152 mm artillery ammunition. — MIL.IN.UA/FLICKR
PRAGUE/WARSAU – Eastern Europe’s defense industry is churning out arms, artillery shells and other military supplies at a rate not seen since the Cold War, while governments in the region scramble to help Ukraine in its fight against Russia help.
Allies have been supplying Kyiv with arms and military equipment since Russia invaded its neighbor on February 24, exhausting their own supplies in the process.
The United States and Britain pledged the most direct military aid to Ukraine between January 24 and October 3, a tracker from the Kiel Institute for the World Economy shows, with Poland in third and the Czech Republic in ninth.
Some former Warsaw Pact countries are still suspicious of Russia, their Soviet-era master, and see aid to Ukraine as a regional security issue.
But nearly a dozen government and business officials and analysts speaking to Reuters said the conflict also presents new opportunities for the region’s arms industry.
“Taking into account the realities of the ongoing war in Ukraine and the visible stance of many countries aiming at higher spending in the area of defense budgets, there is a real opportunity to open up new markets and increase export earnings in the coming years,” he said Sebastian Chwalek, Managing Director of the Polish PGZ.
The state-owned PGZ controls more than 50 companies that manufacture weapons and ammunition – from armored vehicles to unmanned aerial systems – and has stakes in dozens more.
It now plans to invest up to 8 billion zlotys ($1.8 billion) over the next decade, more than double its pre-war target, Mr 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 increasing production capacities and are urgently looking for workers, companies and government officials from Poland, Slovakia and the Czech Republic.
Immediately after Russia’s attack, some Eastern European military and manufacturers began emptying their stores of Soviet-era weapons and ammunition familiar to Ukrainians while Kyiv waited for standard NATO equipment from the West.
As these supplies have dwindled, weapon manufacturers have ramped up production of both older and modern gear to keep supplies going. The flow of arms has helped Ukraine push back Russian forces and retake parts of the territory.
Mr Chwalek said PGZ will now produce 1,000 Piorun Manpad portable air defense systems in 2023 – not all for Ukraine – compared to 600 in 2022 and 300 to 350 in previous years.
The company, which it says has also supplied artillery and mortar systems, howitzers, bulletproof vests, small arms and ammunition to Ukraine, is expected to surpass a pre-war sales target of PLN 6.74 billion for 2022.
Companies and officials who spoke to Reuters declined to give specific details about military supplies to Ukraine and some did not want to be identified, citing security and trade sensitivities.
Eastern Europe’s armaments industry dates back to the 19th century, when Czech Emil Skoda began making weapons for the Austro-Hungarian Empire.
Under Communism, huge factories in Czechoslovakia, the Warsaw Pact’s second-biggest arms producer, Poland, and elsewhere in the region kept people busy making weapons for the Cold War conflicts Moscow was fomenting around the world.
“The Czech Republic has been one of the powerhouses of arms exporters and we have the manpower, material base and production lines needed to increase capacity,” its ambassador to NATO, Jakub Landovsky, told Reuters.
“This is a great opportunity for the Czechs to increase our supply after giving the old Soviet-era stocks to the Ukrainians. This can show other countries that we can be a reliable partner in the defense industry.” The collapse of the Soviet Union in 1991 and NATO’s expansion into the region forced companies to modernize, but “they can still quickly make things like ammunition that fit the Soviet systems,” said Siemon Wezeman, a researcher at the Stockholm International Peace Research Institute.
Deliveries to Ukraine included “Eastern” caliber artillery shells, such as 152mm howitzer shells and 122mm rockets, which were not manufactured by Western companies, officials and companies said.
They said Ukraine acquired arms and equipment through donations from governments and direct trade deals between Kyiv and the manufacturers.
NOT JUST BUSINESS
“The Eastern European countries support Ukraine significantly,” said Christoph Trebesch, Professor at the Kiel Institute. “At the same time, it’s an opportunity for them to build their military manufacturing industry.”
Ukraine has received nearly 50 billion kroner ($2.1 billion) in arms and equipment from Czech companies, about 95% of which were commercial supplies, Czech Deputy Defense Minister Tomas Kopecny told Reuters. Czech arms exports this year will be the highest since 1989, he said, as many companies in the industry create jobs and capacity.
“For the Czech defense industry, the conflict in Ukraine and the aid it has provided is clearly a boost that we haven’t seen in the last 30 years,” said Mr. Kopecny.
David Hac, managing director of the Czech STV Group, outlined plans to Reuters to add new production lines for small caliber ammunition and said it was considering expanding its large caliber capabilities. In a tight job market, the company is trying to poach workers from a flagging auto industry, he said.
Defense sales helped the Czechoslovak group, which includes companies such as Excalibur Army, Tatra Trucks and Tatra Defense, nearly double its first-half revenue from a year earlier to 13.8 billion kroner.
The company is increasing production of both 155mm NATO and 152mm Eastern caliber shells and is overhauling Soviet-era infantry fighting vehicles and T-72 tanks, spokesman Andrei Cirtek told Reuters.
He said supplying Ukraine is more than just a good deal.
“After the start of Russian aggression, our supplies for the Ukrainian army multiplied,” Cirtek said.
“The majority of the Czech population still remembers the times of Russian occupation of our country before 1990 and we don’t want Russian troops closer to our borders.” – Reuters