale and urgency of Europe’s rearmament. The company is also preparing for large orders of tanks and armoured vehicles as EU states and NATO members ramp up their defence budgets in response to Russia’s war in Ukraine.
The opening of the Unterlüß plant symbolizes Europe’s shift towards a long-term strategy of deterrence, strengthening its industrial capacity to sustain both Ukraine’s battlefield needs and its own defence readiness.
