Latvia lands $233 million explosives plant near Russia’s border

A European company plans to build a $233 million explosives and warhead factory in Latvia, a NATO ally that sits just 175 miles (280 km) from Russia’s border, in a project aimed at closing a supply gap that has left Europe dependent on outside sources for the raw materials behind its weapons.

Wolfram Europa announced the €200 million ($233 million) project Wednesday at an event in Jēkabpils, a city in eastern Latvia. The company plans a 40-hectare (99-acre) site, secured under a long-term land agreement with Latvijas Valsts Meži, the Latvian state forestry company, with construction happening in three phases starting in 2027.

For American readers, the scale is easier to picture in terms of output. At full capacity, the plant is designed to make enough explosive material to fill 200,000 warheads and 100,000 anti-tank mines every year. It will also produce RDX and HMX, two explosive compounds used across NATO munitions, including artillery shells and missile warheads.

Wolfram Europa was registered in Latvia’s commercial register in January 2026 with initial capital of just $3,260, according to Latvian outlet Dzentlmenis.lv. The jump from a startup-sized registration to a $233 million industrial project happened in a matter of months.

The company describes itself as a European defense manufacturer building explosives, warheads and counter-mobility products, meaning items like anti-tank mines, without relying on long international supply chains. Once fully operational, the project is expected to create 200 jobs in the region.

Company officials say the plant is designed to meet NATO explosive safety standards and will be licensed under Latvian regulation. They describe it as a low-footprint, relocatable design meant to let production scale up or move if needed during a crisis.

The project has the backing of Latvia’s government. Latvian Minister of Economics Viktors Valainis, Minister of Smart Administration and Regional Development Edgars Tavars, Ministry of Defence State Secretary Airis Rikveilis, and Jēkabpils County Municipality Chairman Raivis Ragainis all attended the announcement alongside Wolfram Europa CEO Magnus-Valdemar Saar.

“Investments of this scale represent a significant step forward in the development of Latvia’s defence industry and, at the same time, demonstrate Latvia’s ability to attract strategically important industrial projects to its regions,” said Viktors Valainis, Minister of Economics.

For American readers less familiar with the issue, Europe’s explosives shortage has become a significant concern within NATO. Company officials point to a widening gap between Russia’s explosives output and Europe’s, arguing that European countries have spent billions on missiles, artillery shells and drones in recent years but have not scaled up the raw explosive material those weapons ultimately require.

“For the last 35 years, Europe has been scaling down its explosives and munitions industry, and technological development has stalled with it,” said Magnus-Valdemar Saar, CEO of Wolfram Europa. “Now Europe is rearming, but investment is still focused mainly on platforms and final assembly. That is the explosives gap: Europe is scaling its weapons faster than the explosives and warheads that make them effective.”

Saar said Latvia is meant to be the first of several sites Wolfram Europa builds across the continent.

“Jēkabpils will not serve Latvia alone. Latvia will host strategic production capacity for Europe. It will be our first major site, but not our last,” Saar said.

“The establishment of such a company strengthens the involvement of Latvia’s defence industry, promotes the development of technologies and expertise, and demonstrates Latvia’s ambition to become a significant regional hub for defence industry and technology development,” said Airis Rikveilis, State Secretary of the Ministry of Defence.

The Wolfram Europa project is one of several recent defense manufacturing investments in the Baltic region, an area U.S. policymakers watch closely given its proximity to Russia. Rheinmetall, the German defense contractor, signed a separate memorandum of understanding with Latvia’s government in March 2026 for an artillery shell factory, structured as a joint venture with Rheinmetall holding 51 percent and the Latvian State Defence Corporation holding 49 percent. That plant is expected to produce between 60,000 and 80,000 shells (155mm, or 6.1 inches, in caliber) a year once construction begins in spring 2027.

Rheinmetall has also signed a $350 million deal for a similar shell plant in neighboring Lithuania, which broke ground in November 2025 with a target of 100,000 shells a year by 2027.

“My task is to ensure that unnecessary bureaucracy does not stand in the way of this project and that the investment can flow into Jēkabpils,” said Edgars Tavars, Minister for Smart Administration and Regional Development.