Nalagx and Eurenco intend to develop an explosives plant at an unidentified site in Canada.

The Canadian and French companies announced in Paris that they have signed a letter of intent to finalize an agreement whereby they would establish an industrial campus. Nalagx and Eurenco said the proposed plant will strengthen Canada’s defence industrial base and and improve the resilience of European and North American ammunition manufacturers.

If all goes according to plan, the new facility will become the country’s largest explosives factory built in Canada since the Second World War, according to The Globe and Mail.

Nalagx is a startup led by former Liberal MP Patrick Gagnon, who also serves as the managing partner for Ottawa-based government-relations and lobbying firm the Parliamentary Group. Gagnon said the proposed project will generate an economic impact of about US$1 billion 500 direct jobs in the region in which it is located.

Ottawa-based Nalagx and Eurenco described the proposed facility’s future products as “energetic materials,” including shells and heavy artillery.

“Our agreement is a concrete illustration of the rebirth of the defence industry in Canada,” said Gagnon, Nalagx’s CEO.

The companies are poised to tap into billions of dollars in increased defence spending that the federal government has budgeted over the next five years to boost per-capital spending in relation to GDP. The additional spending has resulted in part from U.S. President Donald Trump’s complaints that Canada does not spend enough on defence compared to the U.S. The larger budget allocations are also designed to make Canada less reliant on the U.S. for weapons and other military-equipment protection.

Eurenco ranks as Europe’s top producer of propellants and explosives. Plans call for Nalagx to own the facility and Eurenco to operate it.

“This letter of intent illustrates Euenco’s growth and resilience,” said Thierry Francou, the company’s CEO. “It reflects our commitment to working hand-in-hand with strategic partners, in Europe and beyond, to strengthen industrial sovereignty and ensure security of supply for our European and NATO customers.”

Eurenco ranks as Europe’s top producer of propellants and explosives. Plans call for Nalagx to own the facility and Eurenco to operate it.

The plant is slated to commence operations in 2029.

Photo: Eurenco