Italian firearms manufacturer will produce the widely used 7.62 mm and 12.7 mm ammunition in Hungary.
A letter of intent for the production of ammunition in Hungary was signed by the Hungarian N7 Holding National Defence Industrial Innovation Ltd and the Italian Beretta Group on behalf of the owner Pietro Gussalli Beretta, countersigned by the Hungarian Defence Minister in Budapest.
At the event, Hungarian Minister of Defence Kristóf Szalay-Bobrovniczky said that as a result of the agreement two new types of ammunition, both crucial for the Hungarian Defence Forces, will be manufactured in Hungary.
According to the agreement, 7.62 millimetre and 12.7 millimetre ammunition will be made in Hungary (probably the NATO-standard 7.62×51 and 12.7×99 machine-gun ammunition), which will be used, among others, by the Lynx and Gidrán combat vehicles used by the Hungarian Defence Forces and soon to be produced in Hungary.
‘The production of both of our equipment is in Hungary, and soon the ammunition will be produced here as well,’ the Defence Minister said.
The minister stressed that in the current security situation, both types of ammunition are in high demand, but with domestic production Hungary can increase the security of supply. At the same time,
it can also set itself up for export production in the long term, thus boosting and strengthening the country’s economy.
At the end of July, the Swiss Ruag Group transferred all the shares in Ruag Ammotec to Beretta Holding, which from 1 August also became the owner of the ammunition factory in Sirok, Hungary, which has since been operating under the name MFS Defense. However, it is not clear whether production under the current agreement will take place here.
This was not the first agreement in recent years on the production of firearms and ammunition in Hungary. In the mid-2010s the Hungarian defence industry was declared a key national economic area with the goal of providing Hungarian-made state-art defence equipment for the renewed Hungarian armed forces and make Hungary and arms exporter.
Since then several major international companies have announced plans to bring their manufacturing and development capacity to the country.
In 2018, Czech arms manufacturer Ceská Zbrojovka Export (CZ) and the Hungarian state signed a technology transfer agreement under which Hungary acquired the licence for certain Colt products (the Czech company fully bought the US Colt brand in 2021). Under the licence, CZ P-07 and CZ P-09 pistols, Scorpion Evo3 A1 submachine guns, and Bren2 machine rifles started to be produced in the town of Kiskunfélegyháza.
In December 2022, the German-Israeli-owned Dynamit Nobel Defense (DND) signed a joint venture agreement (JV) with the Hungarian state-owned company N7 Holding National Defence Innovation Ltd. Under the agreement, the production of shoulder-fired rocket launchers and reactive armour (ERA) elements will take place in Kiskunfélegyháza.
Also, last December, the Colt CZ Group SE signed another joint venture agreement with the state-owned N7 company, to set up a small arms manufacturing facility in Hungary.
On 15 December 2022, the foundation stone of the joint ammunition factory of the German defence company Rheinmetall Waffe Munition GmbH and the Hungarian state was laid in Várpalota. Back in March 2022, the Hungarian government signed an ammunition supply contract worth hundreds of millions of euros with Rheinmetall until 2031, in which the company committed to meet a significant part of its international orders from the output by its Hungarian plant. The Várpalota facility will initially produce ammunition for the Lynx infantry fighting vehicle, then the Leopard 2A7HU, and finally the PzH 2000HU self-propelled gun.
Hungary is set to meet a growing market demand for its defence products as Russia’s invasion of Ukraine has caught the European defence industry unprepared.
Countries who send their weapons to Kyiv are struggling to replenish their depleting stocks and find it hard to continue to support the embattled Eastern European nation. Thus, with its defence industry build up, Hungary contributes to the development of European defence industrial capabilities and is enhancing the EU’s security.