Rheinmetall and its Romanian partner Romarm will build a plant for powders and explosives manufacturing under a project financed by the European Union’s Act in Support of Ammunition Production (ASAP).

This would be Rheinmetall’s second investment in Romania after the military systems and equipment producer announced on February 1 that it is taking over a majority 72.5% stake in Romanian vehicle maker Automecanica Medias, mentioning the plant’s proximity to Ukraine.

The German company’s presence in Romania means that forces deployed on NATO’s eastern flank will be able to count on shorter response times and more robust supply chains, the company explained in February.

ASAP aims to ramp up ammunition production capacity across Europe, and the European Union has already approved EUR 500 million in financing for 31 projects, with the Romanian plant being one of them, Cursdeguvernare.ro reported. This funding will leverage additional investment from industry through co-financing, resulting in a total investment of around EUR 1.4 billion in the supply chain.

ASAP focuses on powder and explosives, which are bottlenecks for ammunition shell production, and will allocate some three-quarters of the programme to them.

The Union will invest EUR 248 million in powder manufacturing capacity and EUR 124 million in explosives manufacturing capacity.

Thanks to measures already taken, the European annual production capacity for 155 mm shells had already reached 1 million per year in January 2024.

With this, the EU will help Member States refill their stocks and deliver ammunition to Ukraine by anticipating bottlenecks and shortages in the defence supply chains.

iulian@romania-insider.com

(Photo source: Belish/Dreamstime.com)