On November 3, 2025, Romania took a significant leap onto the European defense stage, signing a landmark agreement with Germany’s Rheinmetall—the continent’s largest arms producer—to construct a cutting-edge gunpowder factory in Victoria, a town nestled in Brasov County, central Romania. The joint venture, valued at approximately 535 million euros (about $616 million), is being hailed as a pivotal move as Europe races to rearm in the face of growing security concerns amid an increasingly provocative Russia.
Prime Minister Ilie Bolojan, standing alongside Rheinmetall CEO Armin Papperger at the signing ceremony, described the deal as a turning point for Romania’s defense industry. "After many years in which our defense industry was in little demand, Romania is entering a new stage because of the security situation in Eastern Europe," Bolojan stated, according to the Associated Press. He added, "I’m glad Rheinmetall sees us as an important and serious partner and is strengthening its presence in Romania." The prime minister emphasized that the partnership signals Romania’s emergence as a player with real potential in the defense industry of Southeast Europe—a sentiment echoed throughout the day’s proceedings.
The planned factory is no modest undertaking. Construction is slated to begin in 2026 and is expected to take three years to complete, ultimately creating about 700 new jobs for the local community. As reported by Romania Insider, part of the production chain will be localized, integrating Romanian suppliers and businesses directly into the factory’s operations. Bolojan welcomed Rheinmetall’s openness to renegotiating the partnership contract to ensure a portion of the supply chain would be local, saying, "In this way, the production unit will be better integrated into the Romanian economy." This approach not only bolsters local industry but also weaves the new facility into the national economic fabric.
Romania’s investment in the project is substantial. Of the total 535 million euros, Rheinmetall and its subsidiaries will contribute over 400 million euros, while Romania will invest 120 million euros. Additional funding includes 47 million euros from a Brussels-approved program, and the Romanian government is seeking further support through the European Union’s Security Action for Europe (SAFE) program. The SAFE mechanism is designed to encourage defense readiness across the continent, offering soft loans to EU member countries for projects that strengthen collective security. According to Romania Insider, the government is close to finalizing which projects will be developed and financed through this program, with equipment plans set for approval by the Supreme Council of National Defense (CSAT) in the second half of November before being presented to the European Commission.
The factory itself is set to be a technological marvel. Rheinmetall CEO Armin Papperger described the facility as "the most modern company in the world, at this moment, for the production of double- and triple-base powders." These advanced powders are vital components for modern artillery and ammunition, and the Victoria plant’s planned output is formidable: capacities of about 60,000 charges, or 300,000 modular charges—one of the largest such capacities globally for artillery systems. Papperger further noted, "These powders are needed all over the world, and especially in Europe, to provide support for defense forces. They are also needed in Romania." Of this output, 200 tons of powder will be earmarked for local needs, ensuring Romania’s own defense requirements are addressed alongside broader European demands.
The strategic importance of the factory extends beyond national borders. As Papperger explained, "The strategy is to make Romania an integral part of the European ecosystem. Romania will also be an integral part of the NATO ecosystem." The plant’s integration into both European and NATO defense supply chains is seen as a crucial step in strengthening collective security, particularly as Europe grapples with the implications of Russia’s ongoing war in Ukraine. Since Russia’s full-scale invasion of Ukraine in 2022, Romania has steadily assumed a more prominent role within NATO. The country has donated a Patriot missile system to Ukraine and established an international training hub for F-16 jet pilots from allied nations, including Ukraine, according to AP and Ukrinform.
For many in the region, the new factory represents more than just a boost to local employment or industrial output—it’s a testament to Romania’s shifting geopolitical significance. As Prime Minister Bolojan put it, "With this partnership, Romania is beginning to emerge as a player with potential in the defense industry in southeastern Europe." The deal also marks the end of one phase of negotiations and the start of another, as the government and its partners work to secure additional projects and funding streams to further enhance Romania’s defense capabilities.
The timing of the agreement is no coincidence. The security situation in Eastern Europe has changed dramatically since 2022, with NATO members scrambling to shore up their defenses and ensure a steady supply of critical military materials. As reported by Ukrinform, Romania’s agreement with Rheinmetall comes just as Bulgaria signed a separate deal with the German defense giant to build a gunpowder and 155mm artillery shell plant worth over 1 billion euros. The broader push to rearm and modernize Europe’s defense infrastructure is unmistakable, and Romania’s role is growing more central by the day.
Looking forward, the Victoria factory is expected to serve as a linchpin for both national and continental defense strategies. The government’s focus on integrating local suppliers, leveraging EU funding, and aligning with NATO priorities demonstrates a multi-pronged approach to security—one that balances immediate needs with long-term resilience. The plant’s advanced technology and massive production capacity could also position Romania as a crucial supplier for allied nations facing similar security challenges.
Of course, the project is not without its challenges. Coordinating funding from multiple sources, integrating complex supply chains, and meeting the stringent standards of both European and NATO defense ecosystems will require careful planning and execution. Yet, as both Bolojan and Papperger made clear, the stakes are too high—and the opportunities too great—to turn back now.
As construction gears up in 2026, all eyes will be on Victoria, Brasov County, where a once quiet town is set to become the beating heart of Romania’s defense ambitions. The story of this new gunpowder factory is, in many ways, the story of a nation—and a continent—responding to a changed world, determined to shape its own future in the face of uncertainty.
