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PM Shmyhal: Ukraine to boost defense manufacturing, allocate 50% of arms budget to local producers

Ukrainian PM Shmyhal announced plans to establish multiple defense manufacturing facilities in Ukraine, emphasizing that 50% of the budget for arms procurement will support local producers.

byYuri Zoria

04/03/2024

3 minute read

Ukrainian Prime Minister Denys Shmyhal. Photo: kmu.gov.ua

PM Shmyhal: Ukraine to boost defense manufacturing, allocate 50% of arms budget to local producers

Ukrainian Prime Minister Denys Shmyhal has revealed ambitious plans to construct numerous defense manufacturing plants in the country, aiming to bolster Ukraine’s defense industry. In a recent announcement, Shmyhal emphasized that 50% of the budget for arms procurement will be allocated to support domestic producers. This initiative aligns with Ukraine’s broader strategy to enhance its defense capabilities and reduce dependency on foreign arms imports.

Shmyhal promised to build dozens of defense plants in Ukraine in the future. He made the announcement at a press conference on 4 March, reporting on his four years in office. According to him, the security and defense sector is key for the Cabinet of Ministers, Liga says.

He noted that Ukraine is strengthening its own production, and the domestic market is capable of producing more than a million drones, for which about UAH 40 billion (more than $1 billion) has been allocated.

Shmyhal said that 50% of the funds for the purchase of weapons are planned to be spent in Ukraine, with a focus on drones and electronic warfare systems.

The Prime Minister reminded of the work with the leaders of the global arms market, with five contracts for joint ventures already signed.

“In the future, there will be dozens of joint ventures. This will speed up our logistics, strengthen the security component, and ensure technology transfer,” the Prime Minister summarized.

Artillery shells and localized production are priorities

Earlier, Deputy Minister for Strategic Industries Serhiy Boiev stated that Ukraine’s priority in the coming years is to domestically produce 155mm artillery shells.

He mentioned that Ukraine has already signed agreements with the United States, the United Kingdom, the Czech Republic, Germany, and Türkiye regarding technology transfer, repair and maintenance, licensed and general production of armored vehicles, ammunition, small arms, and artillery.

In January, the CEO of the leading German arms manufacturer Rheinmetall AG, Armin Papperger, said his company would build a new ammunition factory to supply the German and Ukrainian armed forces. At the same time, Rheinmetall was set to initiate the production of its first armored vehicles in Ukraine in 2024, according to the CEO.

Meanwhile, German defense company FFG was reportedly constructing a repair center in western Ukraine. This facility aims to repair various German weapons and military equipment currently used by the Ukrainian Defense Forces.

France has also had plans to change its approach in providing military assistance for Kyiv and enhance weapon production directly within Ukraine, according to the French Ambassador in Ukraine.

Drone challenge

On 19 December 2023, President Zelenskyy promised that Ukraine would produce one million drones in 2024. Kamyshin, the head of the Ministry of Strategic Industries, later clarified that the head of state was referring only to FPV drones. According to him, in December, Ukraine was already producing more than 50,000 FPV drones per month.

Meanwhile, Ukraine produced approximately 200,000 FPV drones in January and February 2024, according to Hanna Hvozdiar, Deputy Minister of Strategic Industries.

Ukraine was ramping up the production of one-way attack “kamikaze” drones to compensate for the lack of artillery shells at the front, the country’s Deputy Defense Minister Gen. Ivan Havryliuk said in December 2023.