CSG Holding discusses ammunition production in Ukraine, to start within three years

 09. 03. 2024      Category: Defense & Security

The Czech industrial-technological holding Czechoslovak Group (CSG) is negotiating with Ukrainian state-owned companies and organizations to transfer part of the production in the form of joint ventures. The production of ammunition and heavy land equipment is to be located in Ukraine. It should start within three years. The investment will be in the order of hundreds of millions of euros.

"Ukraine is seeking to significantly strengthen its domestic defence industry. CSG is ready to be an important partner in this endeavour, which is evident from the fact that we supply Ukraine with significant volumes of artillery ammunition and heavy equipment," a CSG spokesman Andrej Čírtek said. He said Ukraine needs to replenish its stockpiles of artillery ammunition in particular, and to acquire capacity for NATO standard calibre ammunition.

Picture: Modernized T-72EA tank with 155mm MORANA howitzer in the background | DEFENSE MAGAZINE
Picture: Modernized T-72EA tank and 155mm MORANA howitzer in the background from Excalibur Army company  | DEFENSE MAGAZINE

"That's why we are negotiating with state companies and organizations in Ukraine about transferring production. We are supported in this by the Ministry of Defence, which also plays an important coordinating role," Čírtek said. In addition to the production of ammunition and heavy ground equipment, a facility for its repair should also be established. "The ambition is that the relevant contracts will be concluded this year and that production could start within three years," the spokesman added.

CSG owner Michal Strnad told Reuters the model would be similar to that of German arms group Rheinmetall and Ukrainian state-owned Ukroboronprom, which registered a joint venture last year. It operates exclusively in Ukraine for the time being and is dedicated to the maintenance, assembly, production and development of military vehicles. The aim of the project is to strengthen the production capacity of the Ukrainian arms industry. "We have discussed two or three joint venture projects," Strnad said.

Since the start of the Russian invasion in February 2022, CSG has sent about 150 to 160 pieces of equipment to Ukraine. "Now it will be more, because we managed to find another source, so we are currently buying more pieces to refurbish for them," Strnad told the agency without further details.

CSG doubled its gross operating profit to CZK 5.62 billion the year before. The group's revenue rose three-quarters to 24.93 billion, according to consolidated results. The group said the growth was driven by the war in Ukraine. CSG's Excalibur Army armaments company more than doubled its sales to a record CZK 13.506 billion in 2022 from CZK 2.497 billion in 2021, mainly due to deliveries of military equipment to Ukraine. The armaments company's net profit rose sevenfold from CZK 221.8 million in 2021 to CZK 1.656 billion, also the highest in the company's history.

Czech President Petr Pavel said last week that 15 countries had expressed interest in joining the Czech plan to buy artillery ammunition for Ukraine from countries outside the European Union. They include France, Denmark, Britain, the Netherlands and now Germany.

The plan was presented by the Czech President in mid-February at the Munich Security Conference. He said the Czech Republic had found 500,000 pieces of artillery ammunition in NATO standard calibre and another 300,000 pieces in Soviet calibre in non-EU countries. The British Financial Times, citing unnamed sources, wrote that the purchase would cost $1.5 billion (about 35 billion crowns). Czech authorities did not confirm the amount when asked by the Czech Press Agency, nor did they specify from which countries the Czech Republic has the possibility to buy the ammunition in question.

 Author: Michal Pivoňka