Today at the Government, Minister of the Economy and Innovation Edvinas Grikšas and a DEMZ representative singed a large-scale investment contract on building a new ammunition factory in Lithuania. The investment will produce up to 450 new job availabilities in Alytus and Prienai district.
“The partnership between Lithuania and Ukraine not just strengthens the security of both countries but also creates long-term economic value. The decision of Ukraine to build the factory in Lithuania is a sign of trust in our country and the potential of our defence industry. This investment will create hundreds of jobs, open new opportunities for the Lithuanian business and strengthen the competitiveness of our defence industry. This is an investment in our security and mutual victory,” says Prime Minister Mindaugas Sinkevičius.
The DEMZ company will manufacture defensive ammunition and its components in one of the most cutting-edge production facility in Europe at the plant built in Lithuania. The Lithuanian branch will become a regional hub of production and innovation delivering and testing novel products. The NATO-standard production will be sent to the Armed Forces of Ukraine as the primary market and then, as a secondary market, to the Allies based on their defensive equipment requirements. The Ministry of National Defence and DEMZ have also assigned a memorandum committing to look into the options of utilising the defence production facility built in Lithuania for further support to Ukraine. The defence production manufactured in Lithuania is expected to contribute in supplying Ukraine and strengthening supply chain resilience in Europe.
“The arrival of Ukraine’s defence industry companies in Lithuania means not just investment but also actual new defence capabilities, from conventional munitions to modern technological solutions. It strengthens Ukraine’s defensive capacity it needs today, while Lithuania gets the opportunity of growing its defence industry, building new competences and an even closer integration with the NATO supply chains. This is not just an investment in Ukraine’s victory, it’s an investment in our common security,” says Minister of National Defence Robertas Kaunas.
The scope of the DEMZ production in Lithuania will be widened to reflect the needs of Ukraine and the Allies, as well as the technological advancement. The project also includes considerations for research and development (R&D) pooling Lithuanian and Ukraine technological competencies and experience.
“This projects reflects the direction of Lithuania’s economic development towards high added value, technologically complex and strategic branches of industry. The DEMZ investment is a testament to the security and capacity of Lithuania as a production venue, and moreover, as a country that actively shapes the future of defence industry in our region. We will continue the support to such projects across all phases of development,” says Minister of the Economy and Innovation Edvinas Grikšas.
DEMZ (Dnipro Energy and Mechanical Plant) is one of Ukraine’s strategic defence industry suppliers that pivoted their production profiles for defence purposes in the event of the war. DEMZ currently employs over 4000 people in its production divisions across several regions of Ukraine.
Beyond its manufacturing capabilities, DEMZ has built robust engineering expertise through the rapid design, testing, and continuous refinement of defence products, driven directly by frontline feedback from Ukraine. The short innovation integration cycle and hands-on manufacturing experience allow the company to adapt to changing defence needs quickly, while at the same time maintaining production quality. The project development team assembled in Lithuania will not only strengthen the country’s manufacturing base but also its long-term technological capabilities by implementing the most advanced European technologies.
When selecting the location for the new plant, DEMZ evaluated the criteria of security and geographical position, infrastructure maturity, workforce availability, the regulatory environment, and state support for the defence industry. Lithuania stood out among the other Baltic countries, Poland, Bulgaria, the Czech Republic and Romania because of our defence industry-friendly institutional environment and strategic positioning on the eastern flank of NATO.
DEMZ plans to utilize the existing industrial infrastructure at the Alytus Industrial Park, while a brand-new, next-generation defence industry facility will be built in the Prienai district. Combining the capacity of both locations will maximize our manufacturing efficiency. The constructions are set to kick off in the fall of 2026 and production is expected to begin in later 2027. It is a collaborative project with Lithuania built on an investment agreement signed with the Ministry of the Economy and Innovation.
DEMZ is looking for workforce to fill the various positions available. The company especially values experience in metalworking machinery, quality control, and manufacturing processes. The company plans to organize training courses in cooperation with local vocational schools, offering apprenticeships and upskilling programs. Workers will be free to actively contribute to innovation by designing, testing, and certifying new defence products.
The DEMZ project in Lithuania will not only contribute to meeting the current needs of Ukraine but will also build regional defence capabilities. The company’s long-term vision focuses on creating an innovation ecosystem where Lithuanian companies and scientific institutions can partner with DEMZ to design new defence products and manufacturing innovations driven by frontline experience.
“The expertise of Ukraine’s defence industry comes from the frontline, not from theory. The new DEMZ plant will allow Lithuania to integrate this experience directly into its own industrial base. This project is proof that Lithuania is becoming an increasingly important defence industry investment hub in Europe,” says Elijus Čivilis, CEO of Invest Lithuania.
