JANUARY 29, 2026 — In a major step to modernize the U.S. munitions supply chain and enhance warfighter lethality, the Department of the Army is awarding a lease to Hanwha Defense USA for a landmark enhanced use lease, or EUL, to build and operate a new munitions facility at Pine Bluff Arsenal, Arkansas.
Through its EUL program, the Army is strategically leasing underutilized property to the defense company Hanwha. This partnership will bring the manufacturing of essential ingredients for explosives and propellants to the United States, a critical step in strengthening the nation’s defense organic industrial base. This move directly enhances the performance, safety, and lifespan of crucial munitions, including 155mm artillery shells.
Army leaders described the effort as a foundational investment that will shape the future of U.S. munitions production. Although the agreement is pending final lease negotiations, the selection marks a transformational moment for the organic industrial base.
“Enhanced use leasing opens the door to innovative agreements that directly benefit the Army and warfighting priorities” said Jordan Gillis, Assistant Secretary of the Army for Installations, Energy and Environment. “This is only the beginning. The Army is pursuing a new generation of agreements that will strengthen our installations and communities across the board.”
The EUL program allows the Army to lease underutilized property to private partners, with the option to reinvest proceeds into critical infrastructure. This innovative approach provides lasting value to both the Army and the surrounding community.
“This partnership with Hanwha is a model that the Army will use to further strengthen and build a modern commercial and organic industrial base,” said Assistant Secretary of the Army for Acquisition, Logistics and Technology Brent G. Ingraham. “It will be something truly extraordinary for the Army and for our national defense that will bring in advanced capabilities and improved lethality to the Warfighter.”
Arkansas’ congressional leaders praised the announcement as a victory for both the state’s economy and national security.
“I’m proud to have worked with Secretary Hegseth and our entire delegation to secure this important investment which will mean more jobs in Pine Bluff and more tools for our men and women in uniform,” said Sen. Tom Cotton. “This is a great development for the economic future of central Arkansas and the future of our nation’s defense.”
The tools Cotton mentioned are essential for ensuring Soldiers have a decisive edge on any future battlefield. This investment directly supports Army readiness and modernization priorities by providing the advanced energetics needed to create more lethal and effective munitions, directly impacting the capabilities of the warfighter.
Hanwha Defense USA plans to invest approximately $1.3 billion in the facility, a move expected to create around 200 skilled jobs in the region.
Senator John Boozman called Pine Bluff Arsenal a “vital national security asset,” expressing confidence that the skilled Arkansas workforce is prepared to supply the critical materials needed for munitions that protect U.S. military personnel.
Integrating a skilled local workforce with advanced manufacturing processes creates a powerful partnership, ensuring the organic industrial base can meet the demands of modern conflict and deliver reliable munitions to the front lines.
Congressman Bruce Westerman echoed the praise, welcoming Hanwha to the district as a move that will “create greater opportunities for the Pine Bluff community but also bolster our national defense capabilities.”
Army officials said negotiations will conclude in the coming months, with the momentum behind the initiative signaling a new, innovative chapter for the service’s organic industrial base modernization efforts.
By U.S. Army Public Affairs