Slovakia reflects the new reality seen across the continent as the war in neighboring Ukraine forces Bratislava to take action to fill depleted stores, build effective deterrence, and continue supplying Kyiv.
But can the Slovak arms industry deliver? After decades of neglect and work at near-minimum capacity, it needs to step up, as shown by this analysis based on research by Bratislava’s Adapt Institute.
Slovakia’s defense industry has its roots in the strategic need to shift manufacturing to the Slovak part of the old Czechoslovakia, further away from a resurgent Germany, in the years after the country’s establishment in 1918.
The Communist regime after World War II continued strengthening its capacity to produce arms, mostly under Soviet license. Central Slovakia produced tens of thousands of Soviet tanks, like the T-55 and T-72, and infantry vehicles such as the BMP-1.
By the 1980s, the industry experienced a significant slowdown. Third-world markets, which had provided regular customers, were stocked up, US-Soviet relations were easing and, thanks to a lack of innovation, the products were increasingly obsolete and uncompetitive.
After the Velvet Revolution of 1989, the industry was restructured in a chaotic rather than conceptual way. Corruption entrenched its problems and solidified its weak position in the newly opened free markets.
Manufacturers of some products, such as self-propelled howitzers, survived the turbulent period of the 1990s, and when Slovakia entered NATO in 2004 it helped transform the industry. Artillery ammunition manufacture was switched from Soviet-standard 152mm to NATO-standard 155mm, for example, and private companies focusing on niche technology were established.
Since 2018, the defense industry has been incentivized by the modernization of the Slovak armed forces, shaped by the impacts of the coronavirus pandemic, and driven by the increased need for weapons, weapon systems, and ammunition for the war in Ukraine.
Two products stand out: The Zuzana 2 self-propelled howitzer, made by the state-owned Konštrukta Defence, and 155mm artillery shells made by ZVS Holding, which is owned jointly by the state and MSM Group (under the Prague-based CSG.)
After Russia’s full-scale invasion of Ukraine, the Slovak government provided eight Zuzana 2s to Kyiv. Originally ordered in 2018 for the Slovak armed forces, they were delivered by January 2023. A year later, another 16 had been sent. Worth €92m ($100m), the second order was financed by Norway, Denmark and Germany.
It illustrated how ready-made products, tested in battle and aligned with a flexible multilateral format could be quickly delivered for a country’s defense. Thanks to orders from the Slovak and Ukrainian defense ministries, Konštrukta has been able to steadily increase production since 2018.
Year-on-year profits increased 10-fold in 2022 and the number of workers rose 36% to almost 200. The company is currently able to produce around 20 howitzers a year. If new contracts were signed with immediately available capital, production could double. The order book for current capacity is filled until 2025.
Cooperation with Ukraine’s Armed Forces and defense industry has been vital for products like Zuzana 2. The howitzer has been gradually upgraded to reflect its use in combat, for example, adjusting the firing system to facilitate the use of older artillery shells. Zuzana 2s delivered to Ukraine were the updated versions.
BIA, Konštrukta’s new product, is a self-propelled 155mm howitzer that is lighter and more mobile than the Zuzana 2, yet retains its firepower. Its potential markets, besides Ukraine, include Southeast Asia, Central Asia, and South America, though no contracts have yet been signed.
The howitzers illustrate one of the wider virtues of the Slovak defense industry. They are manufactured like a jigsaw puzzle of components produced and supplied by Slovak companies, creating synergies in development, production, and maintenance, and encouraging multiple companies to join efforts to sell abroad.
Alongside such processes, Slovakia has a range of small private enterprises producing competitive niche tech in areas such as electronic warfare, communication, and detection systems.
It also has a particularly strong position in the production of 155mm artillery shells through ZVS Holding. Before Russia’s full-scale invasion of Ukraine, ZVS was working at around 60% of its production capacity, but now its order book is full until at least next year.
CSG, co-owner of ZVS, plans to invest around €50m to enlarge capacity, hire new workers and increase productivity through the adoption of new technologies, including automation.
ZVS benefits from producing shells that can be used by practically any 155mm howitzer. While it mainly supplies the Slovak and Polish armed forces, it also sells to the Baltic countries and multiple NATO member states, including the US.
Being partly owned by a private company brings benefits, including access to private capital and flexible investments and decision-making. CSG also owns FMG, a Spanish company that produces the gunpowder used in shells, giving ZVS good access to critical supply chains.
The examples of the Zuzana 2 howitzers and 155mm artillery shells show the importance of long-term orders to enable further investment in development, production, and maintenance. They also illustrate the benefit of effective public-private partnerships for delivering cutting-edge products and, if needed, increased capacity.
Challenges remain in defense industries across the European Union (EU), including outdated procurement legislation, which needs to adapt to balance transparency with in-time deliverability. Other pressing problems include the lack of qualified workers and constrained capital.
Intensive systemic exchange is needed between public and private actors to develop more dynamic, adaptable, and up-to-date systems that are ready to develop, produce, and maintain military hardware.
Joint projects within the EU and NATO should also reflect security needs and prioritize deliverability while preserving market competition, which drives innovation and maintains price levels.
Multiple Slovak companies see close engagement with Ukraine as a gateway to vast new opportunities. After the joint development, production, servicing, and modernization of defense products such as howitzers, they are being tested in intensive combat.
However, with a new Ukraine-skeptical political leadership in Slovakia, these opportunities and projects currently remain in limbo. Political will is essential for the industry to ramp up production and delivery. Where there is will and commitment, capacity will follow.
Viliam Ostatník, PhD, is currently a post-doctoral researcher at the Department of Political Science at Comenius University in Bratislava, Slovakia. His research focuses on private military corporations and their impact on the modern state. He graduated from the University of Bologna (International Relations with a specific focus on Central and Eastern Europe, M.A.). He is also a Senior Analyst at the Adapt Institute in Bratislava, where he focuses on defense.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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