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German defence group Rheinmetall will invest €400mn in a joint venture to produce propellant powders in central Romania, while the Romanian state will contribute €120mn and the existing facilities of Pirochim Victoria, Rheinmetall said in a press release on November 3. Rheinmetall will hold 51% of the new company and Pirochim Victoria 49%.
The partnership forms part of Bucharest’s wider effort to attract defence investment and expand its domestic industrial capacity.
The project also benefits from €47mn in support from the European Union’s Act in Support of Ammunition Production (ASAP) scheme, as well as additional funding from the Security Action For Europe (SAFE) programme.
The agreement was signed in the presence of Rheinmetall chief executive Armin Papperger and Romanian Prime Minister Ilie Bolojan.
Construction of the plant is scheduled to begin in 2026, with production expected to start within two years.
The facility will have an annual capacity of about 300,000 modular propellant charges, requiring roughly 750 tons of powder for the modular segment and a further 200 tons per year to cover local demand. The factory is expected to employ more than 700 people.
Rheinmetall said the investment addresses a critical shortfall in propellant powder, which has become a bottleneck for the defence industry. The company aims to reach an annual global production capacity of 20,000 tonnes of propellant powder by 2030, with the Romanian plant representing a key step towards that goal.
Romanian officials described the project as strategically significant for strengthening Nato’s eastern flank and reducing Europe’s dependence on external suppliers of ammunition raw materials.
“Propellant powder remains a strategic bottleneck within the defence industry. The new production facility in Romania is another step towards our goal of achieving an annual production capacity of 20,000 tonnes of propellant powder by 2030,” Papperger said, as quoted in the press release.
Pirochim Victoria was set up in 1936 by the Romanian state with German expertise, for the production of smokeless powder.
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