Europe’s arms industry booms as war production triples: FT
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EU arms production surges as factories add millions of square meters, boosting shell and missile output to meet the demands of the war in Ukraine and NATO goals.
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A Leopard 2 tank is seen in action at the Bundeswehr tank battalion 203 at the Field Marshal Rommel Barracks in Augustdorf, Germany, Wednesday, Feb. 1, 2023. (AP)
A Financial Times analysis shows Europe’s weapons manufacturing facilities are expanding at three times their normal peacetime rate, adding over 7 million square meters of new industrial space in a historic rearmament drive.
Since the beginning of the war in Ukraine in 2022, construction at European defense sites has accelerated dramatically, according to a Financial Times analysis of radar satellite data from 150 facilities across 37 companies.
The data shows that Europe’s long-promised defense buildup, spurred by increased public subsidies, is moving from political commitments and budget allocations to large-scale construction involving concrete and steel.
This surge comes as EU governments debate how to sustain arms shipments to Kiev while replenishing their own depleted stockpiles, amid concerns over a potentially wavering US commitment.
One-third of monitored sites show expansion or new construction
Using over 1,000 radar satellite passes, the FT tracked sites linked to ammunition and missile manufacturing, two of the most critical bottlenecks in Western support for Ukraine.
Operated by the European Space Agency, Sentinel-1 satellites emit radar pulses and measure their echoes (“backscatter”) to detect surface changes. The analysis found that roughly one-third of monitored sites showed signs of expansion or new construction.
The breadth and speed of these changes indicate a generational shift in European rearmament, moving away from just-in-time peacetime production toward a robust industrial base designed for sustained conflict.
“These are deep and structural changes that will transform the defence industry in the medium to long term,” said William Alberque, senior adjunct fellow at the Asia Pacific Forum and former NATO arms control director. “Once you’re mass-producing shells, the metals and explosives start flowing, which drops the cost and complexity of missile production.”
Most defense companies declined to comment, citing security concerns.
The analysis found that areas marked by change increased from 790,000 square meters in 2020–21 to 2.8 million square meters in 2024–25. Satellite imagery confirmed these expansions included excavation, new buildings, paved roads, and other construction activity.
Among the largest projects is a joint venture between German defense giant Rheinmetall and Hungary’s state-owned N7 Holding, which has developed a vast ammunition and explosives site in Várpalota, western Hungary.
In 2022, the site was largely undeveloped farmland.
Radar data reveals subtle changes hidden from optical imagery
Radar imagery shows blue areas, indicating reduced radar backscatter from excavation, and orange areas, indicating increased backscatter consistent with new construction. The FT verified these changes with optical satellite images from 2025.
Rheinmetall completed the site’s first factory in July 2024, producing 30mm ammunition for its KF41 Lynx infantry fighting vehicle. “We cannot comment on the alleged outlines of our production facilities on satellite images for reasons of corporate security,” Rheinmetall spokesperson Patrick Rohmann said.
According to FT, construction is ongoing to add production lines for 155mm artillery shells, 120mm tank rounds for the Leopard 2 and potentially the Panther, as well as an explosives factory.
Radar data can reveal subtle changes not always visible in conventional optical imagery. To reduce seasonal effects such as foliage changes, FT compared radar images from the same months (March to May) over multiple years.
Explosives manufacturing sites often include earthen berms for safety and multiple small buildings, features sometimes difficult to spot on optical images.
For example, significant construction between 2022 and 2025 was detected at Roxel’s factory in Saint-Medard-en-Jalles, France, confirmed by radar but less obvious in optical imagery.
Major physical expansion in 20 sites
The analysis examined 88 sites linked to the EU’s Act in Support of Ammunition Production (ASAP) program, which has invested €500 million to tackle ammunition and missile production bottlenecks. Both Rheinmetall and Roxel have received ASAP funding.
Of these sites, 20 showed major physical expansion, including new factories and roads, while 14 had smaller additions such as parking lots. Others were primarily office or research facilities, or showed no expansion.
For comparison, the FT also studied 62 sites without ASAP funding, including 12 wait-listed for the program and 50 missile-related facilities in the EU and UK. Results indicate that ASAP-backed sites expanded faster.
Some sites, like a BAE Systems plant in northern England, showed no detected works because existing buildings were repurposed.
Latvian Foreign Minister Baiba Braze called the expansion “a very positive and much needed development,” stressing the importance of ensuring NATO’s rising defense budgets are used “effectively.”
Most physical growth at ASAP sites was dedicated to shell production, underlining ammunition’s priority and the large space such facilities require.
EU Defense Commissioner Andrius Kubilius told the FT that since 'Moscow’s invasion', Europe’s annual ammunition capacity has risen from 300,000 rounds to an estimated 2 million by the end of this year.
Rheinmetall’s expansion accounts for much of this increase: its 155mm shell output is expected to grow from 70,000 rounds in 2022 to 1.1 million by 2027.
However, officials caution that actual output likely remains below capacity, and measuring ASAP’s precise impact is difficult since some manufacturers had expansion plans before the program’s 2023 launch.
Officials warn output lags capacity; ASAP impact hard to measure
Other public funds have contributed as well. At missile maker MBDA’s headquarters in Schrobenhausen, Germany, radar imagery revealed changes over 94,000 square meters since 2022. The site received €10 million through ASAP to boost production of the Enforcer shoulder-launched missile.
Rising demand has also driven growth. MBDA won a $5.6 billion NATO contract to produce up to 1,000 Patriot GEM-T surface-to-air missiles in Europe. “The order volume will enable MBDA to set up a production facility for Patriot missiles in Germany, as well as major subcomponent production,” said MBDA Germany director Thomas Gottschild.
Norwegian firm Kongsberg opened a missile factory in June 2024, funded partly by NKr640 million ($62 million), including €10 million from ASAP. “The expansion led to an exponential increase in our total missile production capacity,” spokesperson Ivar Simensen said.
UK-based BAE Systems, backed by government funding and increased Ministry of Defence orders, has invested over £150 million in British munitions plants since 2022. At Glascoed in South Wales, satellite images show major excavation. BAE says its new explosive filling facility will boost 155mm shell production sixteenfold when it opens later this year.
'More programs needed'
The EU is now negotiating a new €1.5 billion defense program modeled on ASAP, which would fund joint procurement as well as grants, the European Commission said. Kubilius added that the Commission is also exploring similar incentives to expand production in other defense sectors, prioritizing missiles, air defense, artillery, and drones.
Manufacturers have praised ASAP’s role. Thorstein Korsvold, spokesperson for Norwegian-Finnish company Nammo, said the program was “instrumental in helping Nammo make critically important investments in production.”
Nammo received about €55 million through ASAP to boost shell, propellant, and powder output, and also participated in a €41.4 million joint project. Significant expansion is visible at Nammo’s Finnish facility in Vihtavuori.
Korsvold stressed that more programs are needed, noting that “air defense missiles as well as high explosives are currently produced only in very small quantities.”
Despite the progress, experts warn Europe and NATO still face a major shortfall in long-range strike capabilities, with Russia continuing to outproduce them.
Fabian Hoffmann, a University of Oslo researcher, highlighted missiles’ critical role in countering Russia’s larger ground forces: “Missiles are the precondition for NATO’s theory of victory. Because we are not going to keep up with Russia’s pace of mobilisation.”
