Rheinmetall's €108B defence boom fuels Europe's largest arms expansion

Rheinmetall is rapidly expanding its defence production across Europe. The company's record €108.2 billion budget for this year is funding major new factories and upgrades. Projects in Germany, Romania, and Bulgaria will boost artillery shell and ammunition output significantly by 2027.

The company's largest investment is in Unterlüß, Germany, where a new €500 million plant will become Europe's biggest artillery ammunition factory. Once operational, it will produce 350,000 shells annually by 2027. This follows a sharp increase in Rheinmetall's 155-mm shell capacity, which rose from 70,000 in 2022 to 700,000 by early 2025.

In Romania, Rheinmetall is spending €535 million on a powder factory in Victoria, set to open in 2029. The site will support a wider pan-European production network. Meanwhile, a joint venture in Bulgaria will focus on gunpowder and ammunition, targeting 100,000 artillery shells per year.

Rheinmetall has also repurposed a former automotive supplier site in Berlin-Wedding. Now operated by Rheinmetall Waffe Munition GmbH, the facility will manufacture shell casings instead of car parts. Full-scale arms production there is expected to start in late 2026.

Modernisation efforts extend to anti-tank mines as well. RWM Italia and Agenzia Industrie Difesa signed a deal to upgrade hundreds of thousands of existing mines. RWM Italia will also lead the design of the new MATS-MK2 standard.

The company's order backlog has surged to €63.8 billion. Projections suggest it could more than double to €135 billion by the end of the year.

By 2027, Rheinmetall aims to produce 1.1 million 155-mm artillery shells annually. The new factories and upgrades will form a key part of Europe's defence manufacturing network. These expansions come as demand for military supplies continues to grow.