European weapons manufacturers have expanded their industrial facilities at three times the peacetime rate since Russia’s invasion of Ukraine, with building activity covering over 7 million square meters of new development across the continent, according to a Financial Times analysis of radar satellite data.

The analysis, which tracked 150 facilities across 37 companies, found that areas marked by changes jumped from 790,000 square meters in 2020-21 to 2.8 million square meters in 2024-25. About a third of the sites reviewed showed signs of expansion or construction work.

“These are deep and structural changes that will transform the defence industry in the medium to long term,” said William Alberque, a senior adjunct fellow at the Asia Pacific Forum and former director of Nato arms control. “Once you’re mass-producing shells, the metals and explosives start flowing, which drops the cost and complexity of missile production.”

Satellite surveillance reveals industrial transformation

The Financial Times used more than 1,000 radar satellite passes from the European Space Agency’s Sentinel-1 satellites to track changes at sites associated with ammunition and missile production. The satellites fire radar pulses and record their echoes to reveal surface alterations that may be hard to discern on conventional satellite images.

Among the sites with the biggest expansion was a joint project between German defense giant Rheinmetall and Hungarian state defense company N7 Holding, which has built a production site for ammunition and explosives in Várpalota in western Hungary. The first factory at the site was completed in July 2024, producing 30mm ammunition for Rheinmetall’s KF41 Lynx infantry fighting vehicle.

“We cannot comment on the alleged outlines of our production facilities on satellite images for reasons of corporate security,” said Patrick Rohmann, a spokesperson for Rheinmetall.

Construction continues as the site will also produce 155mm artillery shells and 120mm ammunition for the Leopard 2 tank and, potentially, the Panther, according to Rheinmetall. The site will also house an explosives factory.

EU funding drives rapid expansion

The analysis examined 88 sites linked to the EU’s Act in Support of Ammunition Production (ASAP) programme, which has invested €500 million ($586 mn) to tackle bottlenecks in ammunition and missile production. Clear physical expansion was visible at 20 sites with ASAP funding, including the construction of entirely new factories and roads. At 14 sites, small expansions such as new car parks were visible.

Companies receiving ASAP funds expanded more rapidly than those without EU funding, the analysis indicates. The Financial Times also examined 12 sites that were wait-listed for ASAP and 50 other sites in the EU and UK linked to missile production for comparison.

EU defense commissioner Andrius Kubilius told the Financial Times that since Moscow’s invasion, Europe’s annual capacity to produce ammunition had increased from 300,000 to reach about 2 million by the end of this year.

Rheinmetall’s expansion accounts for a significant portion of this growth. The company said its annual production capacity for 155mm rounds was set to rise from 70,000 in 2022 to 1.1 million in 2027.

Major projects across Europe

At the German headquarters of missile-maker MBDA in Schrobenhausen, new roads and building works are clearly visible. The radar identified changes affecting 94,000 square meters of terrain since 2022. The site benefited from €10 million through ASAP to expand production of the portable shoulder-launch Enforcer missile, but also received a $5.6 billion Nato commission to produce up to 1,000 Patriot GEM-T surface-to-air missiles on European soil.

“The order volume will enable MBDA to set up a production facility for Patriot missiles in Germany, as well as major subcomponent production,” said MBDA Germany director Thomas Gottschild.

Norwegian manufacturer Kongsberg opened a missile factory in June 2024, backed with NKr640 million ($62 million) of funding to increase missile production, including €10 million ($12 mn) from ASAP. “The expansion led to an exponential increase in our total missile production capacity,” said company spokesperson Ivar Simensen.

BAE Systems received support from Westminster and increasing orders from the UK Ministry of Defence, investing more than £150 million in its British munitions factories since 2022. At its Glascoed site in south Wales, digging is clearly visible on satellite images. BAE says it will increase the production capacity of 155mm shells sixteen-fold when the new explosive filling facility starts operating later this year.

Nordic expansion and future challenges

Norwegian-Finnish manufacturer Nammo received about €55 million ($65 mn) under ASAP to boost manufacturing of shells, propellant and powder. Significant expansion is clearly visible at Nammo’s Finnish production site in Vihtavuori.

“ASAP has been instrumental in helping Nammo make critically important investments in production,” said Thorstein Korsvold, a spokesperson for the company. Similar programmes in other areas were needed, Korsvold said, pointing out that “air defence missiles as well as high explosives are currently produced only in very small quantities.”

The EU is negotiating a new €1.5 billion ($1.7 bn) defense programme that “replicates the logic of ASAP” through grants, and would also fund joint procurement, according to the European Commission. Kubilius said the commission was looking at whether similar methods could be used “to incentivise industries to expand their production in other areas,” with priority areas including missiles and air defence, artillery and drones.

Production bottlenecks remain

Despite the expansions, officials and industry insiders say actual output in Europe is likely to be significantly below potential capacity. Experts believe that long-range strike capabilities remain a serious issue for Europe and Nato more broadly, as Russia is outpacing its adversaries.

Fabian Hoffmann, a researcher at the University of Oslo, said missiles were critical for a convincing deterrent against Russia’s superior ground forces. “Missiles are the precondition for Nato’s theory of victory. Because we are not going to keep up with Russia’s pace of mobilisation,” said Hoffmann.

“With Russia’s dramatic expansion the best we can do to establish a credible deterrence that if you shoot at us, we are going to shoot right back. But if we are ever going to get there, then we have to drastically expand our production.”

Hoffmann noted that “miniature jet engine production for long-range missiles are a huge bottleneck” for European missile production, suggesting these could be the next target of future EU spending programmes along with explosive filler.

“We cannot comment on the alleged outlines of our production facilities on satellite images for reasons of corporate security,” said Latvian Foreign Minister Baiba Braže, who called the expansion “a very positive and much needed development” but said it was “crucial” the defense industry was ready to deliver on Nato’s growing spending and use taxpayers’ money “effectively.”