Artillery shells.
Rheinmetall and VMZ Partner JV for Manufacturing Artillery Shells, Gun Powder in Bulgaria: SOPOT, Bulgaria, October 28, 2025 — In a landmark agreement, Rheinmetall, a global leader in defense technology, and Bulgaria’s state-owned arms manufacturer VMZ (Vazovski Mashinostroitelni Zavodi) have announced the creation of a joint venture focused on the development and production of artillery shells and energetic materials. The deal, which represents one of the largest investments in ammunition production in recent years, involves a total commitment of approximately €1 billion.
Rheinmetall will hold a 51% stake in the joint venture, while VMZ will retain 49%. The production facility will be based in the Sopot region of Bulgaria, covering an expansive area of around 100 hectares. Expected to generate approximately 1,000 new jobs, the facility will play a pivotal role in strengthening both local and NATO defense capabilities.
A Strategic Move for European Defense
The new venture marks a significant expansion for Rheinmetall, further solidifying its role as a key player in the European defense sector.
Armin Papperger, CEO of Rheinmetall AG, expressed his gratitude for the Bulgarian government’s trust in the company’s capabilities, stating, “We are grateful for the Bulgarian government’s confidence in our capabilities. With the new production facility, we are further expanding our leading role as a manufacturer of artillery ammunition to continue supporting the defense capabilities of the European Union and NATO.”
The joint venture will be responsible for producing a wide range of artillery shells and energetic materials, including propellant charges, which will be crucial for maintaining the military readiness of both the Bulgarian Armed Forces and NATO allies. The site is expected to have an annual production capacity of approximately 100,000 artillery shells, with propellant charges produced for up to 150,000 shells. Additionally, around 1,300 tonnes of propellant powder will be manufactured annually.
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Boosting Bulgaria’s Defense Industry
The new facility is expected to significantly enhance VMZ’s production capabilities, with the first projectile casings set to roll off the production line in 2027. Energetic materials, which are crucial for artillery shells, are slated to be produced beginning in 2028. This cooperation will not only support Bulgaria’s defense sector but also strengthen its role within NATO, contributing to the broader goal of European defense autonomy.
VMZ, with a long history of arms manufacturing dating back to its founding in 1947, will benefit from Rheinmetall’s advanced technological expertise, enabling the company to significantly ramp up its output of high-quality ammunition for both domestic and international markets.
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A €1 Billion Investment in Europe’s Security
The joint venture between Rheinmetall and VMZ is one of the most substantial investments in the European defense sector in recent years, reflecting the growing demand for high-performance artillery ammunition amid increased geopolitical tensions and the ongoing need for robust defense capabilities. As NATO continues to prioritize collective security, this collaboration aligns with broader strategic goals of ensuring a reliable and diversified supply of military-grade materials within Europe.
The new facility will also help meet the increasing demand for artillery shells and propellant materials, particularly as European countries look to replenish stocks and enhance their military readiness. The production of energetic materials and propellant powder is expected to further support VMZ’s broader business, with the joint venture creating both direct and indirect economic benefits for the region.
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Rheinmetall’s Expanding Global Presence
Rheinmetall is a major player in the defense industry, with a global presence that spans 174 sites worldwide. The company generated €9.8 billion in sales in 2024 and employs more than 40,000 people. As an integrated technology group, Rheinmetall is a leader in both defense and civilian sectors, driving innovation across a variety of industrial applications.
The establishment of this joint venture with VMZ is part of Rheinmetall’s broader strategy to expand its influence in the European defense sector, ensuring that it remains at the forefront of military technology development. The company’s portfolio includes everything from artillery systems to vehicle electronics, radar systems, and armored vehicles.
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The joint venture between Rheinmetall and VMZ is poised to be a game-changer for the Bulgarian defense industry and for Europe’s broader defense capabilities. With the production facility set to begin operations in the coming years, the partnership promises to strengthen both Bulgaria’s role in NATO and Rheinmetall’s position as a leading supplier of artillery ammunition in Europe.
As the global security environment continues to evolve, this €1 billion investment underscores the importance of strengthening local defense industries and ensuring that NATO members are equipped to meet the challenges of the 21st century. The new facility in Bulgaria is set to play a pivotal role in achieving these goals, producing advanced, reliable artillery ammunition for the defense of Europe and beyond.
