The “Ukrainian Council of Arms Manufacturers,” an industry association of Ukrainian manufacturers, addressed the Ministry of Defense with a corresponding appeal, the text of which is available to Ukrinform.
The arms manufacturers note that as of mid-August, one of the key problems for the Ukrainian defense industry remains the insufficient level of contracting. According to market participants’ estimates, up to 25% of existing production capacity is currently under contract. Manufacturers of various types of weapons and military equipment are left without a sufficient volume of orders.
For the industry, a prolonged period without sufficient domestic orders poses the risk of losing engineers and production teams, scaling back production lines, reducing working capital, and limiting opportunities to invest in improving and scaling up Ukrainian developments.
“In recent years, the Ukrainian defense industry has significantly expanded its capabilities in response to government requests and the needs of the military. It is important to prevent the loss of these capabilities due to interruptions in contracting,” the association emphasizes.
At the same time, disruptions in contracting are not just a problem for companies. Due to the long production cycle for weapons, delays in signing contracts in August pose a risk to supply volumes in the fall and winter.
Funding remains another challenge. Assistance from international partners is critically important for Ukraine; however, certain financial instruments have their own conditions and limitations and cannot fully replace domestic resources for procuring the full range of equipment required by the Defense Forces.
In this regard, the Ukrainian Arms Manufacturers Council calls on the Ministry of Defense to:
- ensure the continuity of contracting with Ukrainian manufacturers, regardless of personnel, structural, or procedural changes in the defense procurement system;
- prevent any gaps between current and future orders, taking into account the length of the production cycle and the need for advance procurement of components;
- ensure sufficient and predictable financial resources for the procurement of weapons and military equipment needed by the Defense Forces, particularly those items that cannot be fully funded through available partnership programs.
The industry association also calls for providing manufacturers with a clear order outlook that will allow them to plan production, retain their teams, procure components, and continue developing Ukrainian technologies.
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It is also proposed to maintain an ongoing dialogue with the industry regarding the current level of contracting, production capabilities, and risks to future deliveries.
“What matters to the market is the result: the military must receive the necessary weapons and military equipment without interruption and on time, and Ukrainian manufacturers must receive a sufficient volume of orders to meet these needs today and maintain their production capacity for tomorrow,” the association emphasized.
As reported by Ukrinform, the Defense Procurement Agency has denied reports of a “halt in contracting.”
Photo: Defense Procurement Agency