Rheinmetall expands Hungary ammo maker

The expansion plan of the new ammunition plant of Rheinmetall in Varpalota, west Hungary, has been underway since January, the German automotive and arms manufacturer has revealed. The extension will increase the size of the plant by 20 hectares to some 120 hectares and payroll to around 200 employees.

The multi-phase expansion plan at the munitions maker predates Russia’s full-scale invasion of Ukraine nearly two years ago. Hungarian holding company N7 is overseeing construction, on behalf of joint venture company Rheinmetall Hungary Munitions Zrt.

Plant will provide ammo for Hungarian army, exports

The strategic Hungarian investment laid its foundation stone last year in response to a shortfall of ammunition in Europe and NATO and to reduce the continent’s dependence on overseas imports. Production of the munitions will begin later in the year.

The Varpalota factory will initially make 30mm medium-calibre ammunition for Lynx infantry fighting vehicles built at Rheinmetall’s new plant in Zalaegerszeg, west Hungary.

Production will in early 2026 expand to include 155mm artillery shells for PzH 2000 howitzers and 120mm ammo for the Leopard 2 main battle tank and its successor the Panther KF51 EVO. The Dusseldorf-based company will also develop and perform acceptance testing at the plant.

Explosive plant also on the way

Also a joint venture between Rheinmetall and N7, an additional research department explosive (RDX) plant is simultaneously being built on the same site, which the German company says will significantly help to secure supply of the ammunition raw material for European production. The Varpalota plant will partly meet the ammunition needs of the Hungarian army, with the rest set for export. 

Rheinmetall recently announced an acquisition in Medias, central Romania, expanding its current presence in Central and Eastern Europe (CEE) beyond Hungary, Lithuania and Austria. The German form had sales of EUR 6.4bn in 2022, and has a global payroll of some 34,000 employees at 139 locations.