Estonia has unveiled plans to build a state-owned explosives factory near the coastal town of Pärnu, in a move to bolster its defense capabilities and reduce dependence on foreign suppliers.

The facility will be built within Estonia’s new 100-hectare Defense Industrial Park, which will also house ammunition production sites. The project is estimated to cost between €120 million and €130 million ($131.07 million–$141.48 million) and is expected to create hundreds of jobs.

According to government sources, the Ministry of Finance has been authorized to establish a company to oversee the project. The newly formed entity, Hexest AS, will manage the factory, which is slated to begin producing 600 tons of RDX explosives annually starting in 2028.

RDX, a powerful and stable explosive, is commonly used in artillery shells, landmines, and missile warheads. According to reports, the factory’s planned output could supply the explosive material for up to 100,000 155mm artillery shells per year, significantly helping to meet Europe’s growing demand.

Defense Minister Hanno Pevkur said the facility would address Europe’s ongoing shortage of explosives and enhance the strategic value of Estonia’s defense park. “Building new capacity is essential to ensure security of supply for companies in Estonia and the wider region,” Pevkur stated.

Estonia’s move comes in response to a reduction in U.S. military aid to Europe and Ukraine under President Donald Trump, prompting European countries to increase defense self-sufficiency.