Poland to choose two partners to build ammunition factories

By Barbara Erling

WARSAW (Reuters) -Poland is set to name two joint venture partners to build ammunition production facilities, the CEO of the Polish Armaments Group, or PGZ, said, as the Ukraine war drives demand for artillery shells. 

Warsaw believes a partner from abroad will help Poland to produce ammunition from start to finish domestically, reducing reliance on external suppliers.

Adam Leszkiewicz, CEO of state-owned PGZ, told Reuters the company is finalising agreements for a projectile plant and a separate propellant facility, with announcements expected in the coming weeks.

In March, Deputy Defence Minister Cezary Tomczyk told Reuters that companies from France, Germany, South Korea and Turkey are competing to establish a joint venture with Poland to manufacture ammunition.

Leszkiewicz declined to disclose the origin of the company or say whether it is European.

He said a priority is to own the technology and licences for the ammunition the JV produces to ensure it can fully utilise the licence, including being able to modify and sell the products and ultimately export them.

The ammunition factories will include the manufacture of the 155 mm artillery shells, particularly in demand since Russia's full-scale invasion of Ukraine.

Leading a European push to deter Russian aggression, Poland allocated 4.7% of GDP in 2025 to defence, making it NATO's biggest defence spender relative to its economy. 

It has also earmarked 2.4 billion zlotys ($659.25 million)for PGZ to boost ammunition production and ensure sufficient supplies in the case of an attack.

Leszkiewicz said PGZ's exports so far make up about 20% of revenue, but ultimately, it aims to increase this figure.

"It would be great if at least one-third of our revenue came from exports. From the perspective of the group's future, it's also crucial that we learn to sell some of our products abroad, gradually reducing our dependence on the domestic strategic client," he said.

($1 = 3.6405 zlotys)

(Reporting by Barbara Erling; editing by Barbara Lewis)