Bulgaria and Rheinmetall to Build Ammunition and Propellant Plant Amid EU Push for Defense Production

Germany’s Rheinmetall will partner with the Bulgarian government to construct a major ammunition and gunpowder production facility in Bulgaria. The move reflects Europe’s accelerating efforts to rebuild its defense industrial base amid sustained demand for 155mm artillery shells driven by the war in Ukraine.

Strategic Partnership Between Bulgaria and Rheinmetall

On June 10, Bulgarian Prime Minister Dimitar Glavchev announced that the country would host a new munitions production complex in collaboration with Germany’s Rheinmetall AG. The facility will manufacture both artillery shells—likely including NATO-standard 155mm rounds—and gunpowder propellants. The announcement follows months of negotiations between Sofia and Berlin as part of broader European Union initiatives to ramp up defense output.

The project is expected to be executed through a joint venture between Rheinmetall and VMZ Sopot, Bulgaria’s largest state-owned arms manufacturer. VMZ has historically produced Soviet-caliber munitions but has been pivoting toward NATO standards since Bulgaria joined the alliance in 2004. This partnership marks one of the most significant upgrades in Bulgarian defense production capacity since the end of the Cold War.

Facility Scope: Gunpowder Lines and Shell Assembly

While full technical specifications have not yet been disclosed publicly, Bulgarian Economy Minister Petko Nikolov confirmed that the plant will include facilities for both gunpowder synthesis—likely nitrocellulose-based propellants—and final shell assembly lines. This vertical integration is critical given Europe’s current bottlenecks in propellant supply chains.

The plant is expected to produce:

• Artillery shells (likely starting with NATO-standard 155×52 mm)
• Modular charge systems or bagged propellants
• Possibly fuzes or shell casings depending on future expansion

Rheinmetall has not confirmed whether it will transfer full manufacturing technology or retain some proprietary processes within Germany.

EU Strategic Context: EDIRPA and ASAP Programs

This initiative aligns closely with two key European Commission programs: EDIRPA (European Defence Industry Reinforcement through common Procurement Act) and ASAP (Act in Support of Ammunition Production). Both aim to rebuild European ammunition capacity after decades of underinvestment.

The EU has committed over €500 million under ASAP alone to support projects that expand shell output across member states. According to Thierry Breton, EU Commissioner for Internal Market, Europe must reach a production target of one million artillery shells annually by end-2024—a goal currently unmet due to shortages in explosives like nitrocellulose.

Bulgaria’s new plant could become a critical node in this supply chain given its geographic proximity to Ukraine and existing rail infrastructure suited for military logistics.

Bulgaria’s Shifting Role in NATO’s Eastern Flank

Bulgaria’s participation marks a significant shift from being primarily an arms exporter of Soviet-standard calibers toward becoming an integrated part of NATO’s industrial ecosystem. Since Russia’s full-scale invasion of Ukraine in February 2022, Bulgaria has quietly supplied large volumes of weapons—including legacy stocks—to Kyiv via intermediaries such as Poland.

This new joint venture with Rheinmetall represents Sofia’s first major step into high-volume Western-standard munitions manufacturing. It also signals deeper German-Bulgarian defense cooperation at a time when Berlin is seeking reliable partners on NATO’s eastern flank who can scale up quickly without long permitting delays seen in Western Europe.

Operational Timeline and Investment Outlook

The Bulgarian government has not yet released firm construction timelines or budget figures. However, sources close to the deal suggest initial operations could begin within two years if permitting proceeds without delay. Rheinmetall has recently accelerated similar projects elsewhere—for example, its new propellant factory under construction in Unterlüß, Germany—and may apply lessons learned there.

Funding may come from a mix of national investment incentives (including tax breaks), EU co-financing under ASAP/EDIRPA frameworks, and private capital from Rheinmetall itself. Given that VMZ Sopot already owns land zoned for military-industrial use near Kazanlak—a traditional arms hub—the site selection process could be expedited significantly.