Thursday, January 20, 2011

Poland Largest Arms Producers To Export EU, Asia and Africa

Poland is one of the largest arms producers amongst the EU associate countries of CEE. The Polish defence industry currently employs some 63,000 workers who represent about 2.5 percent of total employment in the industrial sector, and it produces approximately 1.3 percent of total goods and services. Since 1990, 38 companies, in which the state holds a controlling proportion of shares, have been considered the core of the Polish defence industry. In July 1999 the Polish Parliament passed two bills for the privatisation and restructuring of its defence industry: the first bill foresaw the government maintaining a controlling interest in seven of the plants, and the second tied larger foreign purchases to offset deals promoting domestic defence industry. While advantageous for the defence industry, the new offset law is rather off-putting for suppliers to the Polish Government, and was held responsible for ‘killing’ a radar contract.


The major shake-up following this reform will involve the sale of factories, the writing off of large debts, thousands of redundancies and the injection of foreign capital. Three companies, Cenrex,Cenzin and Bumar will remain fully state-owned, the state will retain 100 percent of shares in one company and more than 50 percent in another eight, while private capital will be allowed to have a controlling interest in the remaining 22 enterprises. The revenues from privatisation will be allocated to cover restructuring costs and additional purchases for the Polish armed forces. There are few private defence companies in Poland as yet. In recent times, the Polish Treasury has succeeded in privatising PZL Warszawa-Okecie, while the privatisation of PZL Swidnik has been postponed.


Poland has been a traditional developer of military equipment for land, air and naval forces. The 1998/99 PIPROK catalogue lists eight companies specialising in the production or repair/maintenance of aircraft, including PZL Warszawa-Okecie SA, 50 WSK51 PZL Mielec SA and WSK PZL Swidnik SA52 Two companies are listed as concentrating on ship building: the naval shipyard Stocznia Marynarki Wojennej in Gdynia and the northern Stocznia Polnocna SA in Gdansk. The catalogues lists 18 companies specialising in armour and vehicle production, including:

- Huta Stalowa Wola (HSW),which currently employs 14,000 people and produces a wide range of products, including building machines, as well as tracked and wheeled combat vehicles, howitzers, and armoured personnel carriers. The Polish Army is to receive new 98mm mortars from HSW, together with 122mm rockets for multiplelaunch rockets systems and ammunition for 122mm self-propelled howitzers. In September 2000 HSW and Italy’s OTOBreda signed an agreement for the development of a new light turret intended for use on a Polish Army IFV, and HSW has also concluded agreements with the German Rheinmetall DeTec for the licensed production of 35mm guns to be used on the new Polish Loara anti-aircraft system.

 - Zaklady Mechaniczne Bumar – Labedy SA mechanical works, producer of a range of armoured equipment, including the PT-91 ‘Hard’ main battle tank, a locally built upgraded variant of the Russian-designed T-72M1.

Twenty-four companies are listed as providing electronic, opto-electronic and communication equipment. In an interview with Polska Zbrojna in September 2001, Slawomir Kulakowski, chairman of the Polish Chamber ofManufacturers for National Defence, highlighted the importance of the electronic and communication sectors for the Polish defence industry: “We should concentrate on the domains in which we can export successfully.We could specialise in computer optics (PCO) and radar systems (given our two leading research and production centres, Radwar and the Industrial Institute of Telecommuncations).


We are doing well in telecommunications systems (for example, Radmor has transmitted the manufacturing technology for the 3501 radio station to the Czech Republic and Lithuania, and it has an opportunity to launch the manufacturing of these products in Slovenia,Romania and India)”. Indeed PCO, the Industrial Centre for Optics, is preparing to sign a contract to modernise Indian T-72 tanks by equipping them with night vision cameras and fire control systems.

Worth $100 million, this will be one of the biggest Polish arms contracts in recent years. In April 2000 the Czech Republic and Poland formed a joint commission to ease co-operation in the defence sector; both countries see room for co-operation in the existing modernisation of infantry fighting vehicles and T-72 main battle tanks. The commission will also promote further co-operation between the armed forces of the two countries which both became members of NATO in 1999, and promote the interests of the two in introducing new members to NATO.

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