Rheinmetall Expands Hungarian Plant to Produce Ammo for PzH2000 Howitzers, Leopard 2 Battle Tanks

Rheinmetall Hungary Munitions Zrt.'s Várpalota plant is set to undergo a significant expansion, as the second phase of construction kicked off in January 2024.

The project, named "Várpalota 2.0," aims to meet the increasing demand for ammunition in Europe and NATO, addressing concerns about ammunition shortages. The expansion plan was conceived before the Russian invasion of Ukraine in February 2022, emphasizing Hungary's strategic investment in collaboration with Rheinmetall.

The initial phase of construction, initiated just a year ago, laid the foundation for the new Rheinmetall plant in Várpalota. The first phase focused on producing 30mm medium-calibre ammunition for the Lynx infantry fighting vehicles, part of Rheinmetall's new tank plant in Zalaegerszeg, Hungary. Production for these vehicles is scheduled to commence in 2024.

The "Várpalota 2.0" expansion is expected to increase the plant's size by 20 hectares, reaching approximately 120 hectares. With this expansion, the workforce is set to grow to a total of 200 employees.

The facility will extend its product range to include various types of ammunition, such as 155mm artillery shells for the PzH 2000 self-propelled howitzer and 120mm ammunition for the Leopard 2 main battle tank and the potential successor, the Panther KF51 EVO. Production for these expanded offerings is slated to commence in early 2026.

The development at Várpalota is not limited to ammunition production, as Rheinmetall plans to construct an additional plant for the production of explosives (RDX) on the same site. This parallel project, also a joint venture between Rheinmetall and Hungarian holding company N7, is crucial for ensuring the security of the supply chain for raw materials used in ammunition production in Europe.

Part of the output from Várpalota will be allocated to meet the requirements of the Hungarian armed forces, while the remaining production is intended for export.