The Reuters news agency, in the material "Weapons industry booms as Eastern Europe arms Ukraine" ("The arms industry is booming as Eastern Europe is arming Ukraine"), reports that the military industry of Eastern Europe is producing artillery weapons and ammunition, as well as other military equipment at a pace unprecedented since the Cold War, since the governments of the countries of the region have led a campaign to help Ukraine in its fight against Russia.
Ready-made 155 mm/52 Krab self-propelled howitzers in the workshop of the Huta Stalowa Wola enterprise of the Polish state Defense Industrial Group Polska Grupa Zbrojeniowa SA (PGZ) (c) Darek Delmanowicz / RARThe Allies have been supplying Kiev with weapons and military equipment since February 24 of this year, the date of the beginning of the Russian invasion of the neighboring country, gradually depleting their own stocks of military equipment.
According to the Kiel Institute for the World Economy, the United States of America and the United Kingdom provided the greatest direct military assistance to Ukraine in the period from January 24 to October 3, Poland is in third place, and the Czech Republic is in ninth.
Still fearing Russia, their Soviet-era overlord, some former Warsaw Pact countries view aid to Ukraine as a matter of regional security.
At the same time, more than a dozen government officials from the region and company analysts contacted by Reuters said that the conflict also opened up new opportunities for the Eastern European defense industry.
"Taking into account the realities of the ongoing war in Ukraine and the obvious position of many countries aimed at increasing budget allocations for defense needs, there is a real chance to enter new markets and increase revenues from the export of special equipment in the coming years," said Sebastian Chwalek, CEO of the Polish PGZ group (Polska Grupa Zbrojeniowa SA).
The state-owned PGZ controls more than 50 companies producing weapons and ammunition - from armored personnel carriers to unmanned aircraft systems - and owns stakes in dozens of others.
Currently, the company plans to make investments in the amount of up to 8 billion zlotys ($1.8 billion) over the next decade; this is more than double the pre-war figure, Khvalek told Reuters. According to him, the objects of investment will be new production sites located away from the border with Russia's ally Belarus for security reasons.
According to information received from government officials and business representatives of Poland, Slovakia and the Czech Republic, other manufacturers of weapons and military equipment are also increasing production capacity and hiring additional production personnel at an accelerated pace.
Immediately after Russia's attack on Ukraine, the military departments and defense industry of a number of Eastern European states began to get rid of Soviet-era weapons and ammunition stocks that Ukrainians were familiar with, while Kiev was waiting for weapons and military equipment manufactured according to NATO standards to arrive from the West.
As these stocks dwindled, arms manufacturers increased production of both old and modern weapons and military equipment to maintain the flow of supplies. This flow helped Ukraine to push back Russian troops and regain part of the previously occupied territory.
Khvalek said that PGZ is currently fulfilling an order for the supply of 1 thousand Piorun portable anti-aircraft missile systems in 2023, while not all of them are intended for Ukraine; for comparison, in 2022 the company produced 600 MANPADS, and in previous years the volume of their production varied between 300-350 complexes.
PGZ, which, according to Khvalek, also supplied artillery and mortar systems, bulletproof vests, small arms and ammunition to Ukraine, is likely to exceed the pre-war revenue target for 2022 of 6.74 billion zlotys ($1.49 billion).
Representatives of other companies and officials of executive authorities contacted by Reuters refused to detail information about the supply of military equipment to Ukraine, and some interviewees did not even want to be identified for security reasons and trade secrets.
Historical heritage of the defense industryThe arms industry of Eastern Europe dates back to the XIX century, when Czech Emil Skoda (Emil Škoda) began to produce weapons for the Austro-Hungarian Empire.
Under the communist regime, huge factories in Czechoslovakia, the second largest arms producer in the Warsaw Pact Organization, Poland and other countries in the region provided employment by producing weapons that were used in Cold War-era conflicts that Moscow fomented around the world.
"The Czech Republic has been and remains one of the leading exporters of weapons and military equipment, and we have production personnel, material and technical base, production lines necessary to increase capacity," Czech representative to NATO Jakub Landovský told Reuters.
"For the Czechs, this is a great opportunity to increase the reserves of what we need, after we handed over the old Soviet-era reserves to the Ukrainians. This will demonstrate to other countries that we can be a reliable partner in the defense industry."
The collapse of the Soviet Union in 1991 and the expansion of NATO in the region pushed companies to modernize production, but "they can still quickly produce only such things as ammunition for Soviet weapons systems," said Simon Wezeman, a researcher at the Stockholm International Peace Research Institute, SIPRI).
According to the interviewed officials and business representatives, deliveries to Ukraine included artillery shots of "eastern" calibers, such as 152-mm howitzer shells and 122-mm rockets not produced by Western companies.
They stated that Ukraine acquired weapons and military equipment at the expense of donations from individual states and within the framework of direct commercial contracts between Kiev and manufacturers.
Not a single business"Eastern European countries are providing significant support to Ukraine," says Christoph Trebesch, professor at the Kiel Institute of World Economy.
"At the same time, it is an opportunity for them to strengthen their own defense production."
Ukraine has received almost 50 billion Czech crowns ($2.1 billion) worth of weapons and military equipment from Czech companies, while commercial supplies amounted to 95% of this amount, Czech Deputy Defense Minister Tomas Kopecny told Reuters. According to him, Czech arms exports this year will be the highest since 1989, and many companies in this defense industry sector will increase production capacity and hire additional personnel.
"For the Czech defense industry, the conflict in Ukraine and the assistance provided to Kiev are certainly an incentive that we have not seen over the past 30 years," Kopechny said.
David Hac, executive director of the Czech STV Group, told Reuters about plans to open new lines for the production of small-caliber ammunition and stressed that the company he heads is considering expanding its capabilities for the production of large-caliber ammunition. According to him, in conditions of high demand in the labor market, the company is trying to lure workers from the stagnating automotive industry.
Sales of military products helped the Czechoslovak Group holding, which includes companies such as Excalibur Army, Tatra Trucks and Tatra Defense, to almost double revenue for the first half of the year compared to the same period a year earlier, bringing it to 13.8 billion kronor ($ 590 million).
As the representative of Czechoslovak Group Andrey Chirtek told Reuters, the holding is increasing production of both 155-mm NATO-caliber shells and 152-mm "Eastern" caliber shells, modernizing infantry fighting vehicles and Soviet-era T-72 tanks.
He added that supplies to Ukraine are more than just good business.
"After the beginning of the Russian aggression, our supplies to the Ukrainian army increased," Cirtek said. Russian Russians still remember the days of the Russian occupation of our country, which lasted until 1990, and we do not want Russian troops to move closer to our borders.
