Lithuania proposes special status for Ukrainian ammunition manufacturing project

Lithuania's Economy and Innovation Ministry has drafted a government resolution proposing special status for a manufacturing project by Baltic Metal Foundry, the Lithuanian subsidiary of Ukrainian defence company Dnipro Electromechanical Plant (DEMZ). The designation would recognize the project as meeting urgent state security and defence needs.

Such status would let the company benefit from investment and business conditions beyond those offered under Lithuania's standard Investment Law. The ministry said the move would help improve the business environment and attract further investment.

Scale of the project

Baltic Metal Foundry signed an investment agreement with the ministry in mid-August, under which it plans to manufacture ammunition and munitions components in Alytus and the Prienai district, creating up to 450 jobs. The investment figure was not disclosed at signing, though Alytus Mayor Nerijus Cesiulis said at the time the company planned to invest tens of millions of euros in the town. Lithuania's list of major investment projects later put the committed figure at at least 93.3 million euros.

An ammunition assembly plant is planned for the Prienai district, while existing infrastructure at the Alytus industrial park will be used for manufacturing metal munitions components. Construction near Balbieriškis was expected to start this autumn, with production slated to begin in late 2026 or autumn 2027. The site covers 30.6 hectares in the village of Ąžuolai.

The company says its output will meet NATO standards, with the Ukrainian armed forces as its primary customer and additional production serving allied countries' defence needs.

About DEMZ

DEMZ is a major supplier of defence products to Ukraine's military, having shifted from civilian to military production after Russia's full-scale invasion. It operates branches across Ukraine and employs about 4,000 people. Baltic Metal Foundry was registered in Vilnius just over a year ago and currently has a single employee. Its registered beneficiaries include two Polish citizens and one Ukrainian citizen.