Rheinmetall and the Romanian company Pirochim Victoria, a subsidiary of Romarm, are establishing the joint venture Rheinmetall Victoria SA to produce propellant powder and modular propellants. The joint venture agreement was signed today in the Bucharest in the presence of Armin Papperger, CEO of Rheinmetall AG, and Ilie Bolojan, Prime Minister of Romania.

Armin Papperger, CEO of Rheinmetall AG, said: “Propellant powder remains a strategic bottleneck within the defence industry. The new production facility in Romania is another step towards our goal of achieving an annual production capacity of 20,000 tonnes of propellant powder by 2030.”

The total investment in the planned powder plant exceeds €500 million. Rheinmetall holds a 51% stake in the joint venture, with Pirochim Victoria holding the remaining 49%.

The production plant is to be built in Victoria, Brasov County. The joint venture is expected to create around 700 jobs. The expected annual production capacity is around 300,000 modular propellant charges, requiring approximately 750 tonnes of powder. Additionally, 200 tonnes of propellant powder will be produced to meet local demand.

Energy precursors such as nitrocellulose will also be produced locally. According to the current plans, the production of propellant powder and modular propellant charges is scheduled to begin in 2028.

Economy Minister Radu Miruță, together with his team, reviewed the previously agreed arrangement with Rheinmetall and renegotiated it to better serve the interests of the Romanian state.

Following the renegotiation, Romania obtained additional benefits valued at over €93 million:
• Half of the €47 million EU financing allocated to the two partners (the Romanian state and Rheinmetall) will now be recognized as belonging to Romania, whereas previously the entire amount was considered solely Rheinmetall’s contribution, leaving Romania with zero;
• Licensing fees were reduced from 8% to 6%;
• The lease payment Romania receives for the facility increased from €6 million to €9 million.

“Additionally — though harder to quantify financially — we introduced the requirement for a local supply chain involving Romanian companies. The Romanian defence industry must be revitalized through such projects, allowing our economy to grow via horizontal investments across the entire supply chain. And crucially — given that Romania holds 49% of this partnership — when it comes to major matters such as loans, sales, or transfer of shares, Romania has veto power,” stated Radu Miruță, Minister of Economy, Digitalization, Entrepreneurship and Tourism.

With this investment, Rheinmetall and Romania are establishing the strategically important production of propellant powder within the country. At the same time, the corporation will bolster its presence on NATO’s eastern flank. Romania, in turn, will be creating sustainable added value in the country.