United to win: Ukrainian company builds ammunition plant in Lithuania and plans production launch in 2027
The war in Ukraine requires constant replenishment of ammunition stocks, while NATO countries are also trying to increase their own production capacity. For Lithuania, this is also a matter of strengthening the defense industry on the Alliance's eastern flank.
Ukraine and Lithuania agreed to establish a new production facility in October 2024, when the parties signed a letter of intent to build an explosives plant.
According to the outlet, on August 14, the country's Ministry of Economy and Innovation signed an investment agreement with the company on the construction of a new plant in the Prienai district.
Construction is scheduled to begin in autumn 2026, while production is expected to start at the end of 2027. Lithuanian authorities have not disclosed the exact amount of investment. At the same time, the mayor of Alytus said the company plans to invest tens of millions of euros in the region.
DEMZ will operate at two sites at once:
The project provides for the creation of up to 450 jobs.
The facilities will produce ammunition and components in line with NATO standards. In the first stage, the company plans to supply products to the Ukrainian military and, later, to other allied countries as well.
In addition to producing ammunition, DEMZ plans to develop and test new defense products in Lithuania.
Background
In recent years, Lithuania has been turning into one of the key hubs for expanding the ammunition industry on NATO's eastern flank. In 2026, several major projects are being rolled out in the country at the same time, involving both German and Ukrainian capital.
One of the key enterprises remains the state-owned Giraitės Ginkluotės Gamykla plant. Lithuania is investing in expanding its production, including plans for a second line to produce medium-caliber ammunition.
The plant also cooperates with the US company Northrop Grumman and Norway's NAMMO. Among other things, this involves producing 30-mm ammunition.
German defense group Rheinmetall is implementing a separate major project in Lithuania. It involves a plant for producing 155-mm artillery shells in the Radviliškis district. The company plans to start production in Lithuania in mid-2026. The new plant will be located in Baisogala, Radviliškis district.
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19 of August 2026
