Romania signs agreement with Germany’s Rheinmetall for EUR 500 mln powder factory

The Romanian government and one of the most important European arms manufacturers, Rheinmetall, signed a cooperation agreement regarding the construction of a powder factory on Monday, November 3. The value of the investment is EUR 500 million, and Romania may be able to secure EU funding for it through the Security Action for Europe program, which will support the rearmament of Europe through soft loans extended to EU member countries.

The new factory will be located in Brașov County and will lead to the creation of roughly 700 new jobs.

The signing of the cooperation agreement was attended by prime minister Ilie Bolojan, who stated that Romania is becoming a major player in the defense industry in southeastern Europe.

“I am honored to conclude this contract signing, which is, practically, the end of one negotiation, but the beginning of another package of important negotiations that we will carry out today. With this partnership, Romania is beginning to emerge as a player with potential in the defense industry in southeastern Europe,” Bolojan said.

The prime minister also noted that part of the production chain will be local, together with suppliers from Romania.

“I welcome Rheinmetall’s willingness to renegotiate the partnership contract so that part of the supply chain of the future factory will be local. In this way, the production unit will be better integrated into the Romanian economy,” he added.

The head of the executive also announced that the government is very close to determining the projects that will be developed and financed through the European Union’s SAFE program. Equipment plans will be approved by the Supreme Council of National Defense, or CSAT, in the second half of November, after which they will be presented to the European Commission.

In turn, Armin Papperger, director of Rheinmetall AG, stated that the factory in Romania will be the most modern company in the world for the production of double- and triple-base powders.

“Rheinmetall Victoria SA will be the most modern company in the world, at this moment, for the production of double- and triple-base powders. These powders are needed all over the world, and especially in Europe, to provide support for defense forces. They are also needed in Romania. We are building capacities of about 60,000 charges, that is, 300,000 modular charges, which means one of the largest capacities in the world for artillery systems,” said Armin Papperger.

The German executive mentioned that 200 tons of powder will be produced for local needs. The future factory involves an investment of approximately half a billion euros.