Greece and CSG Launch Ammunition Hub to Bolster European Defense

ATHENS, Greece – January 30, 2026 – In a move signaling a major shift in European defense strategy, Czech industrial giant Czechoslovak Group (CSG) and Greece’s state-owned Hellenic Defence Systems (HDS) have finalized a landmark agreement to establish a major ammunition production hub in Lavrio, Greece. The deal, which creates the joint venture Hellenic Ammunition S.A., is poised to revitalize a key industrial site, create hundreds of jobs, and directly address the continent's severe ammunition shortages exposed by the war in Ukraine.

The founding documents were signed in Athens by Jiří Schönweitz, Managing Director of MSM Greece, a CSG subsidiary, and Christoforos Boutsikakis, CEO of HDS. The agreement grants CSG managerial control over the Lavrio production facility for 25 years, paving the way for a massive investment and modernization program.

“Today’s signing marks a key milestone not only for our joint project with HDS, but also for strengthening Europe’s defence industrial base. Lavrio is becoming an important pillar of ammunition production for Greece, Europe and its allies,” said Jiří Schönweitz. He added that the venture would help “place the Greek defence manufacturing industry back on the world map where it belongs.”

A Strategic Response to a Changed Continent

The Lavrio project is not happening in a vacuum. It is a direct response to a stark reality: Europe's defense industrial base has been unable to keep pace with the demands of modern warfare. The conflict in Ukraine has created an insatiable appetite for artillery shells, particularly 155mm rounds, revealing critical production gaps across NATO. Recent estimates show Russia's artillery production far outstripping that of Western allies, creating a strategic vulnerability that European leaders are scrambling to address.

This joint venture is a cornerstone of a broader European push for “strategic autonomy”—the ability to act independently on security and defense matters. By onshoring the production of not just ammunition but also critical components like TNT and propellants, the Lavrio facility aims to reduce reliance on fragile international supply chains. Historically, much of Europe's energy-intensive explosives production was outsourced, a decision whose consequences are now being acutely felt. The restoration of these capabilities within the EU is seen as a matter of urgent national and continental security.

Revitalizing a Greek Industrial Legacy

For Greece, the deal represents a significant industrial and strategic victory. Hellenic Defence Systems, with a history stretching back 150 years, has faced periods of financial difficulty and inefficiency common to state-owned enterprises. This joint venture injects vital foreign capital and modern expertise into a company of strategic national importance.

CSG has committed to investing up to €50 million in the long term, an amount supplemented by a €33 million grant from the European Union's Act in Support of Ammunition Production (ASAP) program. The investment is a key part of Greece's ambitious €25 billion, 12-year defense modernization plan, which seeks to build one of Europe's most advanced militaries with a strong domestic industrial base.

“The restoration of large-calibre ammunition production in Lavrio is a strategic step for the Greek defence industry and for Europe’s security,” stated Christoforos Boutsikakis, CEO of HDS. “The joint venture with CSG brings investment, modern technologies and know-how that will enable sustainable long-term development of capacities and the creation of hundreds of jobs.”

The economic impact on the Lavrio region is expected to be immediate. The facility, which currently employs around 120 people, plans to more than double its workforce, recruiting an additional 180 employees this year to reach a total of approximately 300. Some projections suggest the creation of up to 400 new jobs within three years, marking a significant industrial rebirth for the area.

CSG's Calculated Expansion and Vertical Integration

This venture is a textbook move for Czechoslovak Group, a company that has quietly become a dominant force in the European defense sector. Headquartered in the Netherlands with management in Prague, CSG has been on an aggressive expansion and acquisition spree. The company's revenues have soared, with a reported €5.2 billion in 2024 and projections exceeding €6.4 billion for 2025. Its order backlog swelled to a staggering €14 billion in the first half of 2025.

Recent strategic moves include the acquisition of The Kinetic Group in the U.S. small-caliber ammunition market, a majority stake in medium-caliber ammunition maker ZVI Vsetín, and a nitrocellulose plant in Germany. The Greek deal is a critical piece of this puzzle, strengthening CSG's vertical integration by securing in-house production of essential raw materials for ammunition.

By controlling the Lavrio site, CSG not only expands its production capacity but also de-risks its supply chain. The ability to produce its own TNT and propellants provides a significant competitive advantage in a market plagued by bottlenecks. The 25-year management term allows the company to implement a long-term vision for the plant, transforming it into a state-of-the-art facility that serves as a key European hub for NATO and its allies.

Ambitious Timelines and Technical Hurdles

The road ahead involves a highly ambitious and technically complex ramp-up. While the Lavrio plant is already producing 155mm ammunition, the plan is to introduce other large calibers and transition to a multi-shift operation during 2026 to maximize output.

A significant technological milestone is the planned launch of base bleed grain production in the second half of this year. This composite propellant increases the range of artillery shells, a key capability in modern combat. Even more critical is the restoration of TNT production. This complex project, which now includes the production of key intermediate chemicals, is scheduled to begin at the turn of 2026 and 2027, with some sources indicating spring 2027 to meet EU grant requirements.

Successfully meeting these aggressive timelines will be the ultimate test of the joint venture's effectiveness. The project represents more than just a business deal; it is a high-stakes bet on Europe's ability to rebuild its industrial might and secure its future in an increasingly dangerous world.