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Poland will enhance its manufacturing of howitzer ammunition fivefold because the nation seeks to cut back dependence on imported weaponry and shield itself from the Russian menace within the east, in keeping with state belongings minister Jakub Jaworowski.
In an interview with the Monetary Occasions, Jaworowski stated state-controlled defence group PGZ would “within the coming days” obtain 2.4bn zlotys ($663mn) in authorities funds to extend the output of large-calibre ammunition and deal with one in every of Poland’s most urgent defence shortfalls.
The funding goals to extend the group’s annual output of 155mm artillery shells, that are used for Nato-standard howitzers, and 120mm shells for tanks.
Russia’s battle in neighbouring Ukraine confirmed that “155mm ammunition performs a key position on the fashionable battlefield and is required in giant numbers”, Jaworowski stated.
“Our aim within the brief time period is to considerably enhance home manufacturing of this sort of armament, in addition to to develop into impartial of international provides and construct a sustainable base for nationwide autonomy. That is one in every of our priorities.”
PGZ at the moment produces about 30,000 large-calibre rounds per yr and the funding is anticipated to extend that determine greater than fivefold to between 150,000 and 180,000 yearly inside three years, with manufacturing saved inside Poland to keep away from reliance on imported parts.
Poland is proportionally the most important defence spender in Nato, allocating the equal of 4.7 per cent of its GDP to the army on this yr’s finances. Nonetheless, a lot of this expenditure has to date been directed in the direction of procurement from overseas, primarily the US and South Korea.
Prime Minister Donald Tusk’s authorities is now shifting focus to home manufacturing, consistent with broader European efforts to cut back dependence on the US and different international army suppliers.
Whereas some European defence firms, together with Germany’s Rheinmetall, are already significantly increasing their ammunition output, Poland continues to face acute shortages and trade delays have drawn political scrutiny.
In April, Krzysztof Trofiniak abruptly resigned as PGZ chair after solely a yr, a transfer reportedly linked to issues over stalled manufacturing. His resignation coincided with a stark warning from Dariusz Łukowski, head of Poland’s nationwide safety bureau, that current ammunition reserves would solely maintain one to 2 weeks of fight within the occasion of a Russian assault.
The PGZ funding follows the Polish parliament’s approval in November of €700mn in public funding to bolster the nation’s ammunition manufacturing capabilities.
Jaworowski stated that Grupa Azoty, Poland’s largest chemical group, had additionally requested state cash to increase into the ammunition sector by manufacturing key inputs comparable to propellants and nitrocellulose for explosives. Niewiadów, one other home defence firm, can be looking for authorities funding to make 155mm shells.
Jaworowski, who oversees a portfolio of about 110 state enterprises, stated Azoty was among the many firms in urgent need of restructuring.
He attributed its monetary difficulties partially to what he described as poor and politically-motivated funding selections made underneath the previous Legislation and Justice (PiS) authorities, ousted in late 2023.
In line with audits performed since Tusk’s pro-EU coalition took energy, state-owned firms had gathered mixed losses of as much as €5bn due to mismanagement and fraud underneath PiS, Jaworowski stated. His ministry has filed round 100 notices to the general public prosecutor looking for legal investigations.
In Azoty’s case, Jaworowski stated the group’s survival relied on securing approval from its lenders for a restructuring plan, which might embody growing the state’s shareholding from 33 per cent to as a lot as 49 per cent. Nonetheless, he stated talks had been delayed by the European Funding Financial institution, one in every of Azoty’s collectors.
“I used to be anticipating them [the EIB] to be the primary to leap in on the chance and to suggest a restructuring plan,” Jaworowski stated. “My shock was that they don’t seem to be as keen as I’d anticipate them to be, judging by their mandate as a improvement financial institution and given how supportive a few of the absolutely business banks have been.”
However the EIB stated that it was “actively engaged in efforts to place Grupa Azoty on a sustainable footing”. The Luxembourg-based financial institution added it had made “constructive proposals” however declined to elaborate, citing the corporate’s listed standing and ongoing negotiations.
