Committee chair says threat level unchanged despite warnings of Russia’s possible attacks

Ukrainian defense company DEMZ has announced plans to invest in a new ammunition manufacturing plant in Lithuania, marking a significant step in bilateral defense cooperation. The Lithuanian Ministry of the Economy and Innovation confirmed the investment agreement on Thursday, stating that DEMZ will establish a regional production and innovation center in the country. This initiative includes the development and testing of new products that meet NATO standards. In addition, the Lithuanian Ministry of Defense will sign a memorandum of understanding with DEMZ to further explore how the company's local production can address Ukraine’s defense needs and bolster resilient supply chains in Europe. The investment agreement was formally signed on Friday by Lithuanian Economy Minister Edvinas Grikšas and DEMZ Chief Jevhen Muzykin during a ceremony in Vilnius. While the total value of the investment was not disclosed, officials indicated it would be among Lithuania’s largest recent investments. DEMZ plans to construct an ammunition assembly plant near Balbieriškis in the Prienai district and manufacture metal shell components at the Alytus Industrial Park. Construction is set to begin this autumn, with production anticipated to commence by the end of 2027. According to Alytus Mayor Nerijus Cesiulis, the project represents the largest investment in the region to date, with estimates suggesting tens of millions of euros will be invested in the city. The Prienai Mayor, Alvydas Vaicekauskas, confirmed the location of the new ammunition plant. The agreement also includes a memorandum of understanding between the Lithuanian Ministry of Defense and DEMZ to explore ways to utilize the company’s local production capabilities to meet Ukraine’s defense requirements and enhance European defense resilience. Prime Minister Mindaugas Sinkevičius emphasized the importance of the project for both national security and economic growth. He stated that Lithuania would leverage Ukrainian expertise and battlefield experience to produce NATO-standard defense products. Economy Minister Grikšas noted that the investment would generate highly skilled jobs and contribute to the development of a broader ecosystem of Lithuanian defense companies around DEMZ’s facilities. The products manufactured in Lithuania will primarily serve the Ukrainian armed forces, with allied defense needs forming a secondary market. Defense Minister Robertas Kaunas highlighted the strategic significance of the investment, stating that it would enable Lithuania to adapt more swiftly to evolving battlefield conditions. He emphasized the importance of having additional production capacities to respond to shifting security risks. The project aligns with Lithuania’s broader strategy to expand its defense industry and strengthen domestic production capabilities in response to the ongoing conflict with Russia. In parallel, Lithuania is also exploring opportunities to attract foreign investment in its dairy sector. One of Saudi Arabia’s largest food and retail groups, BinDawood Holding, is reportedly considering investments in Lithuania’s dairy industry, potentially through the establishment of a new processing plant or acquisition of an existing dairy company. This move comes amid challenges faced by Lithuania’s dairy sector, including a decline in the number of farms and dairy cows due to low milk purchase prices that often fail to cover production costs. Eimantas Bičius, director of the Lithuanian Milk Producers Association, noted that Lithuania has one of the lowest milk purchase prices within the European Union. With the number of dairy cows decreasing significantly over the past year, farmers have been closing their operations due to financial pressures. Despite these challenges, BinDawood Holding’s CEO, Ahmad BinDawood, expressed interest in Lithuania’s safe investment environment and high-quality food products, indicating a potential focus on either constructing a new facility or utilizing existing infrastructure for export purposes. Agriculture Minister Kęstutis Mažeika outlined the potential benefits of such an investment, suggesting it could enhance access to the Saudi Arabian market and introduce increased competition within Lithuania’s dairy sector, potentially leading to improved prices for raw materials. However, skepticism persists among local dairy farmers regarding the likelihood of substantial changes resulting from the proposed investment, given previous unfulfilled promises related to expanding dairy exports to other international markets. As Lithuania continues to seek foreign investment to revitalize its dairy industry, the government has committed to supporting BinDawood Holding’s efforts. Nevertheless, rebuilding the dairy sector would require sustained stability in milk purchase prices and predictable market conditions, a goal that remains distant for many local farmers. Meanwhile, domestic processors are increasingly looking overseas for expansion, exemplified by Vilvi Group’s recent opening of a new plant in Latvia.