The partnership, formalised by the establishment of Rheinmetall Victoria, will see the German arms manufacturer invest in the Victoria powder factory.
The new joint venture is a partnership between Pirochim Victoria, a subsidiary of Romarm, and Rheinmetall. Pirochim Victoria will hold a 49% stake, while Rheinmetall will hold 51%.
The facility will produce propellant powders and modular propellants, including double and triple base powders. The investment is projected to create approximately 700 new jobs.
Romanian PM Ilie Bolojan said: "Through this partnership, Romania starts to emerge as a potential player in the defence industry of Southeast Europe. The future Victoria powder plant means an investment of half a billion euros, approximately 700 new jobs, and especially the advantage to produce powder in Romania."
Armin Papperger, CEO of Rheinmetall, said: "Rheinmetall Victoria will be the most modern company at the moment in the world to produce double and triple base powder. We need that powder at the moment around the world but especially in Europe, to create really defensive forces and also here in Romania."
The total investment from Rheinmetall and the joint venture is around €400 million, with the Romanian side investing €120 million on the civil side.
The project will benefit from European funding, including €47 million from the ASAP programmes and money from the SAFE programme.
The plant's capacity is projected to be around 300,000 modular propellant charges for artillery systems, a critical supply for national and regional defence.
