Estonia seeks companies for Defence Industrial Park

Estonia is building a new Defence Industrial Park and the Estonian Centre for Defence Investments (ECDI), part of the country’s MoD, has issued a call for companies to establish facilities there, according to a 9th April announcement on ECDI’s website. 

The call for proposals is specifically focused on ammunition, which is seen as a strategic priority by the Baltic state. ECDI is looking for “companies interested in manufacturing ammunition, munitions not containing an explosive substance, munitions containing an explosive substance, military explosives, military explosive substances, or their components,” according to the announcement. 

The final deadline for proposals is the 15th June 2025, with initial proposals required by the 15th May, and production is expected to begin no later than early 2027. The park is to be located in the Ermistu area of Pärnu County and the Estonian state has promised to build the base infrastructure. “Interest has come from both emerging domestic companies and international manufacturers,” Tambet Tõnisson, Head of State Assets Division at ECDI said.

“Our goal is to select the companies that will start operating in the defence industry park by the end of this summer, so that we can then proceed to sign the necessary contracts. After that, the companies can begin designing and constructing their production facilities,” Tõnisson added.

Estonia’s MoD plans to spend some €1.7 billion (£1.45 bln/$1.93 bln) on procuring ammunition and building infrastructure to house it between 2024 and 2027. This covers short-range air defence and anti-tank missiles, artillery ammunition, and small arms ammunition of various calibres. The country is also procuring anti-ship missiles – the Blue Spear from IAI and ST Engineering – and loitering munitions. The challenges faced by Ukraine have clearly been observed and digested; at many points, Ukraine could have successfully prevented Russian advances or conducted its own if it had more ammunition available. 

Estonia is not alone in trying to establish a domestic ammunition industry. Denmark recently awarded Nammo a contract to re-establish ammunition production at its Elling Plant. Lithuania signed an agreement with Rheinmetall in late 2024 under which the company will build a large plant to produce tens of thousands of 155 mm rounds per year in Baisogala. Latvia has established the State Defense Corporation Ltd, a state-owned enterprise to produce 155 mm rounds and charges in the country with €41 million (£35.2 mln/$46.6 mln) in assistance from the European Commission’s Munitions Support Fund. 

Calibre comment 

Establishing and increasing ammunition production throughout Europe is a clear and valid priority for many states. However, the goal is generally fraught with risk. These ventures are expensive – the Rheinmetall facility in Lithuania is projected to involve €180 million in investment – and require ongoing, regular government contracts to become economically viable in the long-term. This means procuring and using much more ammunition per year than most European armed forces have for the past two decades. If the plants can be made economically viable, they face other external risks. Russia has conducted and attempted to conduct long-term sabotage campaigns against Europe’s defence industry. In some cases, successfully destroying warehouses and factories. And, in the event of a war with Russia, these factories would likely be high priority targets during a strategic operation to destroy critical infrastructure, as Ukraine has been subject to since February 2022. 

Broadly speaking, the investments themselves represent a commitment to the future and the resolve to defend Europe’s eastern flank and prepare for whatever might come, which is a good thing. But those commitments require further expense and funding to fully deliver their promise. This is happening to some extent, with the Baltic states procuring air defence systems to help protect their infrastructure from Russian attacks and taking more strident steps to degrade Russia’s active measures. But it will likely be necessary to sustain all of these efforts for decades to come. 

By Sam Cranny-Evans, published on 17th April, 2025.