Rheinmetall will build a new ammunition and propellant plant in central Romania under a joint venture with the state-owned Pirochim Victoria, as EU member states move to expand industrial capacity for artillery supplies amid the war in Ukraine.
The agreement was announced in Bucharest on 3 November by Prime Minister Ilie Bolojan and Rheinmetall chief executive Armin Papperger. Construction is scheduled to begin in 2026 and take three years. The facility, in the town of Victoria, Brașov County, is expected to create about 700 jobs.
The investment is valued at roughly €535 million. Romania plans to support the project with a €120 million state-backed loan channelled via the EU’s Security Action for Europe (SAFE) instrument, which provides long-maturity financing to member states for defence industrial projects. SAFE, established by EU regulation in May, has a headline capacity of up to €150 billion.
Rheinmetall said the Victoria site will produce double- and triple-base propellants for artillery systems and will be configured for large-scale output of modular charges. Papperger described the plant as a high-end facility designed to address sustained demand across Europe and allied markets. According to statements at the signing, the company is planning capacity for about 60,000 charges—equivalent to roughly 300,000 modular charges—once fully operational.
The project adds to Rheinmetall’s footprint in Romania. In 2024 the group acquired a 72.5 per cent stake in Automecanica Mediaș, since rebranded Rheinmetall Automecanica SRL, which produces military trucks, armoured personnel carriers and related systems. Rheinmetall has also signalled plans for a training and excellence hub in the country to develop local industrial skills.
Bucharest has presented the agreement as part of a broader reindustrialisation push within the EU framework. Prime Minister Bolojan said the partnership positions Romania as an emerging player in Southeastern Europe’s defence supply chain. The government intends to draw on SAFE to co-finance its participation, in line with the instrument’s objective of accelerating joint procurement and industrial scaling for priority capabilities.
The move follows a series of announcements by Rheinmetall across the Balkans. On 28 October, the company and Bulgaria’s state-owned VMZ agreed a joint venture of about €1 billion to produce energetic materials and 155mm shells, with Sofia financing its stake in part through SAFE. The Bulgarian site is intended to restore regional gunpowder capacity and supply NATO-standard artillery components.
EU institutions have pressed industry to increase output of artillery rounds and propellants to meet Ukrainian requirements and rebuild national stockpiles. SAFE complements earlier programmes and is designed to lower the cost of capital for member states investing in new lines, retooling older facilities and creating redundancy across the bloc. In Romania’s case, authorities have indicated the country expects a significant SAFE allocation to support defence-related industrial projects.
The Victoria plant addresses a persistent bottleneck in Europe’s ammunition supply: energetic materials and modular charge systems, without which higher shell output cannot be sustained. As several EU states sign long-term artillery contracts, demand for propellant powders has become a critical constraint. Rheinmetall’s Romanian site is intended to operate alongside new capacity in neighbouring Bulgaria, with both facilities tied into allied procurement frameworks.
Romania has assumed a more prominent role within NATO since Russia’s full-scale invasion of Ukraine. It has hosted training activities, including an F-16 pilot hub, and has contributed equipment to Kyiv. The government’s support for the Victoria project is aligned with these commitments and with EU policy to reinforce the continent’s defence technological and industrial base.
Once operational, the plant is expected to deliver a steady volume of artillery propellants calibrated to European and NATO standards. Officials said the configuration will allow for scaling as required by demand signals from common procurement initiatives. With construction beginning in 2026 and completion targeted three years later, the site would come on stream as EU member states transition from emergency purchases to multi-year replenishment contracts.
