Vairog EU, Latvia’s only manufacturer of military ammunition, recently changed its name to Ammunity. The company is creating a new story for itself to attract strategic investors and investment to grow and significantly increase ammunition production by three to four times. LSM.lv visited the company as part of its article series “Forge of Military Power”.
Beāte Krauze-Čebotare, the company’s CEO, said that the company started its activities more than ten years ago, building equipment for the production of ammunition. The company was founded by several individuals. The largest shareholder is Juris Viktors Ozols, a Latvian-Canadian.
The company was noticed by the Ministry of Defence (MoD) and during mutual negotiations, it was decided that Latvia should produce cartridges. The company agreed and a contract for the production of cartridges for the National Armed Forces (NBS) was signed in 2021.
Currently, Ammunity’s product range includes various types of small-calibre ammunition – combat and training cartridges.
According to Krauze-Čebotare, there are no companies similar to Ammunity in Latvia.
“We are actually the only one. The closest competitor is in Lithuania, a Lithuanian state-owned factory. There they produce two calibres, we produce more, we have a wider range of products, but they produce in larger volumes. And here is the important nuance, that this business requires a very high capital investment. So it is not sustainable for this business to be privately owned, because then there has to be a very strong capacity to invest.”
So far, around €15 million has been invested in the development of the company. Last year, the company made a profit of €1.4 million, compared to a loss the year before, and Ammunity’s turnover in 2024 reached €9.3 million. This compares with a turnover of EUR 5.1 million a year earlier.
The head of Ammunity pointed out that ammunition production is an extremely capital-intensive business.
“And that is why we are currently looking for a strategic investor. We have realised that without the further involvement of a strategic investor, our development as a company is severely hampered.
“We are also having difficulties meeting the volumes required by the Ministry of Defence. That is why we are currently in the process of attracting an investor,” said Krauze-Čebotare, noting that there are several interested parties, including from Latvia.
She noted that a strategic investor is being offered 100% of the shares in Ammunity. The strategic investor is expected to attract EUR 25 million in capital investment, which will be invested, among other things, in new equipment to be able to produce ammunition in large volumes. “This is a completely different level of equipment from what we are building,” added the CEO.
Krauze-Čebotare said that after the acquisition of new equipment, the production of military ammunition is expected to at least triple or even quadruple.
How quickly production can be developed will depend on how long it takes to attract a strategic investor. In addition, the Cabinet of Ministers will still need to approve the change of ownership. It will also take about a year, year and a half to acquire the equipment, the company manager added.
It is planned to sell larger volumes of products both at home and on export markets. In addition, the company plans not only to expand production of existing products, but also to develop new products.
The company currently exports its products to several countries – EU countries, which Krauze-Čebotare refrained from disclosing, as well as the USA.
Asked how many new employees are planned to be brought in with the expansion, Krauze-Cebotare said, “This will have to be seen in the context of the [new] facilities. If you buy more automated equipment, then the number of employees cannot grow that much. But the number of employees could increase by 10-15 every year.”
The company currently employs 32 people. Most of the employees work at the production site in Bauska municipality, while a small number work in the office in Mārupe municipality.
Ammunity has so far secured a grant from the MoD for its development and plans are also underway to attract funding from the EU Defence Fund.
Krauze-Čebotare pointed out that the Ministry’s grant partly covered the establishment of the testing laboratory.
“Every batch or lot that we launch, we also test,” Krauze-Čebotare said, noting that the company currently has two shooting ranges.
The company is seeking co-financing from the EU Defence Fund to renovate the premises as well as the infrastructure at its production site in the Bauska region. It also plans to use EU funding to develop new products. The company also wants to renovate 15 bunkers it owns on a former missile base. It is possible that part of the production could be located there after the expansion, Krauze-Čebotare said.
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