Portugal to revive ammunition production through FN Herstal joint venture

LISBON, Sept 29 (Reuters) - Portugal's state-owned company idD Portugal Defence and Belgian firearms maker FN Herstal signed a deal on Tuesday to build a small-calibre ammunition factory, restoring Portuguese ammunition production after nearly three decades, Defence Minister Nuno Melo said.

• The factory, to be developed through a joint venture, will involve an investment of €50 million ($57 million) and is expected to become operational in 2029, Melo said

• Portugal expects to hold a minority stake of about 35% in the venture

• The deal falls within the framework of the European Union's SAFE programme, under which Portugal has access to roughly €5.8 billion in European loans to acquire military equipment and develop domestic industrial capacity

• It is the third project financed through the SAFE programme, following Portugal's acquisition of three Fincantieri frigates for €3.9 billion and 75 tactical vehicles for the Marine Corps worth €133 million

• The factory "will bring back to the country a fundamental capability that we should never have lost", Melo said

• FN Herstal is part of the FN Browning Group, which already has a manufacturing facility in Viana do Castelo in northern Portugal that produces hunting and sporting firearms.

($1 = 0.8816 euros)