In a strategic move to shore up NATO’s eastern flank, Estonia is partnering with Turkish defense firm Arca to establish a large-scale ammunition production hub. The agreement, signed between Estonian Defence Minister Hanno Pevkur and Ismail Terlemez of Arca Baltic Operations, marks a significant shift in Tallinn’s approach to national security, moving from reliance on foreign stockpiles to the creation of domestic industrial capacity.
The project involves a roughly €300 million (USD 353 million) investment to build a sophisticated factory within the North Kiviõli defence industry park. Spanning 141 hectares, the facility is designed to address one of the most pressing vulnerabilities currently facing Western militaries: the chronic shortage of large-caliber artillery shells, a crisis exacerbated by the sustained high-intensity conflict in neighboring Ukraine.
Having reported from dozens of conflict zones and diplomatic hubs across the Middle East and Europe, I have seen how the “ammunition gap” can paralyze strategic planning. For Estonia, this is not merely an economic investment but a survival mechanism. By integrating Turkish manufacturing expertise into the Baltic landscape, Estonia is positioning itself as a regional supplier of critical munitions for the European and U.S. Markets.
Strengthening the 155mm Supply Chain
The primary focus of the North Kiviõli plant will be the production of 155mm artillery ammunition, the gold standard for NATO forces. These rounds, particularly the extended-range variants, are essential for modern counter-battery fire and territorial defense. The factory is slated to produce M107 shells, which are widely utilized across the alliance’s artillery systems.
Beyond the heavy hitters, the facility will diversify its output to cover a spectrum of tactical needs. According to Arca Defense, the production lines will include:
- Mortar Shells: 60mm, 81mm, and 120mm variants for infantry support.
- Rocketry: 122mm rockets with a verified range of 20 kilometers.
- Specialized Rounds: Extended-range 155mm ammunition to increase the reach of Estonian and allied batteries.
The Estonian Centre for Defence Investments (ECDI) has emphasized that while Estonia will have the option to procure these munitions for its own reserves, the factory is designed primarily as an export hub. This allows Estonia to generate economic returns while contributing to the broader resilience of the transatlantic defense architecture.
Technical Production Overview
| Munition Type | Caliber/Specification | Primary Target Market |
|---|---|---|
| Artillery Shells | 155mm (including M107) | EU & United States |
| Mortar Rounds | 60mm, 81mm, 120mm | NATO Allies |
| Rockets | 122mm (20km range) | Export/Regional |
The Geopolitics of the Turkey-Estonia Axis
The choice of Arca, a rapidly expanding Turkish defense company, is telling. Turkey has spent the last decade aggressively expanding its domestic defense industry, reducing its own dependence on foreign imports and becoming a key exporter of drones and munitions. By bringing this expertise to Estonia, Tallinn is leveraging Turkey’s ability to scale production quickly—a capability that many legacy European firms have struggled to regain after decades of peace-time downsizing.
Minister Hanno Pevkur noted that the establishment of large-caliber production is a “critical step” in developing Estonia’s defense capabilities. This partnership reflects a broader trend of “friend-shoring,” where democratic nations relocate critical supply chains to trusted allies to avoid the risks associated with global instability or political blackmail.
However, the project faces the inherent challenges of defense industrialization. Building a factory of this scale from the ground up requires not only capital but a specialized workforce and a steady supply of raw materials—such as high-grade steel and explosives—which are currently in high demand globally.
Timeline and Constraints
While the agreement was formalized during the SAHA Expo in Istanbul, the road to full operational capacity is a multi-year journey. The ECDI has set a target for production to begin in 2028. This window allows for the construction of the 141-hectare site and the installation of precision machinery required for high-caliber munitions.
One detail that remains opaque is the exact monthly or annual production capacity. The ECDI has declined to provide specific figures, citing security concerns. This lack of transparency is common in munitions contracts, where production rates are often treated as classified information to prevent adversaries from calculating a nation’s total combat endurance.
Stakeholders in this project include not only the Estonian and Turkish governments but also the broader NATO logistics command, which is currently seeking to decentralize ammunition production to prevent a single point of failure in the supply chain.
As the project moves from the signing phase to the construction phase, the next confirmed checkpoint will be the ground-breaking ceremony and the first quarterly progress report from the Estonian Centre for Defence Investments regarding the site’s development in North Kiviõli.
We invite readers to share their perspectives on the expansion of defense manufacturing in the Baltics in the comments below.
