Rheinmetall, the Duesseldorf-based defence and technology conglomerate, officially took over its newly constructed ammunition factory in Várpalota, Hungary, on July 29, 2024. The event is a milestone in the company's expansion.
The factory is designed to produce 30mm ammunition for the KF41 Lynx infantry fighting vehicle (IFV).
Rheinmetall delivers first Hungarian-made Lynx IFV
On July 24, 2024, Rheinmetall delivered its first Hungarian-made KF41 Lynx IFV to Hungary, marking a milestone for the Zalaegerszeg production facility that opened in August 2023. This delivery, part of Hungary’s 217-vehicle order, emphasises Rheinmetall’s commitment to local production, with 172 units manufactured in Hungary.
According to GlobalData’s “Hungary Defense Market 2024-2029” report, Hungary's infantry fighting vehicles sector is valued at $313.9m, largely due to Hungary’s acquisition of Rheinmetall’s Lynx platform.
Beyond the technical details of production, which is slated to commence in October 2024, establishing this facility embeds Rheinmetall within Central Europe's defence infrastructure. The new factory is set to create over 200 jobs.
Armin Papperger, CEO of Rheinmetall, highlighted the factory’s role in meeting the needs of Hungary’s armed forces. "The opening of this state-of-the-art ammunition factory in Várpalota is a clear signal of our commitment to innovation and quality," Papperger stated. "This facility will not only strengthen the defence capabilities of our global partners and Hungary but will also contribute to the economic development of the region."
Hungarian Defence Minister Kristóf Szalay-Bobrovniczky echoed this sentiment, pointing to the importance of this cooperation in enhancing Hungary’s national security and the development of its defence industry. He suggested that collaboration with Rheinmetall is a component of Hungary's strategy to build a robust, self-sufficient defence sector capable of meeting national and allied needs.
Expanding ammunition production
The new factory’s technological capabilities extend beyond producing ammunition for the Lynx IFV. Future phases of development will see the production of ammunition for battle tanks, artillery, and other defence components.
On January 30, 2024, Rheinmetall announced an expansion of its Várpalota ammunition plant in Hungary. In addition to its initial 30 mm ammunition operations, the plant will produce production lines for 155mm artillery shells and 120mm ammunition. At its final expansion stage, the site will span 150 hectares.
As tensions and defence requirements evolve on the continent, the role of such manufacturing hubs becomes increasingly critical—not only in ensuring the supply of necessary defence materials but also in forging the political and economic ties that underpin Europe’s security architecture.
On July 8, 2024, Chinese President Xi Jinping hosted Hungarian Prime Minister Viktor Orban in Beijing. They discussed a political settlement for Ukraine, emphasising a halt to escalation and outside provocation. The meeting followed China's announcement of joint military exercises with Belarus, an ally of Russia, focused on counter-terrorism.
In essence, Rheinmetall’s new ammunition factory in Várpalota is not just about producing military technology; it represents a calculated investment in the future of European defence.
Additional reporting by Andrew Salerno-Garthwaite and John Hill.
