Estonia Approves Piirsalu Plan for €150M RDX Explosives Plant

Estonia has approved a national spatial plan for a defense industrial park in Piirsalu, clearing a key planning step for a €150 million military explosives factory operated by state-owned Hexest Materials. The government announced the decision on October 8, with production of RDX explosives targeted to begin in 2028.

The planned facility, located in Lääne-Nigula Municipality in western Estonia, is expected to create approximately 75 jobs. The government will also invest more than €6 million in basic infrastructure for the industrial park, separate from the estimated factory investment.

According to the Estonian Ministry of Defence, the project is intended to establish domestic production of RDX, a high-energy military explosive used in ammunition, warheads and explosive charges.

Defense Minister Martin Herem said the shortage of explosives manufacturing capacity across NATO countries had become a pressing concern amid continued demand from the war in Ukraine.

Hexest Materials Plans RDX Production by 2028

Hexest Materials was established by the Estonian government in May 2025 to develop military explosives production capabilities. The company describes its planned facility as the first dedicated RDX military explosives production plant in the Baltic region.

RDX, also known as hexogen, is an important ingredient in military explosive compositions used in artillery ammunition, mines, demolition charges and various warheads.

Although Estonia has an expanding defense technology sector, the country currently lacks a domestic industrial-scale production facility dedicated to RDX.

The Piirsalu project would introduce a new segment of defense manufacturing to Estonia, which has historically relied on imports for many of the materials and components used in ammunition production.

The government has not disclosed the plant's planned annual output or confirmed the timing of construction.

Its October 8 decision formally establishes the national spatial plan for the Piirsalu industrial area. Further development and permitting work will still be required before the facility can begin operations.

Estonia Seeks Strategic Investor for 49% Stake

The factory project also involves a planned partnership with a private defense industry investor.

In April 2026, Estonia's Ministry of Defence launched a competitive selection process for a strategic investor in Hexest Materials.

Under the published terms, the successful investor would acquire a 49% stake through a share subscription arrangement, while the Estonian government would retain majority ownership.

Applicants must demonstrate the financial capacity to invest at least €50 million and possess relevant experience in manufacturing military explosives, ammunition, weapons or weapon systems.

The selection process specifically targets companies from allied and partner countries. Investors must also satisfy security and reliability requirements.

KPMG Baltics has been engaged to support the process.

The initial tender timetable set a May 29 deadline for participation applications and June 17 for non-binding bids. The October 8 government announcement did not identify a selected strategic investor or confirm that an investment agreement had been signed.

That distinction matters because the estimated €150 million project cost represents the planned investment required to establish production, rather than a newly announced construction contract.

Environmental Conditions Included in Piirsalu Approval

The Piirsalu development has also faced scrutiny over its potential environmental impact.

During the planning process, local residents raised concerns about water resources, industrial waste and safety.

The Ministry of Defence said the approved plan incorporates additional requirements intended to address those concerns. One condition is that explosive production waste will not be routinely burned in the open air. Instead, the facility must use specialized enclosed incineration equipment.

The future operator must also continue ecological monitoring of the Piirsalu River and monitor groundwater levels and drinking water quality near the industrial park in cooperation with local authorities and residents.

These conditions will form part of the project's subsequent development and operating requirements.

Third Estonian Defense Industrial Park Site Approved

Piirsalu is the third location in Estonia where a national spatial plan for a defense industrial park has been established.

Similar plans have already been approved for Ermistu in Pärnu County and Põhja-Kiviõli in northeastern Estonia. Planning work remains underway at Aidu, another location in the country's northeastern industrial region.

The Hexest Materials project would add explosives manufacturing to Estonia's broader defense industrial development efforts.

The country is also home to manufacturers developing missile interceptors, unmanned systems and military electronics. AdriaDefense recently profiled seven Estonian defense technology companies active across those sectors.

For Hexest Materials, the next major milestones are securing its industrial partner, completing the remaining development requirements and moving toward construction.

The company continues to target 2028 for the start of RDX production.

Key Questions About the Piirsalu Project

What will Estonia produce at the Piirsalu factory?

The planned Hexest Materials facility will manufacture RDX, also known as hexogen, a military explosive used in ammunition and other explosive compositions.

How much will the factory cost?

Estonian authorities estimate the investment required to establish production at approximately €150 million. The government also plans to spend more than €6 million on the industrial park's basic infrastructure.

Who owns Hexest Materials?

Hexest Materials was established by the Estonian government in 2025. The state is seeking a private strategic investor for a 49% stake while retaining majority ownership.

When will production begin?

The government and Hexest Materials are targeting 2028. The October 8 decision approved the spatial plan, not the completion of construction or the start of manufacturing.

Author: Daniel Opoku / AdriaDefense.com