CSG strategic move: A deep dive into expansion plans and foreign ventures

 08. 04. 2024      Category: Defense & Security

Czechoslovak Group (CSG), led by entrepreneur Michal Strnad, is embarking on an ambitious expansion strategy that encompasses not only plans to relocate part of the production to Ukraine but also a significant acquisition in the United States. These initiatives reflect CSG's proactive approach to international collaboration and investment in the global defense industry landscape.

Partnership with Ukraine

CSG's spokesperson, Andrej Čírtek, emphasized the company's readiness to support Ukraine's defense industry, citing substantial past deliveries of artillery ammunition and heavy equipment. The collaboration aims to address Ukraine's need for replenishing artillery ammunition stocks and acquiring NATO-standard munition capacities.

Picture: T-72EA tank for Ukraine | DEFENSE MAGAZINE
Picture: Modernized T-72EA tank for Ukraine | DEFENSE MAGAZINE

With the backing of the Czech Ministry of Defense, negotiations are progressing towards transferring production to Ukraine, including the manufacturing of ammunition and heavy ground machinery, as well as establishing facilities for repairs.

Picture: MSM Group (part of CSG) includes several manufacturers of modern medium-caliber and large-caliber ammunition. | DEFENSE MAGAZINE
Picture: MSM Group (part of CSG) includes several manufacturers of modern medium-caliber and large-caliber ammunition. | DEFENSE MAGAZINE

Strategic Vision

Michal Strnad envisions a model similar to the partnership between German armaments conglomerate Rheinmetall and Ukrainian state-owned enterprise Ukroboronprom. This collaboration, currently operational solely within Ukraine, focuses on maintenance, assembly, production, and development of military vehicles, aimed at bolstering Ukrainian defense industry manufacturing capabilities.

Operational Impact

Since the onset of the Russian invasion in February 2022, CSG has dispatched approximately 150 to 160 units of equipment to Ukraine, with plans for increased deployments. This surge is facilitated by new procurement channels, reflecting CSG's commitment to supporting Ukraine's defense efforts amid geopolitical challenges.

Financial Performance

CSG's financial results reflect the impact of its engagements, with a doubling of gross operating profit and a significant revenue surge attributed partly to activities in Ukraine. Notably, subsidiary Excalibur Army experienced exponential growth in revenue and net profit, driven by increased military equipment deliveries to Ukraine.

Czechoslovak Group (CSG) has achieved an all-time record profit for 2022. CSG's sales rose 73 percent year-on-year to CZK 25 billion and EBITDA, including the 100 percent result of Italy's Fiocchi Munizioni (Fiocchi), even rose to CZK 7.4 billion. At the same time, in 2022 CSG made its largest acquisition to date: It bought a 70 percent stake in the Fiocchi Group, a major global player in small caliber ammunition.

Picture: Fiocchi Group is a manufacturer of small-caliber ammunition | DEFENSE MAGAZINE
Picture: Fiocchi Group is a manufacturer of small-caliber ammunition | DEFENSE MAGAZINE

CSG has performed well in all of the industries in which it operates, with the majority of its businesses achieving highly positive earnings. For example, the TATRA TRUCKS automotive company, in which CSG has a 65 percent stake and 35 percent is held by PROMET GROUP, increased year-on-year sales from CZK 5.31 billion to CZK 7.46 billion and EBITDA from CZK 385 million to CZK 501 million. Revenues of the group of companies around parent DAKO-CZ, a manufacturer of braking systems for rail vehicles from Třemošnice, rose from CZK 1.57 billion to CZK 2.21 billion and EBITDA from CZK 385 million to CZK 544 million.

Picture: Wheeled armoured vehicle TITUS on Tatra 8x8 chassis in the service of the 13th Artillery Regiment | DEFENSE MAGAZINE
Picture: Wheeled armoured vehicle TITUS on Tatra 6x6 chassis in the service of the 13th Artillery Regiment (Czech Army) | DEFENSE MAGAZINE

At the same time, in 2022, CSG made its largest acquisition to date: the purchase of a 70% stake in the Fiocchi Group, one of the world’s largest manufacturers of small calibre ammunition. It produces ammunition in a total of five locations and three countries (Italy, UK, USA). However, the acquisition has a relatively low impact on CSG’s 2022 results, as it was only settled in November and only a small part of last year’s Fiocchi results is consolidated into CSG’s holding results.

Picture: Recovery and removal vehicle TREVA-30 on Tatra Force 8x8 chassis | DEFENSE MAGAZINE
Picture: Recovery and removal vehicle TREVA-30 on Tatra Force 8x8 chassis | DEFENSE MAGAZINE

International Collaboration:

Former Chief of the General Staff of the Czech Army and current President Petr Pavel, revealed interest from fifteen countries in participating in the Czech plan to procure artillery ammunition for Ukraine outside the European Union. This initiative, presented by the Czech President at the Munich Security Conference, underscores international solidarity in supporting Ukraine's defense capabilities.

Expansion Strategy

Czechoslovak Group (CSG) has embarked on an ambitious expansion strategy aimed at strengthening its presence in the global defense industry while diversifying its operations across multiple continents. The key pillars of CSG's expansion strategy include:

  1. International Collaborations: CSG recognizes the importance of forging strategic partnerships and collaborations with international entities to enhance its capabilities and market reach. The company's engagement with Ukrainian state-owned firms to explore joint ventures for the production of ammunition and heavy ground equipment exemplifies its commitment to fostering international cooperation in the defense sector.

  2. Geographic Diversification: CSG's expansion strategy extends beyond its traditional markets in Europe to encompass regions such as the United States and Ukraine. By diversifying its geographical footprint, CSG aims to tap into new growth opportunities, access larger markets, and mitigate risks associated with over-reliance on any single market or region.

  3. Acquisition and Investment: CSG's acquisition of Fiocchi Munizioni, a leading Italian manufacturer of ammunition, underscores its commitment to growth through strategic investments. This landmark acquisition not only expands CSG's product portfolio but also provides access to new markets and manufacturing capabilities, particularly in the United States.

  4. Product Diversification: CSG's expansion strategy includes diversifying its product offerings to cater to a broader range of customer needs and market segments. By expanding beyond traditional defense equipment to include ammunition, CSG enhances its value proposition and strengthens its position as a comprehensive solutions provider in the defense industry.

  5. Innovation and Technology: CSG places a strong emphasis on innovation and technology as drivers of growth and competitiveness. The company invests in research and development to develop cutting-edge solutions, improve manufacturing processes, and enhance product performance, thereby staying ahead of market trends and meeting evolving customer requirements.

  6. Market Adaptation: CSG's expansion strategy is guided by a keen understanding of market dynamics and customer preferences. The company adapts its business model and product offerings to align with market demands, regulatory requirements, and industry standards, ensuring its relevance and competitiveness in an ever-changing global landscape.

Overall, CSG's expansion strategy reflects its proactive approach to growth, characterized by international collaboration, strategic investments, product diversification, and a relentless focus on innovation and customer satisfaction. By leveraging its strengths and seizing opportunities in emerging markets, CSG aims to solidify its position as a global leader in the defense industry.

Record-breaking Investment

The acquisition of Fiocchi Munizioni by Czechoslovak Group (CSG) represents a monumental milestone in the company's history and a significant development in the global defense industry. Fiocchi Munizioni, a renowned Italian manufacturer of ammunition, was acquired by CSG with a purchase exceeding ten billion Czech crowns. This strategic move not only solidifies CSG's position as a key player in the defense sector but also marks the largest investment in the history of the company.

The acquisition of Fiocchi Munizioni aligns with CSG's broader expansion strategy, which seeks to diversify its product portfolio and strengthen its presence in international markets. Fiocchi's reputation for producing high-quality ammunition for civilian and military applications complements CSG's existing capabilities, allowing the company to offer a comprehensive range of products to armed forces, law enforcement agencies, and civilian customers worldwide.

Moreover, the acquisition of Fiocchi Munizioni opens new avenues for CSG to expand its operations beyond Europe. With Fiocchi's established presence in the United States, where it has two manufacturing facilities, CSG gains access to one of the largest defense markets globally. This strategic foothold in the US market positions CSG to capitalize on opportunities for growth and collaboration with American defense contractors and government agencies.

Picture: Fiocchi presentation stand | DEFENSE MAGAZINE
Picture: Fiocchi presentation stand at SHOT Show 2024 | DEFENSE MAGAZINE

The integration of Fiocchi Munizioni into the CSG portfolio also underscores the company's commitment to innovation and excellence in manufacturing. By leveraging Fiocchi's expertise and resources, CSG aims to enhance its production capabilities, streamline operations, and deliver superior products and services to its customers worldwide.

Overall, the acquisition of Fiocchi Munizioni represents a significant step forward for Czechoslovak Group, enabling the company to expand its global footprint, diversify its product offerings, and strengthen its position as a leading player in the defense industry. Through strategic investments and partnerships, CSG continues to demonstrate its commitment to driving innovation, supporting international security efforts, and contributing to the advancement of the global defense sector.


Czechoslovak Group's strategic initiatives signify a paradigm shift in the global defense industry landscape. Through collaborations with Ukraine and acquisitions such as Fiocchi Munizioni, CSG not only reinforces its position as a key player in the defense sector but also exemplifies the Czech Republic's commitment to international security partnerships. As geopolitical tensions persist, CSG's endeavors underscore the vital role of private enterprises in bolstering defense capabilities and fostering global stability.

 Author: Michal Fencl