Europe builds for war as arms factories expand at triple speed

Europe’s weapons factories are expanding at three times the rate of peacetime, stretching over 7mn sq metres of new industrial development that represents rearmament on a historic scale.

Building activity at European arms sites has gone into overdrive since Russia’s full-scale invasion of Ukraine in 2022, according to a Financial Times analysis of radar satellite data covering 150 facilities across 37 companies.

The data shows that Europe’s long-promised defence revival, driven by an injection of public subsidies, is beginning to materialise not just in policy rhetoric or spending pledges but also in concrete and steel.

It comes as EU governments argue over how to sustain arms deliveries to Kyiv, as well as rebuilding their own stockpiles, in the face of a potentially wavering US commitment.

Using more than 1,000 radar satellite passes, the FT tracked changes at sites associated with ammunition and missile production, two bottlenecks in the west’s support for Ukraine.

The Sentinel-1 satellites, operated by the European Space Agency, fire radar pulses and record their echoes — known as “backscatter” — that can reveal surface alterations. The data suggests about a third of the sites reviewed showed signs of expansion or construction work.

The scale and spread of the detected work suggests a generational shift in rearmament, moving Europe from just-in-time peacetime production towards building an industrial base for a more sustained war footing.

William Alberque, a senior adjunct fellow at the Asia Pacific Forum and former director of Nato arms control, said: “These are deep and structural changes that will transform the defence industry in the medium to long term.

“Once you’re mass-producing shells, the metals and explosives start flowing, which drops the cost and complexity of missile production.”

Most defence groups declined to comment on the findings, citing security concerns.

Areas marked by changes jumped from 790,000 sq metres in 2020-21 to 2.8mn sq metres in 2024-25, the analysis showed. Photography of these sites confirmed the changes were driven by excavations ahead of works, new buildings, fresh roads being paved and construction.

Among the sites with the biggest expansion was a joint project between German defence giant Rheinmetall and Hungarian state defence company N7 Holding, which has built a vast production site for ammunition and explosives in Várpalota in southern Hungary.

The first factory at the site in Hungary was completed in July 2024, according to a press release, producing 30mm ammunition for Rheinmetall’s KF41 Lynx infantry fighting vehicle.

“We cannot comment on the alleged outlines of our production facilities on satellite images for reasons of corporate security,” said Patrick Rohmann, a spokesperson for Rheinmetall.

Construction continues as the site will also produce other types of ammunition, including 155mm artillery shells and 120mm ammunition for the Leopard 2 tank and, potentially, the Panther, Rheinmetall said. The site will also house an explosives factory.

Radar can pick up subtle changes that may be hard to discern on conventional satellite images. The FT compared radar images from the same spring months — March to May — to minimise seasonal effects, such as trees losing their leaves, and checked the findings to avoid confusion with other activity.

Explosive facilities also often feature earthwork ridges as safety features, which can be hard to spot on optical images, or lots of small buildings.

The analysis examined 88 sites linked to an EU programme, Act in Support of Ammunition Production (ASAP), which has invested €500mn to tackle specific bottlenecks in the production of ammunition and missiles. Both the Rheinmetall and Roxel sites were supported by ASAP.

A clear physical expansion is visible at 20 sites with ASAP funding, including the construction of entirely new factories and roads. At 14 sites, small expansions are visible, such as new car parks being built. The remaining sites either did not expand or were office and research buildings.

To allow comparison, the FT also looked at companies that did not receive EU funding through ASAP. This includes 12 sites that were wait-listed for ASAP and 50 other sites in the EU and the UK linked to missile production. The analysis indicates that the companies receiving ASAP funds expanded more rapidly than the others.

In some cases, such as at a BAE Systems factory in the north of England, works were not detected because an existing factory building was reused.

Baiba Braže, the foreign minister of Latvia, told the FT the expansion was “a very positive and much needed development”. But Braže said it was “crucial” the defence industry was ready to deliver on Nato’s growing spending and use taxpayers’ money “effectively”.

The bulk of the physical change at ASAP sites was at those listed for shell production — reflecting both the priority given to ammunition and just how much space these factories need.

EU defence commissioner Andrius Kubilius told the FT that since Moscow’s invasion, Europe’s annual capacity to produce ammunition had increased from 300,000 to reach about 2mn by the end of this year

Rheinmetall’s expansion will account for a big part of this growth: the company said its annual production capacity for 155mm rounds was set to rise from 70,000 in 2022 to 1.1mn in 2027.

Officials and industry insiders say actual output in Europe is likely to be significantly below potential capacity. Assessing the precise impact of ASAP funding is also difficult, given many manufacturers already had growth plans when the funding programme was unveiled in 2023.

Other public spending has also played a significant role. At the German headquarters of missile-maker MBDA in Schrobenhausen, new roads and building works are clearly visible. The radar identified changes affecting 94,000 sq metres of its terrain since 2022.

This site benefited from €10mn through ASAP, together with two partner companies, to expand the production of the portable shoulder-launch Enforcer missile at the site.

But a rising flow of orders for other hardware has also contributed to the expansion. The same factory has also benefited from a $5.6bn Nato commission to produce up to 1,000 Patriot GEM-T surface-to-air missiles on European soil.

“The order volume will enable MBDA to set up a production facility for Patriot missiles in Germany, as well as major subcomponent production,” MBDA Germany director Thomas Gottschild said in a statement.

Norwegian manufacturer Kongsberg opened a missile factory in June 2024, backed with NKr640mn ($62mn) of funding to increase its missile production, including €10mn from ASAP. “The expansion led to an exponential increase in our total missile production capacity,” said company spokesperson Ivar Simensen.

The UK’s BAE Systems received support from Westminster, as well as increasing orders from the UK Ministry of Defence, and it has invested more than £150mn in its British munitions factories since 2022.

At its Glascoed site in south Wales, digging is clearly visible on satellite images. BAE says it will increase the production capacity of 155mm shells sixteen-fold when the new explosive filling facility there starts operating later this year.

The EU is negotiating a new €1.5bn defence programme that “replicates the logic of ASAP” through grants, and would also fund joint procurement, according to the European Commission.

Kubilius, defence commissioner, said the commission was looking at whether similar methods could be used “to incentivise industries to expand their production in other areas”. Priority areas include missiles and air defence, artillery and drones.

Manufacturers have praised the ASAP programme. Thorstein Korsvold, a spokesperson for Norwegian-Finnish manufacturer Nammo, said it had been “instrumental in helping Nammo make critically important investments in production”.

Nammo received about €55mn under ASAP to boost manufacturing of shells, propellant and powder, and was part of another €41.4mn project with other manufacturers.

Significant expansion is clearly visible at Nammo’s Finnish production site in Vihtavuori.

Similar programmes in other areas were needed, Korsvold said, pointing out that “air defence missiles as well as high explosives are currently produced only in very small quantities”.

Experts also believe that long-range strike capabilities remain a serious issue for Europe and Nato more broadly, as Russia is outpacing its adversaries.

Fabian Hoffmann, a researcher at the University of Oslo, said missiles were critical for a convincing deterrent against Russia’s superior 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,” said Hoffman.

“With Russia’s dramatic expansion the best we can do to establish a credible deterrence that if you shoot at us, we are going to shoot right back. But if we are ever going to get there, then we have to drastically expand our production.”

While the expansions are welcome, he said “miniature jet engine production for long-range missiles are a huge bottleneck” for European missile production. Along with explosive filler, he suggested that these could be the next target of future EU spending programmes.

Satellite maps by Aditi Bhandari and Justine Williams