Europe’s accelerating rearmament has taken another step forward with a new industrial alliance that aims to address one of the most pressing bottlenecks in the continent’s defence supply chain: the production of artillery propellant.

The Prague-based defence conglomerate Czechoslovak Group (CSG) has agreed to form a joint venture with the French explosives manufacturer Eurenco to build a €300 million artillery propellant plant in Slovakia. The facility, to be developed through CSG’s Slovak subsidiary ZVS Holding, will manufacture modular propellant charges used in NATO-standard artillery ammunition — a component increasingly vital to Europe’s defence posture.

The decision comes as European governments scramble to replenish depleted stockpiles and expand manufacturing capacity following Russia’s full-scale invasion of Ukraine in 2022. In the years since, artillery has reasserted itself as the dominant weapon of modern land warfare, and the demand for shells and their propellant charges has surged to levels not seen since the Cold War.

A strategic gap in Europe’s arsenal

Although the production of artillery shells has expanded across Europe, the manufacture of modular artillery charge systems (MACS) — the propellant packs that drive shells out of the barrel — has lagged behind. Defence manufacturers have repeatedly warned that shortages of these charges are among the key constraints limiting overall ammunition output.

The planned Slovak facility is intended to close precisely that gap. Once operational, it will produce several hundred thousand propellant charge units annually, significantly boosting Europe’s capacity to sustain high-intensity artillery warfare.

For CSG, the project forms part of a broader strategy to expand its footprint in the rapidly growing defence sector. The company has emerged as one of Europe’s most dynamic arms manufacturers, with operations ranging from armoured vehicles and ammunition to aerospace components. Founded in Prague and now employing more than 14,000 people worldwide, the group exports military equipment to more than 70 countries.

The Slovak government retains a stake in ZVS Holding alongside CSG, reflecting the strategic significance Bratislava attaches to the country’s domestic defence industry. The new plant is expected to begin production around 2028, according to the companies involved.

Franco-Central European partnership

The involvement of Eurenco underscores a growing trend within the European defence sector: cross-border industrial partnerships designed to strengthen supply chains and reduce reliance on external suppliers.

Eurenco, which specialises in military explosives and propellant materials, has long been a cornerstone of Europe’s energetics industry. Its technology and experience in propellant chemistry will underpin the new facility’s manufacturing processes, while CSG’s Slovak industrial base provides the infrastructure and regional supply network.

Officials familiar with the project say the partnership reflects a broader shift in European defence policy — away from fragmented national production and toward integrated continental manufacturing capabilities.

The war in Ukraine has exposed the vulnerability of Europe’s defence supply chains. Years of underinvestment left many countries with limited surge capacity in munitions production. As the conflict intensified, European governments found themselves competing globally for shells, propellant materials and explosive compounds.

The European Union and NATO members have since poured billions into expanding the continent’s defence industrial base. Projects such as the Slovak propellant plant are increasingly viewed not merely as commercial ventures but as elements of strategic infrastructure.

A booming defence sector

The timing of the announcement also coincides with a broader boom in European defence equities. Investors have poured money into arms manufacturers as governments across the continent raise defence budgets and commit to long-term rearmament programmes.

Earlier this year, CSG completed one of the largest ever stock market listings by a defence company, underscoring investor appetite for firms positioned to supply Europe’s rearmament drive.

Industry analysts say the propellant plant project is emblematic of a new phase in Europe’s defence expansion — one focused less on headline weapons platforms and more on the less glamorous but critical components of sustained warfare.

“Artillery shells are only as plentiful as the weakest link in the supply chain,” one defence industry consultant noted. “Propellant charges, explosives and energetics have become the real choke points.”

The logistics of deterrence

The Slovak facility may therefore appear modest compared with fighter jet programmes or missile systems, yet its strategic implications are considerable. Modern artillery doctrine relies heavily on modular charge systems, which allow gunners to adjust the power of each shot depending on range and trajectory.

Ensuring a reliable supply of such charges is essential for maintaining the tempo of artillery operations — a lesson reinforced daily on the battlefields of eastern Ukraine.

For Central Europe, the project also represents a strengthening of regional defence industry networks stretching from France through the Czech Republic to Slovakia. Together, these countries are positioning themselves as key contributors to Europe’s emerging security architecture.

If the plant proceeds on schedule, its output by the end of the decade could help underpin Europe’s long-term ammunition supply — and ensure that the continent’s artillery does not fall silent for lack of propellant.

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