25 Foreign Arms Makers Have Production in Ukraine – Shmyhal

Defense Minister Denys Shmyhal said 25 foreign arms manufacturers have established production facilities in Ukraine.

Shmyhal, recounting his comments to Politico in a Friday Telegram update, said the cooperations come in different forms, including the so-called Danish Model, in which Kyiv’s allies help fund weapons suited for Ukraine’s military needs.

“Each manufacturer works in close dialogue with the Ukrainian government. We offer partners various models of cooperation, including the ‘Danish model,’ Build with Ukraine / Build in Ukraine,” Shmyhal wrote.

“The priority is for the main part of the company’s products to meet the needs of the Ukrainian army.”

Shmyhal, without naming any of the manufacturers involved, said it is an ongoing effort to attract foreign arms makers to set up shop in Ukraine.

He hinted at a new initiative called “Defence City” to incentivize foreign arms investments via tax breaks and simplified customs procedures, among other things.

“This is a special regime for the development of Ukraine’s defense industry. It provides for tax breaks, simplification of customs procedures, a mechanism for relocating production to safer regions, expansion of state financial support and opportunities for export and integration into global chains,” he wrote.

Who’s making weapons in Ukraine?

At present, there are a handful of major arms makers known to have established production in Ukraine.

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Earlier this month, French arms maker Thales registered a joint venture with Ukraine’s state arms conglomerate UkrOboronProm to work on air defense, radar systems, electronic warfare and tactical communications, according to Reuters.

German arms maker Rhinemetall said at the end of 2024 it had begun production of its Lynx infantry fighting vehicle (IFV), and recently announced plans to build an ammunition plant inside Ukraine.

In 2022, reports suggested that Turkish drone manufacturer Baykar planned to set up production in Kyiv, with Turkey granting Ukraine the license to produce the drones in June 2023.

Weapon testing in Ukraine

In July, Kyiv’s Ministry of Digital Transformation launched a new initiative to attract foreign weapons and innovation by welcoming arms testing on Ukraine’s testing grounds.

While the project emphasizes weapon testing, its ultimate goal is likely to entice foreign arms manufacturers to bring in foreign capital and technology – and potentially set up shop inside the country.

By connecting foreign manufacturers with local firms, the goal is for Ukraine to help produce certain weapon components – similar to a recent initiative by a Ukrainian drone maker to launch a servicing hub for foreign drones, also supported by Brave1’s networking efforts.

As Shmyhal pointed out in his latest update, part of the goal of the proposed “Defence City” is also to help Ukraine’s manufacturers “[integrate] into global chains.”