Global players flock to Kyiv summit as domestic production booms
By Guillaume Ptak
The Washington Times
October 15, 2024
It’s a silver lining around a very dark cloud: As Ukraine struggles to hold off a massive Russian invasion force, the country’s defense industry has experienced an unprecedented boom that is starting to be felt on the front lines.
Kicked into high gear by Russia’s February 2022 invasion, the expansion and modernization of Ukraine’s defense industry are proceeding apace, even though production falls short of the seemingly bottomless demand.
President Volodymyr Zelenskyy has tirelessly lobbied the U.S. and its allies for more military arms and equipment as Kyiv confronts a bigger and better-armed foe, but he is not shy about recognizing the achievements of Ukraine’s booming defense factories. “While years ago the Ukrainian defense industry unfortunately looked helpless, today it is an industry that is on its way to leadership, at least in Europe,” Mr. Zelenskyy said. “Today, these are industries that Ukraine can once again be rightfully proud of.”
The president made his remarks this month on the opening day of the second International Defense Industries Forum in Kyiv, which brought together representatives of more than 280 defense companies and associations from some 30 countries.
The joint ventures and contracts signed or announced throughout the two-day event underscored the exponential growth of Ukraine’s defense industry since early 2022 and its alluring potential for foreign investors and Western arms manufacturers.
On the first day of the summit, Virginia-based defense contractor AeroVironment signed an agreement with an unidentified Ukrainian company to start producing its Switchblade 600 kamikaze drone in Ukraine. The French-German holding company KNDS, among the world’s top 40 defense manufacturers last year, announced it would open a branch in Kyiv to “carry out maintenance, repair and overhaul work” on several of its systems used by the Ukrainian army.
The branch will service the German Leopard 1 and 2 tanks, the French-made CAESAR self-propelled howitzer, and other weapons and systems.
Ukraine’s factories have massively increased their output to address the chronic ammunition shortages that have, at times, crippled the army’s ability to resist the Russian onslaught in the south and the east along a more than 600-mile front line. Mr. Zelenskyy said Ukraine has produced 25 times more artillery and mortar shells in the first half of 2024 than in all of 2022. Ukraine’s defense industry is reportedly able to produce 4 million drones a year.
Those numbers constitute a staggering expansion of Ukraine’s arms manufacturing capabilities.
Breaking away
Although the war kicked Kyiv’s military buildup into high gear, the boom dates back to the aftermath of Moscow’s 2014 annexation of Crimea and the beginning of the war in Donbas.
Ukrainian industries were responsible for 17% of the Soviet Union’s defense output and a quarter of its scientific research. Ukrainian companies were deeply embedded within the Russian production chain, and the defense sectors of the two countries remained interdependent until 2014.
At the time of Ukraine’s independence, the country’s defense industry comprised 1,840 companies and research centers and employed nearly 2.7 million people. Last year, those numbers had shrunk to 500 companies and 300,000 people. As the Soviet military withdrew, it left behind warehouses filled with armored vehicles, aircraft, artillery pieces and ammunition — as well as 1,700 nuclear warheads. NATO estimates that 2.5 million tons of ammunition and more than 7 million small arms and mortars remained on Ukrainian territory after the collapse of the Soviet Union.
The refurbishing and selling of those gigantic stocks allowed Ukrainian defense companies to net significant profits and made Ukraine the world’s fourth-largest arms exporter by 2012.
With the beginning of the conflict in Donbas in 2014, the defense sector shifted its focus to domestic needs. Kyiv sought to eliminate the Soviet military legacy and modernize its armed forces by relying increasingly on Western-made weapons. Consequently, Ukraine’s share of the world arms market fell from 2.7% from 2009 to 2014 to 1.3% from 2014 to 2018. As Russian tanks and armored vehicles rumbled across Ukraine’s border on Feb. 24, 2022, the Ukrainian army found itself massively outgunned. What the Ukrainians lacked in numbers and sheer firepower, they made up for in ingenuity.
Ukrainian manufacturers pioneered the massive use of commercially available drones for reconnaissance and artillery targeting, and myriad defense technology companies were created almost overnight to address the army’s needs.
Ukraine does not have a single surface vessel in its navy, but military analysts say Kyiv’s fast-paced development of naval drones allowed it to destroy or damage a quarter of the Russian Black Sea fleet. Russian commanders were forced to relocate the fleet away from Crimea and lift the naval blockade on Ukraine’s Black Sea ports.
In one sign of outside confidence in Ukraine’s defense industrial base, the Netherlands announced during the Kyiv conference that it planned to invest some $440 million in advanced drone production inside Ukraine.
Showcase
The Ukrainian government has sought to showcase the ingenuity of its homegrown defense companies by holding a Defense Tech Valley event in Kyiv immediately after the International Defense Industries Forum.
Organizers said the purpose of this smaller summit was to “demonstrate Ukraine’s position as a global hub for defense innovations and a fertile ground for international investment” and provide Ukrainian and foreign investors with a “step-by-step guide to investing successfully” in the country’s defense technologies industry.
Kyiv says its domestic defense companies now can produce about $20 billion worth of weapons and equipment. With its army unable to contract all of it, Ukraine has sought to attract foreign investors by launching several initiatives. Among them is the Brave1 accelerator program, which brings together defense startups, investors and government stakeholders and has overseen the organization of the Defense Tech Valley.
The Ukrainian government says Western military aid, especially from the U.S., is vital to its war effort, but restrictions on weapons types and uses against Russian forces have frustrated Mr. Zelenskyy and his commanders. The government in Kyiv has repeatedly signaled its intention to reform and expand its defense capabilities to avoid being hamstrung by the delays and fear of escalation of its allies.
In a December interview with The Associated Press, Mr. Zelenskyy said the prospect of a militarily self-sufficient Ukraine “terrifies Russia” and that “this is the way out.” Accordingly, as the country’s factories increase production, the Ukrainian Defense Ministry has increasingly adopted domestically produced weapons, systems and equipment for its forces to use in the field.
Ukraine’s first deputy minister of defense, Lt. Gen. Ivan Havryliuk, said in a statement this month that the ministry has adopted and codified the use of more than 600 domestically produced weapons and equipment over the first nine months of the year. Those innovations include motor vehicles, military drones, ammunition, electronic warfare systems, communication equipment, engineering means and ground robotic platforms. “We are presently engaged in several significant projects aimed at enhancing our firepower. I am refraining from elaboration as this needs quiet,” Gen. Havryliuk said on Oct. 5.
Despite the vast increases in production, analysts say Ukraine cannot fight this war alone.
The Institute for the Study of War, a Washington-based think tank, wrote in an analysis this month that Ukraine “still requires considerable Western assistance for the next several years to defend against Russian aggression and liberate strategically vital areas that Russian forces currently occupy.”
Guillaume Ptak’s foreign correspondence from Ukraine is often highlighted in the Threat Status daily newsletter produced by The Washington Times. Guillaume Ptak is a French freelance journalist who has been covering Ukraine since 2019, and has lived in Kyiv since last
September. He is a correspondent for French national newspaper Les Echos, who has also worked with Deutsche Welle, Le Monde Diplomatique and France Télévisions