Headnote
The emergence of a real and direct threat from Russia has been forcing Poland to expand its country's defense potential, and thus also to increase and modernize the Polish armed forces. Allocating approximately 5% of GDP for the country's defense means allocating large funds for the purchase of equipment and weapons. The Polish arms industry, both State and private, must therefore rapidly increase its production capacity and, taking into account the experience from Ukraine, expand its offer with new solutions and new combat systems. The need for rapid development of the entire technological chain of ammunition production is particularly important. A comprehensive strategy for the development of the industry is being developed, and new simplified procedures for new investments in the defense sector are being introduced. Great emphasis is being placed on international cooperation (including with Ukraine) and the use of opportunities that the European Union creates for the defense industries.
L'émergence d'une menace réelle et directe de la part de la Russie oblige la Pologne à élargir son potentiel de défense, ce qui signifie également agrandir et moderniser les forces armées polonaises. Allouer environ 5 % du PIB à la défense du pays signifie allouer des fonds importants aux achats d'équipements et d'armes. L'industrie d'armement polonaise, tant publique que privée, doit donc augmenter rapidement sa capacité de production et, en tenant compte de l'expérience ukrainienne, élargir son offre avec de nouvelles solutions et de nouveaux moyens de combat. La nécessité de développer rapidement l'ensemble de la chaÎne technologique de production de munitions est particulièrement visible. Une stratégie globale de développement industriel est en cours d'élaboration, et de nouvelles procédures simplifiées d'investissement pour les nouveaux entrants dans le secteur de l'armement vont être mises en place. Une grande importance est accordée à la coopération internationale (y compris avec l'Ukraine) et à l'utilisation des opportunités offertes aux industries d'armement par l'Union européenne.
The difficult geopolitical situation around Poland requires an intensification of the process of expanding the country's defense potential, including the technical modernization of the Armed Forces of the Republic of Poland. As a member of the European Union and NATO, Warsaw plays an important role in defending Central and Eastern Europe against potential threats.
The war in Ukraine forced far-reaching changes, both in terms of the amount of modern weapons that the Polish army should have at its disposal, and the requirements placed on the equipment it is equipped with. As a result, the Polish State decided to significantly increase its defense budget to 4.7% of GDP in 2025.
Poland is fully aware that the costs of armed conflicts can be many times higher than the expenditures on preventive security of the State. Therefore, in the long term, investments in the Polish defense industry, including research and development in the field of defense, are considered crucial not only for ensuring the country's security, but also for avoiding escalation and huge losses associated with a possible war.
How can we stimulate economic growth for the benefit of our country's economy by investing in domestic production plants, so that they can meet qualitatively new expectations both in terms of technology and the ability to quickly expand production capacity? Finally, how and from whom to buy military equipment and supplies to ensure the transfer of the latest technologies to the country, and, as a result, the development of the Polish defense industry? - these are some of the many problems that the Polish government is currently facing.
Currently, the core of the Polish arms industry is made up of two main entities: Polska Grupa Zbrojeniowa (PGZ) - a holding company that brings together over 50 companies working for the country's defense, also holding shares in 32 other entities - and Huta Stalowa Wola (HSW), which specializes in the production of self-propelled artillery systems (the 155 mm Krab gun-howitzer and the 120 mm Rak mortar) and the Borsuk infantry fighting vehicle. PGZ's offer includes, among others: world-class radar systems, electronic systems supporting command, communication and fire control, optoelectronics, very short-range (Pilica rocket-artillery systems) and short-range (missile systems known as Mata Narew) air defense systems, Rosomak wheeled armored personnel carriers, military vehicles, a wide range of ammunition, missiles (including for Piorun anti-aircraft systems), explosives, as well as all kinds of firearms and personal equipment for soldiers. Polish shipyards used to build small missile and landing ships for the needs of the entire Warsaw Pact (some of them are still in use in the fleet of the Russian Federation). Recently, minesweepers/mine destroyers have been built there for the Polish Navy, and a series of Miecznk-class frigates are under construction. Recently, for the needs of the planned production of armored equipment, the Czestochowa steelworks, which produces thick sheets suitable for armor, was bought by the Ministry of National Defense (MON). All State-controlled armaments companies (as well as all others) are managed by the Ministry of State Assets.
An important resource for research and development are military academies, with the Military University of Technology at the forefront, as well as about 10 different military technical institutes. Another very important segment of the Polish armaments industry are private companies, which have been supplying the Ministry of National Defense for many years. These include: WB Electronics (observation and reconnaissance systems, command, communication and battlefield management systems, fire control systems, IT systems, cybersecurity), LUBAWA (personal protective equipment for soldiers, hangars and tents, camouflage nets, pneumatic models of military vehicles), TELDAT (automated combat and crisis management systems), TRANSBIT (radio lines and radio stations, servers and workstations, communication desks, modems and modules, software), Hertz System (military GPS receivers, communication systems, military logistics systems, Tempest class computer equipment), AMZ-Kutno (military vehicles), Niewiadow (155 mm ammunition production). The domestic defense industry also includes an industrial and repair base. The production of various unmanned reconnaissance and destruction means, as well as systems to combat them, is developing rapidly. At present, there are about 40 Polish companies, both State-owned and private (WB Electronics, APS and others) that benefit from cooperation with companies in Ukraine and based on constantly flowing experience from the battlefield. This development has been supported by the commitments of the Polish Ministry of National Defense to purchase such weapons on a large scale.
A large part of the aviation plants established during the Warsaw Pact era were taken over and expanded by foreign investors. Thus, large plants producing engines and other systems located in Rzeszów currently belong to Raytheon, the factory that used to produce helicopters in Swidnik under Soviet licenses currently belongs to the Leonardo concern, and the plants in Mielec are owned by Lockheed-Martin and are today an important component in the production of Black Hawk helicopters as well as airplanes and helicopters for the needs of the Polish Air Force.
In the development plans, a special place is occupied by the production of ammunition. In addition to the existing plants, PGZ, based on government aid, plans to build a number of new plants, including those producing the necessary explosives and propellants, such as multi-component gunpowder in order to become independent from the uncertain supply chain from abroad. Private industry has similar plans. Poland's denunciation of the Ottawa Convention on the ban on anti-personnel mines will also result in the need to expand the production potential ofthose mines that were previously produced by Polish plants. There is currently a debate in Poland on the development of systemic solutions that will make it possible to effectively use financial resources from the state budget earmarked for the purchase of military equipment, armaments, the expansion of military infrastructure and support for the defense industry.
An appropriately expanded and technologically strengthened defense industry (including its part remaining in private hands) should be one of the key elements of the Polish security system. In this situation, capital support from government agencies becomes particularly important, as well as directing large - and stable in the long-term perspective - orders for armaments and military equipment to domestic defense companies. Particular emphasis has been placed on the development of anti-aircraft and anti-missile defense, the purchase of modern tanks, helicopters, rocket artillery, aircraft and drones.
The Polish government's support for the defense industry is multidimensional and includes, in addition to purchases, financing the development and modernization of companies in this sector, strengthening its technological independence, and making the necessary legal regulations. Experts emphasize the need for better coordination and interpretation of regulations so that investments in defense become a real development impulse for the economy. In order to improve the coordination of the above projects by the government, a new department was established in the Ministry of Development and Technology. This department is responsible for consolidating external sources of financing, increasing investments, and promoting international cooperation. Projects related to increasing the production capacity of individual enterprises also remain a key factor in development.
The Polish government's offset policy could be of help to the arms industry. According to Polish law, offset is only possible for purchases related to armaments or munitions, and there were and are a lot of such purchases. Unfortunately, this measure is not used to a significant extent and often comes down to obtaining the ability to service-purchased systems.
Intensive work is underway with the participation of the three ministries on the development and implementation of the "Comprehensive Defense Industry Development Strategy". The strategy is to be created by the end of 2025 and will cover both State-owned and private companies. Cooperation with technology companies and private industry should lead to innovative solutions that will find application not only in the field of defense.
The primary source of financing for investments in the defense industry in Poland is the State budget. The Polish government has significantly increased defense spending to support the modernization of the armed forces. In 2025, 4.7% of GDP was allocated for this purpose. Additionally, external sources of financing remain at the industry's disposal, such as EU funds and bank loans.
The Ministry of National Defense declares that at least half of the expenditure on arms purchases will be directed to the Polish industry.
In turn, the key elements of the support provided by the government to the defense industry include:
* The Polish Armed Forces Support Fund, which provides additional sources of financing to support development investments in the arms sector. In order to increase the level of financing, this fund may issue bonds. The Fund's expenditure in 2024 was realized at the level of PLN 35.065 billion.
* The governments decision to shift up to PLN 30 billion from the National Reconstruction Plan (KPO) to defense and the arms industry.
* PGZ co-financing: In the coming years, it is planned to co-finance the Polish Armaments Group (PGZ) with the amount of approximately PLN 7 billion.
* Support for ammunition production: The "Act on financing activities increasing ammunition production capacities" adopted in December 2024 provides for expenditures in the amount of PLN 3 billion. The aim is to increase self-sufficiency in ammunition production.
* Planned construction of a new ammunition factory in close international cooperation to secure the stability of the whole production chain.
* Public procurement for the equipment of the Polish armed forces with priority for domestic producers, Which allows them to maintain continuity of production and development, and long-term contracts with Polish companies that help them plan and invest in development.
* Legislative changes that will enable support for the implementation of programs related to the production of weapons and ammunition and simplify the investments procedures.
In recent years, the Polish armed forces have been enriched with a wide range of Western, modern military equipment. In accordance with the concluded agreements, part of the purchased weapons and military equipment will be manufactured and serviced in Poland.
The high level of expenditure on the purchase of military equipment is an opportunity not only for entities producing complete products, but also for a number of subcontractors. Support from the government and investments in the field of research and development contribute to the increase in the competitiveness of the Polish arms industry.
International cooperation is another important aspect that affects the development of the Polish arms industry. Trade agreements, technology transfer and cooperation with NATO partners provide Poland with access to the most modern military systems and technologies, which strengthens the competitiveness of Polish companies on the global market. Poland actively participates in European consultations on the future of the defense industry. There are plans to intensify international cooperation in order to develop innovative projects and promote Polish research and development centers. Despite promising prospects, the Polish arms industry faces a number of challenges that must be overcome. One of the biggest challenges is competition from international arms giants.
Poland is breaking records in defense spending. lt is therefore extremely important to use high defense spending in a fully rational manner. This means precisely linking deliveries of new weapon systems with the necessary changes in the strategy, organization, and numbers of the Polish army. At the same time, striving to ensure that the largest possible share of orders goes to the Polish defense industry, bringing profits to the economy in the form of new technologies, stabilized employment, and tax revenues. Decisions regarding domestic production and foreign purchases will be made strategically, so that the Polish defense industry not only uses new technologies, but also actively participates in their development and improvement, thus strengthening its competences and competitiveness. To sum up, the Polish arms industry supported by the government has great development potential, driven by government support, strategic investments, and increasing defense spending. However, it also requires systemic changes to become more effective and competitive on the international stage. Moreover, this must happen at a pace and with a scale of financing to which the Polish arms sector has not been accustomed before.
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