11/24/2022 – 1:44 pm
By Michael Kahn and Anna Koper and Robert Muller
PRAGUE/WARSAW (Reuters) – Eastern Europe’s arms industry is churning out weapons, artillery shells and other military supplies at a pace not seen since the Cold War, as governments across the region spearhead efforts to help Ukraine in its fight against Russia.
Allies have been supplying Kiev with arms and military equipment since Russia invaded the neighboring country in February.
The United States and the United Kingdom committed the most direct military aid to Ukraine between Jan. 24 and Oct. 3, a tracker from the Kiel Institute for the World Economy shows, with Poland in third place and the Czech Republic in ninth.
“Taking into account the realities of the ongoing war in Ukraine and the visible attitude of many countries towards increasing spending in the field of defense budgets, there is a real chance to enter new markets and increase export earnings in the coming years,” said Sebastian Chwalek, chief executive of Polish state-owned PGZ.
The PGZ controls more than 50 companies that make weapons and munitions — from armored transporters to unmanned aerial systems — and has stakes in dozens more.
The company now plans to invest up to PLN 8 billion ($1.8 billion) over the next decade, more than double its pre-war target, Chwalek told Reuters. This includes new facilities located farther from the border with Russia’s ally Belarus for security reasons, he said.
Other manufacturers are also ramping up production capacity and rushing to hire workers, companies and government officials in Poland, Slovakia and the Czech Republic said.
Chwalek said PGZ will now produce 1,000 Piorun portable air defense systems in 2023 – not all for Ukraine – compared with 600 in 2022 and 300 to 350 in previous years.
The company, which he said has also supplied Ukraine with artillery and mortar systems, howitzers, body armor, small arms and ammunition, is likely to exceed its pre-war 2022 revenue target of 6.74 billion zlotys.
Companies and officials declined to provide specific details about military supplies to Ukraine, and some declined to be named, citing security concerns and trade concerns.
The collapse of the Soviet Union in 1991 and NATO expansion in the region prompted companies to modernize, but “they can still quickly produce things like munitions that adapt to Soviet systems,” said Siemon Wezeman, a researcher at the Stockholm International Peace Research Institute. .
Deliveries to Ukraine included artillery shells of “Eastern” calibers, such as 152mm howitzer shells and 122mm rockets not produced by Western companies, officials and companies said.
They said Ukraine acquired weapons and equipment through government donations and direct commercial contracts between Kiev and manufacturers.
MORE THAN GOOD BUSINESS
Ukraine has received nearly 50 billion kronor ($2.1 billion) worth of weapons and equipment from Czech companies, about 95% of which were commercial deliveries, Czech Deputy Defense Minister Tomas Kopecny said. Czech arms exports this year will be the highest since 1989, he said, with many companies in the sector adding jobs and capacity.
“For the Czech defense industry, the conflict in Ukraine and the assistance it provides is clearly a boost we haven’t seen in the last 30 years,” said Kopecny.
Defense sales helped the Czechoslovak Group, which owns companies including Excalibur Army, Tatra Trucks and Tatra Defense, nearly double its first-half revenues from a year earlier to 13.8 billion kronor.
The company is increasing production of NATO-standard 155mm and 152mm caliber shells and retrofitting Soviet-era infantry fighting vehicles and T-72 tanks, spokesman Andrej Cirtek told Reuters.
He said that supplying Ukraine is more than just good business. “The majority of the Czech population still remembers the times of Russian occupation of our country before 1990 and we don’t want to have Russian troops close to our borders.”