Funding for defence programs, improvement of production and maintenance capacity, problems concerning the acquisition of land for investments in Poland, including those discussed by politicians during the gathering of the Subcommittee on Polish Defence Industry. The discussion included 5 key Polish arms companies.
On Thursday 20 March during the session of the Permanent Subcommittee on Polish Defence manufacture and method modernization of the Armed Forces of the Republic of Poland, parliamentarians debated the future of Huta Stalowa Wola SA, Desamet metallic Plant SA, H. Cegielski-Poznań SA, Production of Communication Equipment PZL-Kalisz SA and Military Automotive Plant SA. The Ministry of State Activities, the Ministry of National Defence and the Polish Armed Forces Group presented information on plans for the improvement of these 5 leading defence companies, information on the expansion of production capacity in the armored and ammunition domain, and on the planned polonization of production of Korean K2 Black Panther tanks was requested by a group of Law and Justice politicians.
As Mr Rafał Weber (PiS) referred, they wanted clarification in respective very circumstantial areas. – In 2023 the application was submitted by the PGZ and HSW for PLN 600 million from the Capital Investment Fund. The first tranche of specified support was paid to the Huta Stalowa Wola Group in 2023, and these funds were used, among another things, to buy back the civilian part, which was disposed of by HSW in 2011, and to adapt it very rapidly for military production,” commented erstwhile Deputy Minister of Infrastructure and added that in 2023 HSW applied for another 600 million but there was no information about its fate. – Has it been decided whether these funds will be granted? – the parliamentarian asked.
As regards the second company, which was the subject of the parliamentary debate, the Desamet of fresh Dęba, Members were curious in how the government and the PGZ authorities wanted to address the problem of the deficiency of land needed by the company to build fresh production halls. – At the end of the year 2023, Desamet signed a contract for about 280,000 rounds of 155 mm ammunition worth about PLN 10 billion. transportation must be made in due time. Without expanding the production capacity of Desamet, without the construction of fresh halls after erstwhile acquisition of fresh sites for these investments, this will not be possible. What Ministry of National Defence or Ministry of State Acts has an thought about this? – asked the associate representing the applicants of the debate.
The president of the Parliamentary Committee on National Defence Andrzej Grzyb (PSL-TD) explained that although PiS parliamentarians requested information only about HSW and Desamet, the members of the SCON decided that during the gathering of the Permanent Subcommittee for the defence manufacture and the method modernization of the Armed Forces of the Republic of Poland, plans for Polishization of production of Korean K2 tanks will besides be discussed, with the participation of the Wielkopolska defence companies: Military Motorization Plants SA, the Production of Communication Equipment PZL-Kalisz SA and H. Cegielski-Poznań SA.
New circumstances
Representing the Treasury, i.e. the main shareholder of state-owned armed companies, Deputy Minister of State Assets Konrad Golota (Nowa Lewica) stressed that investment processes carried out in the Polish Armed Forces Group request to be viewed from 2 sides – in terms of improvement of production and maintenance capacity. The politician pointed out that in order to velocity up both, the government is working on the applicable legislation, including the deregulation package, and the funds needed for investment will be sourced from various sources, including European ones. "Our country is applying for about EUR 20 billion, or about PLN 100 billion, from the European Union's 150 billion loans. These credits are delayed by 10 years, and will be repaid until 2070 – he calculated and added that the current geopolitical situation makes the issues of financing investment in defence in the European Union change practically from week to week, which has a direct impact on programmes already implemented in Poland. They can number on funds not yet available six months ago.
A good example of this is Huta Stalowa Wola. As he explained President of the Polish Armed Forces Group Krzysztof Trofiniak, in 2023 HSW appeared to the government Capital Investment Fund with a pro-development business plan of over PLN 1.3 billion, which is to let 8 times increase in its production and service capacity. The essential money was to go to the HSW Group companies (e.g. Autosan) in 2 tranches – PLN 600 and PLN 642 million plus about PLN 130 million of own funds.
Unfortunately, while the first tranche, for PLN 600 million, was awarded inactive in 2023 and was immediately used, among others, for the redemption of the civilian part of HSW sold in 2011 to the Chinese investor (terrestrials and machines) and for the acquisition of parts of specialized equipment for the production of Badgers and their towers, the second tranche was not paid due to the fact that HSW had to re-prepared the business plan. president Trofiniak stressed that he has very strong grounds in the estimated future orders from the Polish Army. – The production possible of towers is estimated at 1350–1360 pieces, chassis Badgers for 1014 pieces, a heavy BWP for about 700 copies – calculated at the SCON gathering of Trofiniak.
Desamet targets a large caliber
The second defence company from the PGZ-et, which was debated by parliamentarians and which generated comparatively the most discussion, was Desamet of fresh Dęba. The company that presently handles Manufacture of ammunition, wants to increase its capabilities in 155 mm caliber missiles respective times a year to 150 1000 units. As president Trofiniak explained to make this possible, the company needs a large injection of cash. The investment programme, which is expected to enter the Capital Investment Fund by the end of March 2025, was valued at almost PLN 1.4 billion. It includes, among others, the acquisition of essential land and the acquisition of production lines.
As Deputy Minister Konrad Golota explained in the course of further discussion, although Desamet needs about 40 hectares of land (attached to a forest company), only about 10 hectares will be utilized to build halls and warehouses. The problem – what Members have asked in the discussion – is how efficiently and rapidly the PGZ and Desamet can buy the essential areas and get approval to build them. “In a fewer weeks it should be in the Sejm to amend the provisions of the peculiar Act, allowing for defence investments in forest areas,” said Konrad Golota.
Waiting for K2
The last group of companies to be debated during the Thursday gathering of the subcommittee, were Wielkopolska companies – Military Motorization Plant SA, PZL-Kalisz SA and H. Cegielski-Poznań SA. WZMot president Elżbieta Warzynkiewicz explained that the mentioned entities want to make an armored domain and produce for the Polish Army Polish-controlled tanks K2 Black Panther. As she added, unfortunately, as the agreement with the Korean device maker Hyundai Rotem has not yet been signed, the Military Automotive Plant is focusing on the improvement of the service and repair capabilities of the American Abrams tanks.
