Latvia has begun preliminary talks with German defense company Rheinmetall on building a military plant on its territory that could produce ammunition, the Lithuanian portal LRT reported on May 19, 2025. The talks are at an early stage and their outcome has not yet been determined, but, as a Rheinmetall representative noted, discussions with high-ranking officials in Riga have already taken place. If the deal is concluded, the format of cooperation could be similar to the agreement signed by Lithuania, where Rheinmetall is building a plant to produce 155 mm artillery shells.

Latvia's initiative is related to the need to strengthen the Baltic states' defense capabilities amid the ongoing conflict in Ukraine and growing tensions with Russia. Latvian Defense Minister Andris Spruds emphasized that the region must be prepared for any scenario. Latvia has already planned to build its own plant for the production of modular propellant charges for artillery ammunition in Iecava, together with the Finnish-Norwegian company Nammo and the French-Italian Nexter. The plant, worth €12 million, of which €1 million will be provided by the EU, is expected to start operations in 2026 and produce up to 50 charges annually.

The talks with Rheinmetall complement these efforts. According to Bloomberg, Latvia has also held discussions with Italy’s Leonardo SpA, indicating Riga’s desire to diversify its defense partnerships. A potential Rheinmetall plant could produce 155mm shells, which are in demand by NATO, especially in support of Ukraine. Lithuania, for example, signed a €180 million deal with Rheinmetall in June 2024, and construction of a plant in Baisogala began in 2024, with plans to produce tens of thousands of shells by mid-2026.