155mm shells have been in short supply. Credit: DVIDS.

The Rheinmetall ammunition plant in Várpalota, Hungary, is set for a significant expansion in its operations, the company announced on 30 January 2024.

Initially designed for manufacturing 30mm ammunition, the plant now plans to include the production of 155mm artillery shells and 120mm ammunition. 

European nations  have been criticised for their shortfalls introduction capacity for 155mm artillery shells and other ammunition types. They are failing to reach a target of supplying one million rounds to Ukraine by Spring 2024, with a necessary ramp-up in supply not forthcoming. In November 2023, Estonia’s Minister of Defence slammed the EU for inaction over production rises for 155mm ammunition, as he announced that Estonia would commit 30% of its defence budget to ammunition procurement. 

The decision to expand the facility in Hungary predates the Russian invasion of Ukraine in February 2022. It was a response to the anticipated demand for ammunition in Europe and NATO, highlighting the need to reduce Europe’s reliance on overseas imports. The first phase of the plant, which began production in 2024, was dedicated to producing 30mm medium-caliber ammunition for Lynx infantry fighting vehicles.

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Construction of the expanded facility, referred to as “Várpalota 2.0,” began in January 2024. It involves enlarging the plant area by 20 hectares, bringing the total size to approximately 120 hectares. This expansion is expected to increase the workforce to about 200 employees.

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The new phase of ammunition production, scheduled to start in early 2026, will focus on 155mm artillery shells for the PzH 2000 self-propelled howitzer and 120mm ammunition for the Leopard 2 main battle tank, as well as its potential successor, the Panther KF51 EVO. The Várpalota site will also engage in development and acceptance testing for these new types of ammunition.

In addition to ammunition production, the site will host a new facility for manufacturing explosives (RDX), in a joint venture between Rheinmetall and the Hungarian holding company N7. This facility aims to secure a stable supply of essential raw materials for ammunition production within Europe.