Rocket factory promise raises questions as investor lacks experience

Latvia's Economics Minister Viktors Valainis and Native Trading executive director Natans Bošāns signed a memorandum of understanding on 23 July to build an artillery rocket factory in Latvia. The ministry announced the plan on 24 July, describing it as one of the country's most ambitious defence industry projects.

According to the memorandum, the plant would produce solid propellant — rocket fuel — fill warheads with explosives, assemble rockets and carry out qualification testing. The factory is expected to cost between €70 million and €90 million, and the project is to be implemented within 24 months. The Ministry of Economics, together with the Latvian Investment and Development Agency, describes the project as having a high level of readiness.

The promises are considerable: 150 new jobs, at least €600 million in exports over five years and €68 million in tax revenue. However, as the magazine Ir reports, the US investor Native Trading has no experience in artillery production. Latvia's armed forces also do not plan to acquire such capabilities.

It remains unclear why the ministry chose this company and on what basis such a large pre-election promise was prepared. So far, there has been no official explanation of what market opportunities and demand would justify the planned production volumes. Whether such a plant fits Latvia's defence plans at all also remains an open question.