Rheinmetall Open New Ammunition Plant in Hungary ,Increases European Ammunition Production Capacity

Defense News ,Europe :- The ongoing construction of the new Rheinmetall ammunition plant in Várpalota, Hungary, by the Hungarian holding company N7 for the joint venture company Rheinmetall Hungary Munitions Zrt., is set to undergo its planned expansion with the commencement of the second construction phase in January 2024.

The expansion concept predates February 2022 and the Russian invasion of Ukraine, representing a strategic Hungarian investment in collaboration with Rheinmetall. This initiative aims to address the anticipated surge in ammunition demand in Europe and NATO, which was already evident at the time, and to reduce Europe's reliance on overseas imports.

A year ago, the foundation stone was laid for the initial phase of the Rheinmetall plant in Várpalota, where Rheinmetall Hungary Munitions Zrt. will manufacture ammunition for various systems. The first phase focused on producing 30mm medium-calibre ammunition for the Lynx infantry fighting vehicles, set to be constructed at Rheinmetall's new tank plant in Zalaegerszeg, Hungary, with production starting in 2024.

The upcoming "Várpalota 2.0" expansion will enlarge the plant by 20 hectares, reaching a total of approximately 120 hectares. The workforce is expected to grow to around 200 employees.

This expansion also entails diversifying the product range to include new ammunition types, specifically 155mm artillery shells for the PzH 2000 self-propelled howitzer and 120mm ammunition for the Leopard 2 main battle tank, along with its potential successor, the Panther KF51 EVO. Production is scheduled to commence in early 2026, with Rheinmetall planning development and acceptance testing at the Várpalota facility.

As part of Hungary's strategic capacity expansion for ammunition production, an additional plant for the production of explosives (RDX) is concurrently being built on the same site. This venture, a collaboration between Rheinmetall and N7, is crucial for ensuring the security of the supply of this essential raw material for ammunition production in Europe.

The output from Várpalota will cater to the needs of the Hungarian armed forces, with the remaining production allocated for export. Rheinmetall, in addition to the newly constructed plant in Hungary, currently operates ammunition production facilities in Germany, Spain, Switzerland, Austria, Italy, South Africa, Australia, and the United States.