Construction of the new DEMZ ammunition plant in Lithuania
The Ukrainian defense company DEMZ plans to build a new ammunition plant in Lithuania, in the Prenai district. An investment agreement was signed on August 14 by the Ministry of Economy and Innovation of Lithuania. Construction of the new plant is scheduled to begin in the fall of 2026, with production set to start in late 2027. DEMZ will operate on two sites: in Alytus at existing facilities and in the Prenai district at the new plant.
The project aims to create up to 450 jobs. Initially, the plant's products will be supplied to the Ukrainian military, and later the market is expected to expand to other allied countries. The enterprise will manufacture ammunition and components according to NATO standards. It is important to note that the exact investment amount has not been disclosed by the Lithuanian authorities; however, the mayor of Alytus stated that the company plans to invest tens of millions of euros in the region.
Cooperation and other initiatives
Furthermore, in October 2024, Ukraine and Lithuania signed a letter of intent concerning the construction of a facility for the production of explosives. DEMZ also intends to engage in the development and testing of new defense products in Lithuania.
Meanwhile, the state-owned enterprise Giraitės Ginkluotės Gamykla remains a key enterprise in Lithuania. The Lithuanian authorities are investing in expanding its production, including a second line for medium-caliber ammunition. Giraitės Ginkluotės Gamykla collaborates with the American company Northrop Grumman and the Norwegian NAMMO in the production of 30mm ammunition.
It is also worth noting that the company Rheinmetall is implementing a project in Lithuania for the production of 155mm artillery shells in Baisogala, in the Radviliškis district, with production planned for mid-2026. These initiatives signify the active development of defense manufacturing in Lithuania in the face of modern challenges.
The planned construction of the DEMZ ammunition plant in Lithuania is an important step towards strengthening the defense capability of the country and its NATO partners, especially in light of the increasing threats in the region.
The creation of new jobs and attracting investment will also have a positive impact on Lithuania's economy. Additionally, cooperation with other enterprises, such as Giraitės Ginkluotės Gamykla and Rheinmetall, highlights the active growth of the defense industry in the country, which can positively influence the military readiness of Lithuania and its allies.