Swedish Defense Firm to Establish Artillery Shell Facility in Estonia
In a significant move for Estonia’s defense sector, a Swedish defense company has announced plans to construct a major factory for producing 155-millimeter artillery shells in the northeastern part of the country. This initiative marks a substantial foreign investment into Estonia’s emerging defense industrial base.
The Estonian Defense Minister, Hanno Pevkur, recently confirmed that an agreement was finalized last week with a yet-to-be-named company to build a large-caliber ammunition factory at the Põhja-Kiviõli defense industry park. The investment pledged by the manufacturer is at least €300 million (approximately $346 million). The facility is set to manufacture a range of munitions, spanning short, medium, and long distances.
Estonia’s national broadcaster, ERR, has reported that the investor is a Swedish entity. This detail considerably narrows down the possibilities, with BAE Systems’ subsidiary Bofors being the most likely candidate. Bofors, a renowned name in Swedish artillery and ammunition production, was divided in the early 2000s, with its artillery division being acquired by BAE Systems and its missile segment going to Saab.
Matthew Knowles, a spokesperson for BAE Systems, when approached by ERR, neither confirmed nor denied the corporation’s involvement. He emphasized Estonia’s significance as a strategic partner and redirected further inquiries to the Estonian government.
Minister Pevkur noted that the company has been assured confidentiality until the official signing of contracts, expected to occur by mid-April. He also clarified that the firms involved are not South Korea’s Hanwha Aerospace nor the American defense giant Lockheed Martin.
Estonia Expands Its Defense Industrial Network
The new factory in Põhja-Kiviõli is part of a broader initiative to enhance Estonia’s defense industry capabilities. Another major development is underway at the Ermistu defense industry park in Pärnumaa, which is expected to host four companies, including the U.K.-affiliated Odin Defence and the Estonian explosives manufacturer Nitrotol, with operations projected to start in 2027. Additionally, the Estonian capital of Tallinn is advancing its defense manufacturing capacity with the establishment of a state-owned enterprise, Hexest AS, which will produce RDX explosives critical for filling 155mm shells, aiming for operational status by 2028.
This expansion is largely driven by the ongoing conflict in Ukraine and the resultant widespread ammunition shortages, which have highlighted the dangers of relying heavily on a limited number of suppliers. Located on the border with Russia and maintaining one of the highest ratios of defense spending to GDP within NATO, Estonia is investing heavily in its ability to produce military supplies domestically, deeming the investment essential for its national security strategy.
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Jamal Peterson reports on defense, aerospace, and tech policy. With a military background and a strategic mind, he dissects complex subjects with clarity, offering readers sharp, reliable insights.
