Romania enters strategic cooperation era with Germany as Rheinmetall invests €500 million in new gunpowder factory
Romania has taken a decisive step in revitalizing its national defense industry by signing a landmark cooperation agreement with German defense giant Rheinmetall, one of Europe’s leading military technology companies. The agreement, formalized at the Victoria Palace in Bucharest, marks the beginning of a long-term strategic partnership that aims to position Romania as a key player in Europe’s defense and security sector.
A major investment in Romania’s defense industry
Prime Minister Ilie Bolojan hailed the agreement as not only the culmination of complex negotiations but also the start of a new phase in Romanian-German defense collaboration, emphasizing its importance amid growing regional security challenges.
“With this partnership, Romania begins to emerge as a potential player in the defense industry of Southeastern Europe. I am pleased that Rheinmetall sees in us a reliable and serious partner, strengthening its presence in Romania,” Bolojan stated.
The new gunpowder production facility, to be built in Victoria, Brașov County, represents an investment of around €500 million and will create about 700 direct jobs, with thousands more in related sectors such as construction, logistics, and materials manufacturing. Once operational, the plant will significantly reduce Romania’s dependence on imported military components, providing the country with domestic production capacity for critical ammunition materials.
Local supply chain and industrial integration
The Romanian government and Rheinmetall have also agreed to ensure that a significant portion of the supply chain will involve Romanian companies. This decision is expected to integrate local firms into the broader European defense production network, stimulating growth and innovation in the national economy.
“I welcome Rheinmetall’s readiness to collaborate with Romanian suppliers so that our competitive firms can strengthen their capabilities and become part of Europe’s defense industry chain,” Bolojan added.
Strengthening the Romania–Germany partnership
The project is also the first tangible outcome of the Romania–Germany Joint Action Plan, signed earlier this year to deepen bilateral economic and strategic ties.
According to the prime minister, Romania is concurrently negotiating access to EU funds through the SAFE program, designed to strengthen the Union’s defense production capacities. The country’s contribution to the project will partly rely on this funding, pending approval by the Supreme Council of National Defense (CSAT).
A strategic boost for European security
Construction is set to begin in 2026 and last about three years, turning Romania into one of the few EU countries capable of independently producing gunpowder for ammunition — a capacity increasingly sought after since Russia’s full-scale invasion of Ukraine in 2022.
Rheinmetall CEO Armin Papperger emphasized that the new facility will play a critical role in Europe’s rearmament efforts:
“The ammunition powder produced here is needed worldwide and especially in Europe. The strategy is to make Romania an integral part of both the European and NATO defense ecosystems.”
Professionalism and national interest
Romania’s Minister of Economy, Radu Miruță, highlighted the importance of competent management within state-owned defense enterprises to ensure the project’s success:
“This is why I insist on having professionals leading our state companies — because only with capable people and solid frameworks can we make strategic investments like this work. I will not compromise when it comes to Romania’s national interest.”
With this agreement, Romania not only attracts one of the largest defense investments in its history but also consolidates its position as a strategic partner for both Germany and the European Union, contributing to regional stability and collective security.
