At the foot of the Carpathian Mountains, in a small Romanian town called Zarnesti, there’s a building where the windows are broken and the doors are tied shut with wire. It looks like nobody’s used it in years. Yet it is actually full of explosives.
This is Romania's defence industry. Or a sizeable chunk of it, anyway.
Romarm National Company is Romania's largest arms manufacturer and it is 100% owned by the state. It is also the parent company of 15 subsidiaries spread across the country, from Bucharest to small industrial towns like Cugir, Moreni and Resita.
Legally, these subsidiaries are separate companies with their own boards and management, but Romarm coordinates and oversees them. They produce everything from ammunition and explosives to artillery systems and machine parts for military equipment. On paper, their job is to arm the Romanian military and to help supply Romania's NATO allies.
That job has never been more critical. Romania’s own national defence strategy, published earlier this year, names Russia as the country’s central security threat, and it lists the national economy – including its ability to produce military equipment – as one of the country’s top defence priorities. In theory, Romarm’s factories are exactly the kind of asset that matters most right now.
On the surface at least, the numbers would appear to back that up. In 2025, Romania exported 314 million euros’ worth of military equipment abroad, more than a quarter of which was ammunition – the kind of product that several Romarm factories are supposed to be making.
Yet a closer look inside these plants and the picture changes. Several of the people running Romarm’s subsidiaries enjoy close ties to the country’s political parties. Some even have corruption cases hanging over them. On the ground, the results of this patronage, corruption and poor management are showing: one factory hasn’t delivered artillery weapons or ammunition for nearly 17 years, yet it keeps drawing taxpayer funds for paying its workers. At another, the lights don’t even turn on, according to the company’s own documents.
“This is the result of how Romarm has done its job: at its weapons factories, the rain comes in, the wind blows through and nothing gets made. That’s the outcome, and that’s what matters,” interim Defence Minister Radu Miruta said in a scathing interview in May.
Jobs for the boys
At Uzina Mecanica Bucuresti, Romania’s only tank manufacturer, the general manager Mihai Rafiu was detained over the summer by anti-corruption prosecutors. He is accused of taking bribes from a contractor in exchange for approving procurement deals. The case is still open.
UM Bucuresti declined to comment on the ongoing investigation itself. But the company confirmed to BIRN that its board has temporarily reassigned Rafiu’s duties to the company’s economic director. Rafiu did not respond to questions sent through the company.
At Carfil, one of Romania’s main ammunition makers, a similar story played out a decade earlier, although what followed was rather unusual. In 2015, Carfil’s general manager, Aurel Veltan, was arrested and later convicted of abuse of office for steering company contracts to a firm without following proper procurement rules. A court sentenced him to a suspended prison sentence and banned him from holding leadership roles at state-owned companies for five years. However, Veltan apparently never left Carfil. According to his resume, he stayed on as head of the marketing and sales unit, and in October 2024 he was promoted to commercial director.
Veltan told BIRN that Carfil restructured in 2024 and brought in experienced people for leadership roles, including himself. He pointed to his three decades working in the company’s commercial department. He declined to comment on the criminal case or the sentence he served.
Some of the men running these plants have both a political resume as well as a police file. Ioan Narcis Chisalita, interim director of Arsenal Resita, an artillery factory, spent years as a senator and worked as an adviser to former prime minister Viktor Ponta, who was forced out of office in 2015 after a nightclub fire that killed 65 people.
In 2019, prosecutors named Chisalita as a suspect in a wider corruption case involving a regional road authority, accusing him of using his position in a political party to help push through illegal job appointments. One part of that case against him was closed last year – not because he was cleared, but because the statute of limitations had expired. A separate related case is still active in court, but Chisalita told BIRN he is not a party to the proceedings.
He added that he was appointed interim director of Arsenal Resita because of his “personal experience in corporate governance and in running private companies as an administrator”.
Other figures raise political rather than legal questions. Razvan Marian Pircalabescu spent many years advising ministers before serving as an advisor in the prime minister’s office in late 2024 and 2025 – a period that spanned governments from both of Romania’s main parties, the Social Democratic Party (PSD) and the National Liberal Party (PNL). In August 2025, he was named general manager of Romarm. His own resume shows he simultaneously serves as board president of Carfil, one of the 15 companies Romarm oversees, meaning he effectively answers to himself.
Carfil told BIRN that Pircalabescu’s dual role is “outside the company’s scope of authority” and declined to comment further. Pircalabescu did not respond to enquiries.
At the Sadu munitions plant in the southwestern part of Romania, Viorel Salvador Caragea was, until recently, a special administrator, an Economy Ministry-appointed overseer of the company’s finances.
Caragea spent nearly three decades in the police force, rising to become the top police official in Gorj county before retiring. He was appointed to the job at Sadu with the backing of the Save Romania Union (USR) party. Since then, the national press have reported a string of legal disputes: courts have twice ordered him to pay damages over comments he made online about a prosecutor and a mayor.
Sadu confirmed that Caragea had received BIRN’s questions. The company later informed BIRN that on September 17, after the questions had been sent, he was dismissed as its special administrator. The company gave no further explanation.
These five are by no means anomalies. Several other Romarm subsidiaries have board members or directors with similar political backing, appointed under different governments and different parties.
But the problems extend well beyond those running the companies. Inside the factories themselves, the picture is even more troubling.
The cost of doing nothing
Take Pirochim Victoria, a state-owned plant in the central Transylvanian region built to manufacture gunpowder for ammunition. By its own admission, the factory hasn’t produced anything since 2022. In the first six months of 2026, it brought in less than 2,000 euros in revenue – next to nothing for a company that’s supposed to be arming the military. And yet the state keeps sending taxpayer money its way: over 100 million euros since 2022, meant to modernise the plant and get production up and running again. Only a fraction of that amount has actually been spent.
Pirochim told BIRN that the delay in using that investment is tied to an ongoing legal dispute over the expropriation of land needed for the plant. The company said the investment is expected to be completed 36 months after a new company – a joint venture with German defence contractor Rheinmetall to be called Fabrica de Pulberi Rheinmetall Victoria – is formally established.
At Carfil, the problem is not a shortage of money, but how it has been spent, mainly on projects that were abandoned or assets that have been left idle.
In 2000, Cargil began modernising its foundry, a project meant to upgrade how it casts metal parts. But two and a half decades later, the equipment bought for it – worth an estimated 4.0-4.5 million euros several years ago – is still sitting there, unused. In 2004, Carfil also shut down its civilian production line entirely. It hasn’t made a single civilian product since, but the company still spends close to 800,000 euros a year on costs tied to those unused civilian assets.
In response to BIRN’s enquiries, Carfil said the equipment has been out of warranty for eight to ten years, describing it as “non-functional” due to outdated hardware and software, worn bearings, and aging rubber and plastic parts. The company said it has found outside partners willing to help finish the project, though it didn’t name them or say when.
Holes in security
The effects of these years of neglect and poor management are visible everywhere.
At Tohan, one of Romania’s oldest ammunition factories, security has deteriorated to an alarming degree. In 2025 alone, guards discovered 14 access doors left wide open and unlocked. In the section of the plant where pyrotechnic materials are stored, some buildings have broken windows and doors held shut with nothing more than wire, according to documents obtained by BIRN.
Lighting across the site barely works: in some sections, less than half of it is functional, and in one storage area it is just 5 per cent. The perimeter fence is missing in several places entirely, torn down or stolen, leaving sections of the plant completely exposed.
The company did not respond to BIRN’s questions about this matter.
Tohan isn’t the only plant showing its age. At several other Romarm factories, machinery dates back to the 1960s, 70s and 80s – old enough that, at one plant, basic measuring equipment is so degraded that workers routinely improvise just to get a usable reading.
These plants exhibit another area of vulnerability: twice in the past two years Romarm plants have fallen victim to the same kind of scam.
At Tohan, according to the public documents, hackers hijacked an email exchange with a real supplier in Germany and tricked staff into wiring more than 20,000 euros to an account controlled by the scammers.
A similar scheme played out at the Fagaras gunpowder plant, one of Romania’s main explosives makers. A public report from 2024 says that a hacker intercepted email communications between the company and a supplier in Slovakia, and swapped in a false bank account to redirect a payment worth roughly 17,000 euros meant for a shipment of concentrated nitric acid – a key raw material in making explosives.
The company said the case to recover the money is currently before a court in Poland. It declined to say what cybersecurity measures, if any, had been put in place since.
Worryingly, these aren’t ordinary companies being scammed; they’re state defence plants that should have appropriate levels of cybersecurity. Yet criminal actors, possibly foreign based, are gaining access to their internal systems.
Yet none of this appears to have raised any alarm bells and halted money flowing into these companies. Worryingly, billions of euros in fresh money are set to be invested, much of it through the Security Action for Europe (SAFE), the EU’s defence loan program that is part of the bloc’s ReArm Europe drive. Romania submitted a national investment plan that will give it access to 16.7 billion euros in cheap loans, the second-largest share in the EU after Poland. It received an initial pre-financing payment of 2.5 billion euros in August.
The loans are to be funnelled to state bodies such as the army, which will then use them to buy equipment. The money will not be paid directly to Romarm or its subsidiaries. Yet Romania’s Defence Ministry said several of these companies will be involved in the program, including Cugir, Sadu, Romarm’s Bucharest plant and Electromecanica. The government said it has signed an industrial cooperation agreement to base future production of pistols, automatic weapons and ammunition at the Cugir and Sadu plants.
Large-scale private investment is also expected to arrive. In August 2025, Romania’s government signed a 535-million-euro deal with Rheinmetall, Europe’s largest arms maker based in Dusseldorf, to build a new gunpowder plant at Victoria, on the same site as Pirochim.
The danger, say critics, is that the billions now being promised to rebuild Romania’s state-owned defence industry will be swallowed up in badly managed investments and do little improve the decrepit factories, some of which are struggling to even keep the lights on and the doors locked.