Breaking News: Bulgaria and Rheinmetall to Build Europe's Largest Gunpowder and 155mm Shell Plants.

On August 25, 2025, the Bulgarian News Agency BTA reported that Bulgaria and Germany’s Rheinmetall are preparing to establish two major defense industry plants in Bulgaria, including what is expected to be the largest gunpowder factory in Europe and a facility for NATO-standard 155 mm artillery shells. The announcement follows high-level talks between GERB party leader Boyko Borissov and Rheinmetall CEO Armin Papperger in Düsseldorf. With Europe facing urgent demand for ammunition supplies amid the ongoing war in Ukraine, this project emerges as a highly significant development for NATO and the Bulgarian defense industry.
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If realized, Bulgaria will host Europe’s largest gunpowder factory and a strategically vital 155 mm shell plant, placing the country at the heart of NATO’s ammunition supply chain at a time of unprecedented demand (Picture source: U.S. Army)

The planned factory for 155 mm shells, located at the grounds of the Vazovski Mashinostroiteleni Zavodi (VMZ), will have an intended capacity of around 100,000 rounds annually. Rheinmetall, already operating several production lines in Germany, Hungary, and soon Ukraine, is expanding its network to respond to critical shortages of artillery ammunition. These shortages have become evident throughout NATO operations in support of Ukraine, where high-intensity warfare has exhausted stockpiles at a pace unseen in decades. By setting up joint ventures in Bulgaria, Rheinmetall seeks to diversify its European production footprint, while Sofia reaffirms its position as an emerging industrial hub in the defense sector.

Historically, Rheinmetall has expanded its ammunition production capacity through a combination of domestic facilities and international partnerships. Its plants in Germany and Hungary already produce large quantities of 155 mm rounds, with recent commitments to supply hundreds of thousands of shells to Ukraine. The planned Bulgarian site would replicate this operational model, creating a decentralized but interconnected network capable of sustaining long-term demand. For Bulgaria, this marks the largest defense industrial investment in decades, supported through the European Commission’s SAFE mechanism for strategic defense technologies.

The advantages of situating such a plant in Bulgaria are multiple. The country possesses longstanding expertise in military manufacturing, notably through VMZ’s Cold War legacy as one of Eastern Europe’s major arms producers. The planned joint ventures combine German technological leadership with Bulgarian industrial infrastructure, resulting in modern facilities designed to meet NATO interoperability standards. Similar developments have occurred in Central and Eastern Europe, such as the Czech company’s partnership with the U.S. Army to build a new Iowa-based plant expected to reach 432,000 shells annually, as reported by Army Recognition. These parallel initiatives highlight how both Europe and the United States are racing to restore mass-production capabilities that had significantly declined after the Cold War.

Strategically, the establishment of these factories carries deep geopolitical implications. For NATO, increasing domestic shell production strengthens resilience against supply chain disruptions and reduces reliance on external partners. For Bulgaria, it elevates its role from a peripheral supplier to a core contributor in European defense. The project also comes at a time when Rheinmetall is investing heavily in Ukraine itself, creating a regional defense ecosystem directly tied to ongoing security challenges. By supplying NATO-standard 155 mm rounds, the Bulgarian facility will benefit not only Bulgaria’s armed forces but also European allies operating systems such as the PzH 2000, Caesar, Krab, and Zuzana howitzers, all of which rely on Rheinmetall’s ammunition.

Borissov emphasized that the Bulgarian government and Rheinmetall would invest more than €1 billion into these projects, ensuring rapid implementation within weeks. The factories are not only expected to enhance NATO’s capacity but also to stimulate Bulgaria’s economy, create skilled jobs, and anchor the country more firmly in Europe’s defense supply chain. This effort complements Bulgaria’s wider ambition to modernize its armed forces and develop advanced defense technologies, with a parallel project already mentioned for drone design and production.

The announcement, still at the planning and ratification stage, represents one of the most ambitious defense industrial undertakings in Eastern Europe. If realized, Bulgaria will host Europe’s largest gunpowder factory and a strategically vital 155 mm shell plant, placing the country at the heart of NATO’s ammunition supply chain at a time of unprecedented demand. With backing from Rheinmetall and the European Union, these initiatives could reshape Bulgaria’s role within the alliance and secure Europe’s capacity to sustain high-intensity operations for years to come.