Poland's defence giant PGZ expands EU partnerships to boost exports

Polska Grupa Zbrojeniowa SA (PGZ), Poland’s largest defence conglomerate, is preparing to expand its sales across Europe and deepen cooperation with leading global defence manufacturers such as Rheinmetall AG, Thales SA, and BAE Systems Plc.

In an interview with Bloomberg News, Chief Executive Officer Adam Leszkiewicz said the state-owned holding aims to secure additional foreign contracts for its portfolio of equipment, notably portable air-defence systems and howitzers that have already been combat-proven in Ukraine. He also sees scope to reach customers outside Poland’s armed forces by offering dual-use technologies to the private sector.

This expansion drive comes as the European Union begins disbursing funding intended to modernise the continent’s armaments production in response to Russia’s full-scale invasion of Ukraine. Since 2022, Poland has doubled its defence spending to nearly 5 per cent of GDP, leaving domestic manufacturers struggling to keep pace with orders from the government.

According to Leszkiewicz, the EU’s €150 billion ($175 billion) defence-industry initiative is poised to alter that dynamic, particularly because the program “strongly prefers” projects built around cross-European cooperation. Such a model, he said, would allow PGZ both to acquire new technical expertise and to participate in joint industrial ventures.

“Cooperation between European defence companies has been missing for many, many years,” Leszkiewicz said during the interview in Brussels. “Today we are looking for partners to learn something, either to purchase or to jointly manufacture products based on new technology.”

PGZ, headquartered in Radom and comprising 70 companies with a workforce of 22,000, is seeking to elevate its international standing just as Poland is set to become the largest beneficiary of the EU’s armaments program, known by its acronym SAFE. The initiative includes strict “buy European” requirements for member states purchasing new military equipment, although—as Bloomberg previously reported—it has triggered disputes over the ways non-EU countries like the United Kingdom might participate. SAFE is also structured to help member states revitalise and expand their domestic defence-industrial bases.

Leszkiewicz said PGZ intends to strengthen its research-and-development capacity and expand cooperation with its European counterparts. The group already works with Thales and the UK’s Babcock International Group Plc on frigate projects, with BAE Systems on ammunition, and with Rheinmetall on armoured-vehicle production.

In 2024, PGZ’s sales rose by 36 per cent to reach 13.9 billion zloty ($3.8 billion), while net profit surged 92 per cent to 1.7 billion zloty. Looking ahead, Leszkiewicz said he aims for one-third of the company’s revenue to come from exports and dual-use technologies, with exports alone representing a quarter of total sales. At present, these categories together account for less than 20 per cent of revenue, he noted.

By Tamilla Hasanova