VMZ-Sopot and Rheinmetall sign contract on billion leva investment in new explosives plant in Bulgaria

Bulgarian arms plant VMZ-Sopot and Germany’s Rheinmetall, a leading international systems supplier in the defence industry, signed on October 28 a contract on an investment of close to a billion leva to build a gunpowder and ammunition plant in Bulgaria.

At a ceremony at the Cabinet building in Sofia, the contract was signed by Rheinmetall CEO Armin Paperger and the director of the company’s Weapons and Ammunition Department Roman Köhne and on the Bulgarian side, by VMZ-Sopot CEO Ivan Getsov.

Prime Minister Rossen Zhelyazkov, who presided over the ceremony, said: “The signings mark the end of a rather dynamic and very good working atmosphere-filled process of preparing the shareholders’ agreement and its annexes for the establishment of the joint venture between Rheinmetall and VMZ-Sopot.

“From now on, a lot of work lies ahead, which will lead to the creation of enormous potential in Bulgaria through a Bulgarian plant, which is a huge advance in Bulgarian industrial and defence capabilities,” Zhelyazkov said.

Paperger expressed his expectation that other European concerns would invest in the Bulgarian arms industry.

Paperger expressed satisfaction with the rapid progress and high level of cooperation with the Bulgarian side.

“Bulgaria’s speed is like never before. With our second meeting, we are creating one of the best factories in Europe,” Paperger said.

He said that Europe and Nato need 50 million ammunition, and Bulgaria will make its significant contribution.

“We are grateful for the trust. We are here not only as business partners, but also as friends,” he said, expressing confidence that other European companies will also invest in Bulgaria, because the country has well-educated people and a stable government.

Paperger said that the factory will be built within 14 months.

The production will include gunpowder, 155mm artillery shells and modular charging systems in line with the latest technological standards.

Also present at the ceremony were Deputy Prime Minister Tomislav Donchev, Economy and Industry Minister Petar Dilov, GERB-UDF leader Boiko Borissov and German ambassador Irene Plank.

A statement by the government information service said that the project is of strategic importance not only for Bulgaria, but also for the whole of Europe.

“The investment of nearly one billion leva is among the most significant in recent years and is a key step in the modernisation of the Bulgarian defence industry,” the statement said.

“It is also part of the efforts of the European Union and Nato to strengthen the defence capabilities and strategic autonomy of Europe in the context of the changed geopolitical environment.”

The statement said that economic growth, development of latest-generation production facilities and nearly 1000 new highly qualified jobs are just some of the benefits for Bulgaria from the implementation of the project.

“With the construction of the plant, our country will restore a key element of its defence capacity and strengthen its positions in the European defence industry.”

The investment has been the topic of a clash between Borissov and head of state President Roumen Radev about which of them should get the credit for the investment.

At the October 28 ceremony, Zhelyazkov and participants in the signing thanked Borissov.

(Photo: government.bg)