Unexpected: Hungary to become the proud producer of NATO’s machine gun ammunition
The Hungarian defense industry has expanded dramatically in recent years. Now the Swiss-based, now Czech-owned company Saltech is set to start large-caliber ammunition production in Hungary.
The company’s production lines have already been shipped to Hungary, and manufacturing is expected to begin in 2025. According to the Tages-Anzeiger, NATO excluded Swiss suppliers from several tenders because they were unable to deliver on time.
Previously, Saltech produced large-caliber, military-grade cartridges in Switzerland, but strict export restrictions increasingly hindered international sales. For this reason, Saltech’s parent company, the Czech Colt CZ Group, decided to continue production of NATO-standard machine gun ammunition in Hungary. The exact location of the new facility has not yet been disclosed, but the investment could create hundreds of jobs and strengthen Hungary’s role in the regional arms and ammunition industry.
Why is Saltech coming to Hungary?
Switzerland is known for its strict arms export controls, making export permits difficult to obtain, especially for products that might end up in conflict zones. Consequently, several manufacturers have recently relocated production to Central and Eastern Europe, where regulations are more flexible, labor costs are lower, and logistics are more convenient.
Hungary is particularly active in this area: the state considers the defense sector strategic and has supported numerous foreign investors in recent years. Saltech’s decision is a result of this policy.
Key Hungarian defense industry companies
Over the past few years, Hungary has significantly developed its defense industry. From small arms and ammunition to armored vehicles and helicopter parts, domestic production now covers nearly every segment. The state-owned N7 Holding and its partners, including Rheinmetall, Airbus, and the Czech Colt CZ Group, are establishing an increasingly broad technological base.
The largest investments have come from German Rheinmetall, which develops and assembles Lynx infantry fighting vehicles in Zalaegerszeg and has built a new ammunition and explosives factory in Várpalota. The Várpalota plant primarily supplies the Hungarian Defence Forces but could also export to NATO countries in the future.
Key domestic defense companies:
- Rheinmetall Hungary Munitions Zrt. (Várpalota) – an ammunition factory employing hundreds of people, producing to NATO standards.
- Arzenál Fegyvergyár Zrt. (Kiskunfélegyháza) – a Hungarian-owned company producing small arms, weapon components, and specialized military equipment, mainly for the Hungarian armed forces and law enforcement.
- HM Arzenál Zrt. (Nyírtelek) – owned by the Ministry of Defence, handling maintenance, modernization, and component production, ensuring the operational readiness of military equipment.
Who uses Hungarian-made weapons?
Most domestic defense production is for the Hungarian Defence Forces, but factories also serve a wider market. For example, Rheinmetall’s investments are closely tied to the Zrínyi 2026 modernization program, and Várpalota and Zalaegerszeg plants could supply other NATO countries in the future.
This does not mean direct NATO orders; rather, Hungarian production follows alliance standards, so weapons and ammunition can be used by other armed forces.
Saltech’s Hungarian facility will produce 12.7mm machine gun ammunition to NATO standards, compatible with allied weapon systems.
Smaller, Hungarian-owned companies primarily serve law enforcement, security firms, or civilian users, such as sport shooters and hunters. This diversity allows the domestic defense industry to be flexible and responsive to specialized needs alongside large international corporations.
Fun fact – and as I believe I mentioned when the Military Industrial Complex started looking into Hungarian manufacturing… My prediction was that our Politicians would fold regarding the export restrictions on weapons and munitions, at the sight of all that money. And here we are. “Peace!”.
Maybe this pragmatic “common sense” approach will score Hungary some brownie points with NATO and the EU – since Ukraine uses vast quantities of 12.7mm ammo. Supplied by … You guessed it!