Lithuania and Ukrainian defence company DEMZ have signed an investment agreement to build a new ammunition factory in Lithuania.

Axar.az reports, citing Delfi, that the agreement was signed in Vilnius on Friday by Lithuanian Economy and Innovation Minister Edvinas Grikaas and DEMZ director Yevhen Muzykin.

The project is expected to create 450 jobs in Alytus and Prienai District. Construction is due to begin in autumn 2026, with production scheduled to start by the end of 2027.

“We all understand that the defence industry is the main pillar that strengthens our ability to protect our country,” Lithuanian Prime Minister Mindaugas Sinkevicius said. “If we want to be safe, today we must invest in the defence industry.”

The factory will produce defensive ammunition and components meeting NATO standards, primarily for Ukraine’s Armed Forces and, secondarily, for allied defence needs.