According to the contract signed by Edvinas Grikšas and Yevhen Muzykin, a Ukrainian company will manufacture ammunition and ammunition parts in Lithuania. It is expected that this investment will create up to 450 new jobs in Alytus and the Prienai district.
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The amount of DEMZ investments in Lithuania has not been disclosed.
The mayor of Alytus, Nerijus Cesiulis, told journalists after signing the contract that DEMZ will invest tens of millions of euros in Alytus, but did not specify the exact amount. Earlier, he told BNS that the upcoming investment is the largest so far in the Alytus region.
The Ministry of National Defence and DEMZ also signed a memorandum committing to explore the possibilities of using the company’s production capacities in Lithuania for Ukraine’s needs, and this will also help strengthen resilient defense supply chains in Europe.
Prime Minister Mindaugas Sinkevičius said that this investment increases Lithuania’s security and creates economic value.
“The defense industry is the main pillar that strengthens the capabilities to defend our state and is a sector that creates significant economic value. To be safe today, we must invest in the defense industry, not burden its development with excessive bureaucratic regulation, and, no less importantly, create partnerships among like-minded countries,” the prime minister said at the contract signing event.
“The step of the Ukrainian defense industry company DEMZ into Lithuania is not only a foreign investment but also an important project for Lithuania’s national and regional security. Defense industry products meeting NATO standards and based on Ukrainian competencies accumulated and tested on the real battlefield will be produced in Lithuania,” added the head of government.
M. Sinkevičius said that the financing of the Ukrainian company’s investments has already been agreed upon, but did not disclose the specific financiers.
The Minister of Economy and Innovation said that this investment will also create higher-skilled jobs.
“These are hundreds of jobs, important for the entire Alytus region: the city of Alytus, the district, Prienai, and the Varėna district. These are both higher-skilled jobs and lower-skilled ones where people will definitely have to come to work. The defense industry can always boast higher salaries than the national average,” said E. Grikšas.
It was announced that DEMZ will build a modern ammunition assembly workshop in the Prienai district, near Balbieriškis, and will manufacture metal ammunition parts in the Alytus industrial park.
The mayor of Prienai, Alvydas Vaicekauskas, confirmed on Friday that the new factory will be built near Balbieriškis, as previously reported by BNS.
“A fairly safe place, no residents, suitable for such an object,” A. Vaicekauskas told journalists on Friday.
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Construction of the factory in the Prienai district is planned to start this fall, and production – by the end of next year.
As reported by BNS, the factory in the Prienai district will be built near Balbieriškis, on a 30.6-hectare plot in Ąžuolai village. This plot is the only one in the Prienai district listed in the National Land Service’s reserved investment state plots list.
Earlier, it was planned to establish a drone training base for the Šauliai Union in this area – in November 2024, the government decided to transfer this plot to the Šauliai Union to develop drone capabilities and set up a shooting range here, but according to the deputy head of the union, Laimonas Vaškys, the territory was never handed over to the Šauliai.
Construction of the factory is planned to start this fall, and production – by the end of next year, the ministry reports.
E. Grikšas told journalists that the construction of the factory in the Prienai district should be completed in the second half of 2027.
When choosing the location for the new factory, DEMZ considered criteria such as security and geographical location, infrastructure, workforce, regulatory environment, and state support for the defense industry. Other Baltic countries, Poland, Bulgaria, the Czech Republic, and Romania were among the considered locations, but Lithuania stood out with a favorable institutional environment and strategic position on NATO’s eastern flank.
The Ministry of Economy and Innovation calls the Ukrainian investment large and important, helping Lithuania become a regional DEMZ production and innovation center where new products will be developed and tested.
The range of DEMZ products will be expanded according to the needs of Ukraine and its allies. In addition, a research and experimental development (R&D) direction is planned, involving the pooling of technological competencies and experience from Lithuania and Ukraine, the statement says.
The Ukrainian company’s products will meet NATO standards, with the primary market being the Ukrainian armed forces and the secondary market being the defense needs of allies, the ministry said.
DEMZ is a major supplier of defense goods to the Ukrainian army. When the large-scale war in Ukraine began, the company shifted its activities from civilian to military production. The company has branches throughout Ukraine, employing about 4,000 people.
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