Hexest Materials is tasked with establishing a military explosives plant in Estonia to reduce the shortage of explosives in Europe's defense industry, strengthen Estonia's defense sector and capabilities and stimulate the national economy. The company is currently wholly state-owned, with plans to bring in a strategic investor while the state retains a majority stake.

Hanno Pevkur (Reform) explained that the Estonian government is planning to build a plant for the military explosive RDX as a strategic production capacity. "To find a strategic investor, we are looking toward manufacturers of explosives, ammunition or military weapons operating in allied and partner countries. The expertise of a future key partner will help Hexest Materials successfully enter the defense industry market, remain competitive and generate revenue," the defense minister said.

Hexest Materials management board member Randel Veerits added that in recent months, the company has focused on negotiations with a core technology partner, refining its business plan and expanding its team.

"We have made preparations to bring in a strategic investor. We are moving at a good pace to achieve our goal of starting explosives production in 2028," Veerits said.

To find a strategic investor, the Ministry of Defense will organize a competitive selection process to transfer preemptive subscription rights for Hexest Materials shares. Participants must meet several preconditions to ensure both financial stability and the capability to enter and operate in the defense industry market.

Under the terms, the strategic investor must have the capacity to invest at least €50 million. In addition, the investor must have the expertise to produce and sell military explosives, ammunition or weapons and weapons systems. As the selection process involves security considerations, the investor will also be subject to requirements related to reliability and origin.

The strategic investor will acquire a 49 percent stake in Hexest Materials by obtaining preemptive subscription rights in accordance with the investment agreement concluded as a result of the selection process. The state will retain a majority stake by subscribing to the remaining shares. The exact equity contribution and final share price will be determined during the selection process.

Hexest Materials AS is a state-founded company established in 2025, with the Ministry of Defense acting as the owner's representative. Its area of activity is the production of the military explosive RDX. The exact location of the plant has not yet been decided and potential sites are being considered in the ongoing national special spatial planning process.

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