Production Capacity of Ukrainian Defense Industry Increased by 75%
26 February, 2025 Peklo cruise missiles. Photo: Herman Smetanin Last year, the defense industry's production capacity increased to £35 billion in monetary terms, according to the Ukrainian Minister of Strategic Industries, Herman Smetanin.
Ukrainian arms manufacturers discussed whether these capacities will be used in 2025. "The capabilities of the Ukrainian defense industry have grown 35 times over the three years of the invasion: from £1 billion in 2022 to £35 billion in 2025," the Minister stated. At the same time, last year's public procurement of defense products reached £9 billion of own funds in addition to £1.5 billion of foreign investment.
This means that with the same funding in the new year, Ukraine will only be able to use a third of its production capacity.
Growth of defense production capabilities of the Ukrainian defense industry from 2022 to 2025. Image: Ministry of Strategic Industries
During the annual War 2025 forum, Ukrainian arms business representatives shared their vision and possible solutions for a country with an underfunded defense industry at war. "Ukraine produces significantly more Soviet-caliber ammunition than all our partners combined.
But the war continues, so we must keep expanding our production. We need to fully implement long-term contracts, ensure their financing, and continue working with our partners to use our production capacities. It is also crucial to standardize arms procurement, as this can lower costs through economies of scale," said Vladyslav Belbas, director of Ukrainian Armor.
At the same time, Kateryna Mykhalko, director of the Technological Forces of Ukraine association, continued to advocate for the opening of controlled arms exports and more active involvement of Western partners. "I was at the IDEX exhibition in Abu Dhabi and visited the stand showcasing Russian drones. It was four times larger than ours, with 'tested in combat operations in Ukraine' written everywhere.
They are making billions of dollars from these sales and reinvesting in their military factories. It is time for us to consider our own place in the world. Sixty-three percent of the production capacity of our 50 companies remains unused.
For the past two years, we have been pushing for a controlled opening of arms exports, but instead, our companies are relocating abroad. This is how we are losing our industry," said Kateryna Mykhalko. At the beginning of the year, the Technological Forces of Ukraine presented a study to Militarnyi that showed that Ukrainian manufacturers failed to realize 63% of their production capacity in the interests of the state and to supply several dozen weapons models demanded by the army.
Its monetary equivalent reached £1,992,000,000. It was estimated that there were 1,720,000 drones and electronic warfare systems that could be produced by manufacturers. These include FPV drones, ground robotic systems, and long-range attack drones.
These are 30 weapons that have been tested and approved for use by the Ministry of Defense.
The number of non-contracted arms of TFU companies in 2024.
Photo credits: Militarnyi
Together with the opening of exports, the speakers see a partial solution to the problem in the creation of joint ventures with Western companies and the attraction of foreign financing.
Militarnyi reported that in 2025, the Ukrainian government will receive EUR1.5 billion to purchase Ukrainian-made weapons for the Ukrainian army from partner countries based on the Danish model.