ARCA secures Kiviõli ammunition plant permit, production set for 2028

ARCA Baltics Operations received an operating permit on October 20 for an ammunition plant in North Kiviõli, with production planned to begin in 2028, ERR reported. The plant’s output will include ammunition for the Estonian Defence Forces.

The company can continue design work and other preparations, said Ines Edur, a spokesperson for the Ministry of Defence. Construction can begin after the company signs a property agreement and receives a building permit. The parties aim to sign the property agreement by the end of this year.

The state has signed a preliminary agreement granting the company building rights on 141 hectares in the North Kiviõli defence industry park. It will invest up to 10 million euros in access roads, fencing and the electricity, gas and water connections needed for production.

ARCA Baltics Operations plans to invest 300 million euros in production facilities, equipment and storage. The company says it could create up to 1,000 jobs in the region. The Estonian state and the company are working together towards the planned 2028 start.

A commission established under the Weapons Act handles permits for producing ammunition for military weapons. It is led by the Consumer Protection and Technical Regulatory Authority and includes representatives of the Internal Security Service, the Police and Border Guard Board, the Defence Forces and the Rescue Board.

ARCA’s founder and chief executive has previously been suspected of manipulating NATO contracts for money. Edur said ARCA and ARCA Baltics Operations met all the tender requirements, including the requirement that the company and its shareholders, beneficial owners and board members have no current criminal convictions. Security agencies were consulted during the tender process, and no disqualifying factors were identified for ARCA.

In September, Postimees reported that ARCA Defence had sought a representative in Estonia since 2024. Swiss entrepreneur Beat Eberle initially sought to represent the company and founded ARCA Baltics Operations in October 2024. The company was later advised by ESC OÜ, a firm owned by Jaanus Rahumägi. Rahumägi said his company began advising ARCA in April 2025 and that the Turkish company had made the initial contact.

Edur said local production of large-calibre ammunition would improve supply conditions and help replenish Estonia’s stocks more quickly, strengthening the country’s ability to maintain its defence capabilities during crises. Ammunition and explosives manufacturers in Estonia must comply with national safety and security requirements. The relevant authorities oversee compliance within their areas of responsibility.