Lithuania Gives Ukrainian-Owned Baltic Metal Foundry Special Status for an Ammunition Plant Near Balbieriškis
Vilnius, 5 October 2026
Key points
- Lithuania's Ministry of Economy and Innovation has drafted a government resolution designating the project of Baltic Metal Foundry, the Lithuanian subsidiary of Ukraine's Dnipro Electromechanical Plant (DEMZ), as meeting urgent state security and defence needs, which opens investment conditions beyond the ordinary law (BNS, 5 October)
- The company has committed at least EUR 93.3 million and up to 450 jobs: an ammunition assembly plant on a 30.6-hectare site at Ąžuolai near Balbieriškis in Prienai district, and metal components at the Alytus industrial park; production from late 2027, to NATO standards
- The Ukrainian armed forces are the primary customer, allied needs secondary
- The investment agreement was signed in Vilnius on 14 August by Edvinas Grikšas, the economy minister, and DEMZ's head, Jevhen Muzykin, with a defence-ministry memorandum alongside; no value was given then
A Ukrainian ammunition maker is building on Lithuanian soil for Ukraine's army, and Vilnius is preparing to treat the project as a matter of state security.
The designation turns the August agreement into a privileged project, and it brings the first figure: the EUR 93.3 million comes from the government's list of major investment projects, not from the August signing. In August the ministry described the site as a regional production and innovation centre for DEMZ, where new products to NATO standards would be developed and tested. DEMZ, with about 4,000 employees, moved from civilian to military production after Russia's full-scale invasion. Lithuania's other large shell project is Rheinmetall's 155 mm plant at Baisogala, built for allied stocks; this one is built for a belligerent's army first.
A plant whose output ships to Ukraine is the target class two allied services named this autumn, and the status Lithuania is preparing, as reported, concerns investment conditions, not protection. After attributing the August arson at Milrem Robotics to Russian services, Estonia's security service said defence firms supporting Ukraine face an elevated threat; on the day of the Lithuanian draft, Germany's foreign intelligence chief said Russia is trying to stop arms production for Ukraine "also kinetically". A shell line near Prienai sits squarely in that set. The resolution's adoption, and whether the government attaches security conditions to the site, is what to watch. Signal No. 160 carried the draft beside the BND hearing.
Related · Defence production on the Baltic flank
