Faced with industry collapse, Croatia’s iconic fertiliser plant Petrokemija Kutina is being saved from closure by switching from fertiliser to explosive-grade ammonium nitrate.
Strategic shift in Croatian manufacturing
In a dramatic industrial pivot, Petrokemija – the plant based in Kutina, western Slavonia – will cease fertiliser production. It will shift to manufacturing ammonium nitrate, a key component in both industrial and military explosives.
The plant, long known for its synthetic fertiliser output, is now repurposing its operations in response to a collapsing European fertiliser market. After years of declining profitability, Petrokemija Kutina was acquired by Turkish conglomerate Yildirim Group. However, the Croatian government has retained a 25 percent plus one share stake to preserve strategic influence.
From fertiliser to explosives – a national interest
The Croatian state’s minority stake still grants it veto power over strategic decisions. This reinforces the plant’s role as a critical national asset. With similar fertiliser plants in the UK and Belgium shutting down, the production of ammonium nitrate represents not only survival but a rebirth for Petrokemija Kutina.
This change safeguards over 1,100 jobs. It simultaneously positions Croatia as a domestic supplier of a vital resource used in ammunition manufacturing – a sector gaining urgency in light of European defence concerns.
Talks underway for Croatian ammunition production
Initial discussions are already taking place with international partners to establish a munitions plant within Croatia. Petrokemija Kutina’s shift aligns with broader efforts to strengthen Europe’s self-sufficiency in defense manufacturing by using locally produced ammonium nitrate.
The war in Ukraine has exposed vulnerabilities in military supply chains – in particular, the lack of local ammunition production. Having advanced weapons is of little use if ammunition must be sourced abroad, especially under geopolitical constraints.
Europe’s rearmament push sees Croatia step up
Driven by growing concerns over Russian aggression and the shifting reliability of US defense backing, Croatia is retooling its industrial sector. This contributes to a pan-European rearmament strategy. Petrokemija Kutina, alongside Germany reallocating Volkswagen factories for tank production, illustrates these efforts.
This is part of NATO’s new defense funding roadmap, which mandates member states to spend 3 percent of GDP on military capabilities by 2030. This will increase to 5 percent in the following years.
Croatian innovation across the defence sector
While Germany focuses on tanks and France on aircraft and anti-air systems, Croatia is playing to its strengths. Karlovac-based HS Produkt supplies high-quality firearms. Šestan-Bush in Međimurje produces elite helmets and gear, and Pićan is home to grenade launcher production.
Meanwhile, Croatia’s growing drone sector – driven by private tech firms – is already producing small tactical drones. This sector aims to take a leadership role within the EU. With Petrokemija Kutina now added to the list, focused on producing explosives, the Croatian defense industry is rapidly expanding its capabilities.