As war rages, Denmark turns office park back into arsenal

The old Krudten ammunition plant, near the northernmost tip of Denmark, is a quiet shell of a factory that has sat empty for years despite its legacy of churning out bullets, artillery, and explosives for the Danish military.

But that is about to change: With the war in Ukraine fueling growing demand for Western weapons, the Danish government has decided to revive its role in the ammunition business.

In 2008, amid defense cutbacks that swept across Europe and cratering global economies, Denmark sold off Krudten, its military’s main munitions plant. It was passed around among private firms until October, when the government decided to buy it back, becoming one of the latest countries to increase its focus on weapons manufacturing and counter Russia’s rapidly expanding arms industry.

“It was crucial to get this plant,” Danish Defense Minister Troels Lund Poulsen said in an interview this month, noting “a greater demand for ammunition” across Europe.

“We should be concerned because Russia is ramping up production of ammunition and also other kinds of military equipment,” Poulsen said. “That’s the reason why we have decided in the European Union that you have to support countries doing what they can to ramp up production.”

Officials from NATO countries worry that Ukraine will run out of weapons early next year, given that Republicans in Congress have blocked additional US military aid and Hungary has vetoed another financial package from the European Union. Russia’s skyrocketing weapons industry has triggered palpable anxiety within NATO — not only because it has helped stall Ukraine’s six-month counteroffensive but as a sign of Russia’s growing might.

That has sent European countries searching for ways to increase their own weapons production, including loosening regulations and incentivizing investment.

At Krudten — which translates from Danish to “the gunpowder” — officials hope to hire a private company to produce ammunition in the state-owned factory, which is housed in aging brick buildings across a sprawling rural campus.

That is a model similar to military ammunition production in the United States, where plants are owned by the government but run by private contractors who are backed by federal funding to quickly adjust to market demands. By early 2024, the United States is projected to have more than doubled its monthly production of 155 mm caliber rounds to 36,000, up from 14,000 when Russia invaded Ukraine in February 2022.

But in Europe, where countries have diverse economies, budget constraints, and a range of government regulations over defense industries, there is no single standard for working with weapons producers. To speed approvals, the European Union is offering financial incentives to states that jointly order large amounts of ammunition and is considering easing regulations that industry executives say have curtailed production.

The attempt to forge closer ties between governments and manufacturers comes as the EU campaign to provide 1 million 155 mm rounds to Ukraine within 12 months is expected to fail. With four months until the March deadline, officials have secured fewer than half of the shells that were promised because European capitals have been reluctant to invest in weapons producers that need more resources and fewer supply-chain bottlenecks to deliver.

“Overall, our instruments for cooperation are still punching below their weight,” Ursula von der Leyen, the European Commission president, said at an annual European Defense Agency conference in late November.

She suggested that EU sanctions against states with ballooning national deficits might be forgiven if increased defense spending contributed to the rise. “This could be a game changer for the union’s defense and its defense industrial policies in these exceptional times,” von der Leyen said.

It is likely to be an uncomfortable adjustment for governments and industry alike.

“I’m not a huge fan of government-owned production, but the baseline for me is that there is an extreme demand out there and not enough production capacity,” said Joachim Finkielman, director of the Danish Defense and Security Industries Association.

Currently, he said, Denmark gets its military ammunition from foreign producers. Once the Krudten plant is up and running, which could take about two years, the government will need to invest enough to ensure enough ammunition will be made to supply the Danish military and export to customers abroad “in order for this to work as a business opportunity,” Finkielman said.

“The idea of government stepping in, both with a signal of political intention to set up a market and actually providing this factory for industrial use, I think is an interesting step,” he said.

Finland’s Defense Ministry announced this month that it would double its capacity to produce a range of heavy ammunition calibers and explosives by the end of 2027. Under the $131 million deal — including $26 million from the government — at least some of the work will be done at a smallarms plant operated by Nammo, a Norway-based ammunition company in which Finland indirectly owns a stake.

‘We should be concerned because Russia is ramping up production of ammunition.’

TROELS LUND POULSEN, Danish defense minister