Swedish Defense Firm to Establish Major Ammunition Plant in Estonia
Estonia is set to see a significant boost in its defense industry with the construction of a new artillery shell manufacturing facility. A Swedish defense company, whose name remains undisclosed, has committed to investing at least €300 million ($346 million) in building this factory in northeastern Estonia.
Estonian Defense Minister Hanno Pevkur recently announced the agreement to develop the plant at the Põhja-Kiviõli defense industry park. The facility will specialize in producing a variety of munitions, ranging from short- to long-range artillery shells.
While the specific Swedish company involved has not been publicly named, Estonia’s public broadcaster ERR suggests that the likely candidate is Bofors, a subsidiary of BAE Systems. Known for its expertise in artillery and ammunition, Bofors is a prominent player in the Swedish defense sector. However, BAE Systems’ spokesperson Matthew Knowles remained tight-lipped, neither confirming nor denying the company’s involvement, but emphasized Estonia’s importance as a partner.
Pevkur assured that the identity of the company would remain confidential until formal contracts are signed, expected by mid-April. He also clarified that the firm is not linked to South Korea’s Hanwha Aerospace or the American defense giant Lockheed Martin.
This new initiative is part of Estonia’s broader strategy to enhance its defense manufacturing capabilities. The country is also developing the Ermistu defense industry park in Pärnumaa, which will host companies like Odin Defence and Nitrotol, with operations projected to start by 2027. Additionally, Estonia has established Hexest AS, a state-owned enterprise tasked with producing RDX explosives, integral to 155mm shell production, by 2028.
The urgency behind these developments is largely driven by regional security concerns, particularly due to the ongoing conflict in Ukraine and the global shortage of ammunition. Estonia, sharing a border with Russia and allocating a significant portion of its GDP to defense, aims to reduce dependency on external suppliers by bolstering its domestic production capabilities.
