Ukraine bets on private sector and localization of defense-production, says DM Shmyhal
Ukraine's key advantage is that it relies on the private sector and strives for complete localization in weapons production.
This was stated by Defense Minister Denys Shmyhal at a specialized event, Brave1 Components, in Kyiv, according to Ukrinform.
“Our key advantage is that we rely on the private sector rather than state-owned enterprises. Politicians are poor managers for modern innovative design. It is better to entrust these processes to professionals, and even better to private manufacturers,” said the head of the Ministry of Defense.
Shmyhal outlined the state's strategic priorities in the development of the Ukrainian defense industry.
According to him, it is time to ensure the complete localization of defense components and strategically important production in general, as well as the maximum involvement of the private sector, which, according to the minister, is capable of ensuring the competitiveness, flexibility, and innovation of the Ukrainian defense industry.
Shmyhal emphasized that Ukraine is not only developing its production capacity in the field of innovative technologies, but also striving for complete localization in the creation of weapons - from the smallest components to finished products. This is especially true for modern high-tech products: microchips, controllers, cameras, batteries, motors, antennas, propellers, and other elements without which it is impossible to create a modern drone or robotic system.
Currently, there are more than 200 component manufacturers operating in Ukraine, and the government sees this as the basis for stable supply to the front lines, as well as a boost for economic growth—new jobs have been created, taxes are being paid, and the development of engineering specialties has received a powerful impetus.
The head of the defense department also said that state-owned enterprises of the Ministry of Defense are undergoing a process of corporatization and are being transferred to the management of professional managers. This will reduce bureaucracy and increase their efficiency.
At the same time, private manufacturers are getting the green light to scale up. The minister stressed that private companies are more competitive, respond more quickly to the needs of the front, and have clear deadlines for project completion.
At the same time, Shmyhal noted that the Ministry of Defense is developing horizontal ties between companies, stimulating cooperation, and creating conditions for technological breakthroughs.
To this end, the educational and scientific infrastructure is being modernized, and R&D support tools are being introduced.
One such tool is the “component library” - a digital platform that already has 230 registered users and over 150 products. It is designed to simplify the search for manufacturers and speed up production cycles.
More than 250 types of components have already been codified, including autopilot systems, body elements, launch and landing devices.
The minister also focused on state financing programs.
Among those mentioned were a grant program for manufacturers of UAVs and unmanned systems, the “Made for Victory” program, which supports companies that produce critical equipment, and preferential lending, under which companies have already received UAH 5 billion, with another UAH 4 billion in applications submitted.
It was announced that the government's goal is to expand lending to tens of billions of hryvnia in order to accelerate the development and production of high-tech solutions.
In conclusion, Shmyhal pointed out that Ukraine is forming a new model of the defense industry — one that is innovative, competitive, localized, and open to partnership. In his opinion, it is the private sector that will be the driving force on the path to our victory and technological independence.
"Ukrainian components for drones already compete with Chinese counterparts in terms of price and quality, and their advantage is ensured by a unique factor - testing in real combat conditions. So I invite our partners to invest in Ukraine. This is an investment in our common security," the Ukrainian defense minister emphasized.
As previously reported by Ukrinform, Ukraine expects to localize the production of Gripen aircraft starting in 2033.
Photo: Oleksandr Klymenko / Ukrinform
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