Ukrainian defence company DEMZ has signed an investment agreement to establish a new ammunition production facility in Lithuania, strengthening cooperation between the two countries and expanding European defence manufacturing capacity.
The agreement was signed on 14 August 2026 between DEMZ and Lithuania’s Minister of the Economy and Innovation, Edvinas Grikšas. The project is expected to create up to 450 jobs across Alytus and the Prienai district.
DEMZ plans to manufacture defence ammunition and components in Lithuania, with production designed to meet NATO standards. The Ukrainian Armed Forces are expected to be the facility’s primary market, while allied defence requirements will provide a secondary market.
DEMZ Expands Ammunition Production in Lithuania
Existing industrial infrastructure at Alytus Industrial Park will be used as part of the project, while a new defence manufacturing facility will be developed in the Prienai district.
Construction is scheduled to begin in autumn 2026, with ammunition production expected to start towards the end of 2027. The two locations will enable DEMZ to divide manufacturing functions across separate facilities.
Lithuania was selected ahead of potential locations elsewhere in the Baltic region, Poland, Bulgaria, the Czech Republic and Romania.
Lithuania and Ukraine Strengthen Defence Supply Chains
Lithuania’s Ministry of National Defence has also signed a memorandum with DEMZ to examine how production capacity established in the country could support continued military assistance to Ukraine.
The facility is intended to contribute to more resilient European defence supply chains while increasing regional ammunition manufacturing capacity.
Lithuanian officials said the investment also supports the development of the country’s domestic defence industry and reinforces cooperation with Ukraine at a time of continued demand for increased European ammunition production.
Meta description: Ukrainian defence company DEMZ will build an ammunition factory in Lithuania, creating up to 450 jobs and expanding NATO-standard production.
