On August 15, 2026, it was announced that agreements had been finalized between Lithuania and the Ukrainian defense company DEMZ (Defense Manufacturing Ukraine) to implement a large-scale investment project. The parties signed an agreement to create a new production cluster, which will become a key element in the logistics and supply system for the Armed Forces of Ukraine. The new enterprise will be deployed at sites in Alytus and the Prienai district, where the creation of up to 450 new jobs is planned.
Localization and Project Scale
The choice of Lithuanian regions is not accidental: Alytus and the Prienai district possess developed logistical infrastructure and proximity to the border with the Kaliningrad region, which is critically important for the rapid transport of products. According to the agreement, construction work at the new site in the Prienai district is expected to begin as early as autumn 2026. The launch of the full production cycle is scheduled for the end of 2027. DEMZ has committed not only to building workshops but also to developing its own training programs for personnel, who will be recruited with varying qualifications — from engineers to skilled workers.
Product Specifics and Scientific Potential
The products of the new enterprise will be intended primarily for the Armed Forces of Ukraine, however, supplying NATO allies also figures in the strategic plans. Production will strictly comply with the defense standards of the alliance. An important aspect of the project is not only assembly but also research and development activities. The enterprise will become a center for developing new solutions in the field of ammunition. In particular, the Ministry of Defense of Ukraine has already developed and successfully tested a new class of guided munitions called "Firefly." It is expected that this latest weaponry will move to the stage of serial production at the new facilities in Lithuania.
Geopolitical Context and US Pressure
The launch of production in Lithuania is taking place against the backdrop of intensifying discussions in the US Congress. In the US Senate, a proposal was made to accelerate the transfer of critically important ammunition to Ukraine, including 155mm artillery shells and charges for HIMARS and GMLRS systems. Creating a European production hub allows for the diversification of supply chains and reduces dependence on transit through US territory, ensuring a more operational response to front-line requests.
