Ukraine needs any edge it can get to repel Russia from its territory. One emerging bright spot is its small but fast-growing defence industry, which the government is flooding with money in hopes that a surge of homemade weapons and ammunition can help turn the tide. The effort ramped up sharply over the past year as the US and Europe strained to deliver weapons and other aid to Ukraine, which is up against a much bigger Russian military backed by a thriving domestic defence industry.<\/p>\n
The Ukrainian government budgeted nearly USD 1.4 billion in 2024 to buy and develop weapons at home \u2013 20 times more than before Russia\u2019s full-scale invasion. And in another major shift, a huge portion of weapons are now being bought from privately owned factories. They are sprouting up across the country and rapidly taking over an industry that has been dominated by state-owned companies. A privately owned mortar factory that launched in western Ukraine last year is making roughly 20,000 shells a month.<\/p>\n
\u201cI feel that we are bringing our country closer to victory,\u201d said Anatolli Kuzmin, the factory\u2019s 64-year-old owner, who used to make farm equipment and fled his home in southern Ukraine after Russia invaded in 2022. Yet like many aspects of Ukraine\u2019s war apparatus, its defence sector has been constrained by a lack of money and manpower \u2013 and, according to executives and generals, too much government red tape. A more robust private sector could help root out inefficiencies and enable factories to churn out weapons and ammunition even faster. The stakes couldn\u2019t be higher.<\/p>\n
Russia controls nearly a quarter of Ukraine and has gained momentum along the 1,000 kilometre front line by showing a willingness to expend large numbers of troops to make even the smallest of advances. Ukrainian troops regularly find themselves outmanned and outgunned, and this has contributed to falling morale. \u201cYou need a mortar not in three years, you need it now, preferably yesterday,\u201d said Taras Chmut, director of the Come Back Alive Foundation, an organization that has raised more than USD 260 million over the past decade to equip Ukrainian troops with machine guns, armoured vehicles and more.<\/p>\n
Kuzmin, the owner of the mortar factory, fled the southern city of Melitopol in 2022 after Russia invaded and seized his factory that mostly made spare parts for farm equipment. He had begun developing a prototype for mortar shells shortly after Russia invaded Ukraine in 2014, when it illegally annexed the Crimean Peninsula. Kuzmin took over a sprawling warehouse in western Ukraine last winter. His long-term goals include boosting production to 100,000 shells per month and developing engines and explosives for drones.<\/p>\n
He is just one of many entrepreneurs transforming Ukraine\u2019s weapons industry, which was dominated by state-owned enterprises after the break-up of the Soviet Union. Today, about 80 per cent of the defence industry is in private hands \u2013 a mirror image of where things stood a year ago and a stark contrast with Russia\u2019s state-controlled defense industry. Each newly made projectile is wrapped in craft paper and carefully packed into wooden crates to be shipped to Romania or Bulgaria, where they are loaded with explosives. Several weeks later, they\u2019re shipped back and sent to the front.<\/p>\n
\u201cOur dream is to establish a plant for explosives,\u201d said Kuzmin, who is seeking a partner to make that happen.<\/p>\n
Ukraine\u2019s surge in military spending has occurred against a backdrop of USD 60 billion in US aid being held up by Congress and with European countries struggling to deliver enough ammunition. As impressive as Ukraine\u2019s defence sector transformation has been, the country stands no chance of defeating Russia without massive support from the West, said Trevor Taylor, a research fellow at the Royal United Services Institute, a London-based think tank. \u201cUkraine is not capable of producing all the munitions that it needs for this fight,\u201d Taylor said.<\/p>\n
\u201cThe hold up of USD 60 billion of American help is really proving to be a significant hindrance.\u201d Russia is also pumping more money into its defence industry, whose growth has helped buffer its economy from the full brunt of Western sanctions. The country\u2019s defence minister, Sergei Shoigu, recently boasted of huge increases in the manufacture of tanks, drones and ammunition. \u201cThe entire country has risen and is working for our victory,\u201d he said. Compared with last year, Ukraine\u2019s output of mortar shells is about 40 times higher and its production of ammunition for artillery has nearly tripled, said Oleksandr Kamyshin, Ukraine\u2019s minister of strategic industries.<\/p>\n
There has also been a boom in drone startups, with the government committing roughly USD 1 billion on the technology \u2013 on top of its defence budget. \u201cWe now produce in a month what we used to produce in a year,\u201d said Vladislav Belbas, the director general of Ukrainian Armor, which makes a wide array of military vehicles. For the Ukrainian army\u2019s 28th brigade, which is fighting near Bakhmut, delays in foreign weapon supplies haven\u2019t yet posed any problems for troops \u201cbecause we are able to cover our need from our own domestic production,\u201d said Major Artem Kholodkevych.<\/p>\n
Still, domestic weapons factories face a range of challenges \u2013 from keeping up with changing needs of battlefield commanders, to their own vulnerability to long-range Russian missile strikes. But perhaps the greatest immediate hindrance is a lack of manpower. Yaroslav Dzera, who manages one of Ukrainian Armor\u2019s factories, said he struggles to recruit and keep qualified workers, not least because many of them have been mobilized to fight.<\/p>\n
Weapons companies say another roadblock to growth is bureaucracy. The government has tried to become more efficient since the war began, including by making its process for awarding contracts more transparent. But officials say the country has a long way to go. Shortly before he was replaced by President Volodymyr Zelenskyy, Ukraine\u2019s former top general, Valerii Zaluzhnyi, highlighted the problem in an essay he wrote for CNN, saying Ukraine\u2019s defense sector remained \u201chamstrung\u201d by too many regulations and a lack of competition.<\/p>\n
In spite of the challenges, one success story has been Ukraine\u2019s drone industry. Ukrainian-made sea drones have proven to be an effective weapon against the Russian fleet in the Black Sea. There are around 200 companies in Ukraine now focused on drones and output has soared \u2013 with 50 times more deliveries in December compared with a year earlier, according to Mykhailo Fedorov, the country\u2019s minister of digital transformation.<\/p>\n
Russia\u2019s war in Ukraine is not a standoff over whose got better drones or missiles, said Serhii Pashynskyi, head of the National Association of Ukrainian Defense Industries trade group. \u201cWe have a war of only two resources with Russia \u2013 manpower and money,\u201d he said. \u201cAnd if we learn to use these two basic resources, we will win. If not, we will have big problems.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Ukraine needs any edge it can get to repel Russia from its territory. One emerging bright spot is its small\u2026<\/p>\n","protected":false},"author":28,"featured_media":34833,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[186],"tags":[2486,2721,8306,11380,11637,4713,7506,1603,5545,2991,265,3553,11638,11636],"class_list":["post-34832","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world","tag-aid","tag-black-sea","tag-crimean-peninsula","tag-defense-spending","tag-domestic-weapons-industry","tag-drones","tag-frontlines","tag-funds","tag-missiles","tag-private-sector","tag-russia-ukraine-war","tag-state-owned-enterprises","tag-ukrainian-armed-forces","tag-weapons-industry"],"reading_time":"6 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/34832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/comments?post=34832"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/34832\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media\/34833"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media?parent=34832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/categories?post=34832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/tags?post=34832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}