Estonian government authorized the Minister of Finance to establish a € 120 million company whose task will be to establish a military explosives factory in Estonia
According to the Minister of Defence, Hanno Pevkur, there is a significant deficit in explosives production capacity in Europe.
The government announced that a company called Hexest AS will be established in the coming weeks and transferred to the Ministry of Defence within up to six months.
Initially, the entire share package of the company belongs to the Estonian state, but in the future it is planned to involve a strategic investor. To begin with, the state will make a contribution of up to 7.2 million euros, which will cover the costs of the engineering project and preparatory activities. The preparation of the engineering project will take about a year, and a final investment decision will be made based on its results.
“I can’t comment on whether it makes business sense,” Bojenko added. Lauri Karp, the head of competitor Enefit Power, admitted in “Aktuaalnes kaamera” that if the plan doesn’t get stuck behind the plans, production could start in three and a half years at the earliest.
In January, Jens Haug, the head of the arms industry Estonian Arsenal, told Äripäev that the availability of explosives in Europe has largely ended, which is why he welcomes the country’s plan to start producing it itself. Haug himself is not inclined to invest in a company created by the state, but believes that with state support, the Estonian plan is a brilliant opportunity for European explosives manufacturers.
Andra Nõlvak, a spokesperson for the Ministry of Defence, said at the beginning of the year that, in order to analyze the profitability, there are plans to order an engineering and technical design solution for an explosives factory from an engineering firm with experience in the field, which will provide a thorough description of the technology, equipment, facilities, and production process and will allow for a high-precision assessment of the size of the investment.
While Minister of Economic Affairs and Industry Erkki Keldo said that the state would rather see an explosives or ammunition manufacturer as a private investor in the company being created, Nõlvak said that both manufacturers and financial investors are considered as potential co-investors.
The government announced that a company called Hexest AS will be established in the coming weeks and transferred to the Ministry of Defence within up to six months.
Initially, the entire share package of the company belongs to the Estonian state, but in the future it is planned to involve a strategic investor. To begin with, the state will make a contribution of up to 7.2 million euros, which will cover the costs of the engineering project and preparatory activities. The preparation of the engineering project will take about a year, and a final investment decision will be made based on its results.
The cost of the plant €120 million
The Ministry of Defence plans to build an explosives plant on the territory of a defence industrial park and production is expected to begin in 2028. The plant will produce RDX-type explosives, which are used, for example, in projectiles, mines and rocket heads. The main customers are seen as both Estonian and European ammunition manufacturers.Estonia's big explosives plan
Äripäev wrote in January that the government's blueprint envisages that the military explosive hexogen, or RDX, could be produced from a by-product of shale oil production, i.e. hexamine. Viru Keemia Grupp has not tested the production or dealt with hexamine, but broadly speaking, this means mixing formalin with ammonia, explained communications manager Irina Bojenko at the beginning of the year.“I can’t comment on whether it makes business sense,” Bojenko added. Lauri Karp, the head of competitor Enefit Power, admitted in “Aktuaalnes kaamera” that if the plan doesn’t get stuck behind the plans, production could start in three and a half years at the earliest.
In January, Jens Haug, the head of the arms industry Estonian Arsenal, told Äripäev that the availability of explosives in Europe has largely ended, which is why he welcomes the country’s plan to start producing it itself. Haug himself is not inclined to invest in a company created by the state, but believes that with state support, the Estonian plan is a brilliant opportunity for European explosives manufacturers.
Andra Nõlvak, a spokesperson for the Ministry of Defence, said at the beginning of the year that, in order to analyze the profitability, there are plans to order an engineering and technical design solution for an explosives factory from an engineering firm with experience in the field, which will provide a thorough description of the technology, equipment, facilities, and production process and will allow for a high-precision assessment of the size of the investment.
While Minister of Economic Affairs and Industry Erkki Keldo said that the state would rather see an explosives or ammunition manufacturer as a private investor in the company being created, Nõlvak said that both manufacturers and financial investors are considered as potential co-investors.
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