The Ukrainian defence company DEMZ is going to build an ammunition factory in Lithuania: up to 450 jobs are expected to be created
Today, at the Government’s Office Minister of Economy and Innovation Edvinas Grikšas and a representative of the Ukrainian defence sector company DEMZ signed a large investment treaty for a new ammunition factory in Lithuania. This investment will create up to 450 jobs in Alytus and Prienai region.
“The partnership between Lithuania and Ukraine not only strengthens the security of our countries but also creates long-term economic value. Ukraine's decision to build a factory in Lithuania demonstrates trust in our country and the potential of our defence industry. This investment will create hundreds of jobs, open up new opportunities for Lithuanian business and strengthen the competitiveness of our defence industry. It's an investment in our security and our common victory”, Prime Minister Mindaugas Sinkevičius said.
“This is a really happy day, as we are one of the most supportive countries of Ukraine. We allocate 0.25% of our GDP to Ukraine, we are among the largest contributors to our defence industry. This is the best example of this synergy today, where our good intentions, our willingness to invest in this area and, in particular, Ukrainian-tested competitive technologies are gaining synergy”, Minister of Finance Taurimas Valys said.
In Lithuania, DEMZ will produce defensive ammunition and its components at one of the most modern ammunition workshops in Europe. The Lithuanian unit will become the regional production and innovation centre of the company, where new products will be developed and tested. The production will meet NATO standards – its primary market will be the Ukrainian Armed Forces, secondary - allied defence needs.
Moreover, the Ministry of National Defence and DEMZ signed a Memorandum under which they undertook to explore the possibilities of using the company's production capacities developed in Lithuania for further support to Ukraine. Lithuania's defence production is expected to contribute to Ukraine's supply and help strengthen resilient defence supply chains in Europe.
The range of DEMZ production produced in Lithuania will be expanded taking into account the needs of Ukraine and its allies as well as technological development. The project also provides for R&D line, which includes the pooling of technological competences and experience of Lithuania and Ukraine.
DEMZ is one of the strategically important suppliers of the Ukrainian defence industry, which has reoriented factories from civilian to defence production in the context of the war. Currently, the DEMZ group employs more than four thousand employees, and production units operate in several regions of Ukraine.
In addition to manufacturing capabilities, DEMZ has developed strong engineering competencies through the rapid development, testing and continuous improvement of defence products based on feedback from the frontline in Ukraine. The short innovation cycle and know-how allow the company to adapt quickly to changing defence needs, while maintaining high production quality. Focused project development team in Lithuania will strengthen not only the country's production base, but also its long-term technological capabilities by applying the most modern European technologies.
When selecting the location for the new factory, DEMZ was guided by the criteria of security and geographical location, maturity of infrastructure, availability of workforce, regulatory environment and state support for the defence industry. Other Baltic countries, Poland, Bulgaria, the Czech Republic and Romania were among the areas considered, but Lithuania was distinguished by a favourable institutional environment for defence industry and a strategic position in NATO's eastern flank.
DEMZ plans to use the already existing industrial infrastructure in Alytus industrial park, and a new generation defence industrial facility will emerge in Prienai region. Together, the two locations will allow for an optimal allocation of production functions. Construction works in Lithuania are expected to start in autumn 2026, while the production is expected to start at the end of 2027. The project is being developed in cooperation with Lithuania and after signing an investment treaty with the Ministry of Economy and Innovation.
DEMZ will look for employees for various positions - the experience with metalworking machines, quality control and production processes are especially valuable for the company. The company plans to organize training programmes together with local vocational education schools, to offer apprenticeship and upgrading programmes. The employees will also be able to be active in innovation processes – to develop, test and certify new defence products.
The DEMZ project in Lithuania will allow not only to meet Ukraine's existing needs, but also to develop regional defence capabilities. The long-term vision of the company is to create an innovation ecosystem where Lithuanian companies and scientific institutions, together with DEMZ, would develop new defence products and production innovations based on frontline experience.
“The arrival of the Ukrainian defence industry companies in Lithuania means not only investments, but also real new defence capabilities, from traditional ammunition to modern technological solutions. This strengthens Ukraine's ability to defend itself today and gives Lithuania the opportunity to grow its own defence industry, to develop new competencies and to integrate even more closely into NATO's defence supply chains. This is an investment not only in Ukraine's victory, but in our collective security”, Minister of National Defence Robertas Kaunas said.
Last updated: 14-08-2026
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