Ukraine’s defense industry can ramp up production six times in 2024

Author

Kira Ivanova

Ukrainian defense companies ramped up production three times in 2023 and are set to produce six times more in 2024. Oleksandr Kamyshin, Ukrainian Minister for Strategic Industries, presented the forecast at a press conference on the results of the work of the Ministry for Strategic Industries and Ukrainian Defense Industry JSC in 2023.

"We have increased our production three times this year as compared to the previous year. Our capabilities are ready to increase six times next year, and we are moving towards further increasing them. The defense industry becomes a driver in restoring the economy," said Kamyshin.

He added that the defense industry can add almost a third, or 1.5%, to Ukraine’s predicted 2024 GDP growth of 4.9%.

80% of Ukrainian defense companies are privately owned

Ukraine's defense industry currently includes around 500 companies, employing more than 300,000 people, the minister said. Among them, about 100 companies are government-owned, while the majority (nearly 400) are privately owned.

The production volume of private companies is already nearly the same as that of government-owned ones, Kamyshin underscored. Meanwhile, just a couple of years ago, the government almost held a monopoly in the sector.

Ukraine can produce more than a million FPV drones

The minister had to reiterate that the plan to produce a million Ukrainian FPV drones announced by the president is feasible.

"We are capable of producing 1+ million FPV drones, as well as 10,000 medium-range attack drones and more than 1,000 drones with a range exceeding 1,000 km," Kamyshin asserted.

It is the FPV drones that will become effective game changers and turn the tide of war, the minister emphasizes.

According to him, only one domestic factory already produces 45,000 FPV drones a month, "and this is only one facility."

The state budget allocates ₴40 billion (more than $1.05 billion) for the purchase of drones, and Ukrainian-produced drones already account for "the lion's share of purchases". He thanked the Ministry of Digital Transformation and the State Service of Special Communications and Information Protection of Ukraine, who promptly amended their regulations and allowed both government-owned and private manufacturers to engage in the production.

"We already have state-owned plants in which contracts for drone production exceed contracts for other products historically characteristic of these industries," he added.

He also said online trading platforms already offer more Ukrainian-produced drones than DJI Mavics.

Ukraine has increased the production of mortar shells 42 times

This year, Ukraine has increased the production of:

mortar shells 42 times;
artillery shells 2.8 times, including 125-mm and 73-mm munitions;
VOG-17 and VOG-25 grenades for automatic grenade launchers;
small arms ammunition;
ammunition for UAVs;
armored personnel carriers five times in November 2023 as compared to the spring;
anti-armor missiles 2 times;
armored cars 3.4 times.

The Ukrainian Defense Industry JSC also produced six Bohdana self-propelled howitzers in November 2023.

Why Ukraine hasn’t started mass production of its own 155-mm shells

The problem is the production of powder charges for 155-mm artillery rounds according to NATO standards.

"We have experimental samples, but in this caliber, we depend on our partners and the supply of rare powders that Ukraine has never produced. We look forward to being supported by our partners as regards powder. We are ready to start the production of shells, and we have already mastered some of the elements," Kamyshin added.

He hopes that the government will make the necessary decisions to liberalize the explosive production market so that Ukrainian private companies can engage in it.

There are also "baseline arrangements" about the joint production of 155-mm munitions with two manufacturers from the United States. However, it would take at least two years to launch joint production.

What the FrankenSAM is and where it works

Oleksandr Kamyshin mentioned the FrankenSAM project, which employs U.S. defense technology to refurbish Soviet-era air defense systems so that they can use modern munitions.

The first items of this equipment have already been taken to the frontline. FrankenSAMs are working in the combat area and defending critical infrastructure in cities.

The project portfolio includes five projects. These are Soviet-made air defense systems that already use medium- and long-range Western missiles. Several state-owned and private companies are working on the project.

"We took our Soviet systems and, together with Western partners, integrated them with Western missiles and Western launchers. The result was a new hybrid, which made it possible to have our own effective air defense not in five years but now," Oleksandr Kamyshin explains.

The minister is sure that all strategic partners of Ukraine will study its defense sector for many years after the victory.

The domestic defense industry can receive more funding in 2024

Oleksandr Kamyshin is sure that defense expenditures in the state budget will be redistributed to increase the share of Ukrainian manufacturers of military products.

"Today, our capabilities are about twice as large as the available funding. We are working with the Ministry of Defense, the Ministry of Finance, the Prime Minister, and the President to find additional funding for this sector. We manufacture a large part of the range that we need. Next, the main issues are the systematic increase in production, rare components, and adequate financing," the minister explained.

Later, he reminded that out of approximately $50 billion in defense expenditures planned in the 2024 state budget, only $5 billion is for the purchase of Ukrainian products.

The building of the Baykar factory

The Turkish company Baykar is currently actively constructing a factory, which is to be put into operation in less than a year and a half, the minister answered after being asked by .

"For some reason, the factory took a long time to start, but now it is being actively built. Actually, I have been watching the progress of the work for two months. This fall, the claimed term was 1.5 years. The company began to build a plant in Ukraine with a full production cycle independently, without partners. It's a good and right case."

Was the Novocherkask landing ship destroyed by a Ukrainian missile?

The minister refused to answer whether the missile that destroyed the Russian Novocherkask landing ship in the port of Feodosia was made in Ukraine.

"We are always silent about it. The missile program is the most classified and important program in Ukraine. I will never talk about it. But believe me, my team and I spent enough working hours and nights at training grounds so that we had something to engage targets in Russian territory," Kamyshin emphasized.