Ukrainian Weapons Makers Want to Return to the Global Arms Market. Here’s Why

Being the site of the largest European war since World War II has led to the rapid development of Ukrainians’ home-grown defense industry.

Privately owned factories are sprouting up across the country and taking over what had largely been strictly state-owned companies. Private enterprises are often quicker and nimbler in a landscape where speed is, literally, a matter of life and death. 

The leading private defense manufacturers have a trade organization — the National Association of Defense Industry Enterprises of Ukraine (NAUDI). 

Ukrainian arms manufacturers mostly produce armored vehicles, self-propelled howitzers, unmanned aerial vehicles (UAVs), radars, electronic warfare systems, various shells and mines, as well as surveillance, and guidance and reconnaissance systems. 

This year, according to Forbes, which referenced high-ranking officials in the Defense Department, the enterprises are able to produce products worth about $15 billion – five times more than in 2023, and twice as much as was purchased.

*That said, they only have one customer – the Ukrainian government. Since the beginning of the introduction of martial law, Kyiv has suspended any exports.*

"This is quite a big problem for private enterprises,” Maksym Polyvyany, executive director of NAUDI, tells KyivPost. 

“For example, an enterprise can produce products worth Hr.170-180 billion hryvnias ($4.25-4.5 billion) per year, while the [cash-strapped] state buys only 50 percent of what is produced for Hr.90 billion ($2.25 billion). Because of this, production is forced to be reduced due to a lack of funds for the payment of wages to employees and taxes. There is stagnation because profit does not allow us to create new types of weapons.”

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https://www.kyivpost.com/post/32118