Kyiv has received billions of dollars’ worth of weapons from the West but wants to produce more of its supplies

By Alistair MacDonald

December 7, 2023

The Wall Street Journal


KYIV, Ukraine—This summer, two seaborne drones called Sea Babies left Ukrainian territory and sped across the Black Sea before striking a Russian-built bridge and exploding. The attack was heralded not just for the damage done but because the so-called sea drones were designed and built in Ukraine. Since Russia’s full-scale invasion of its neighbor in 2022, the U.S. and its allies have sent Ukraine about $100 billion worth of ammunition, missiles and tanks through the end of October, according to the Kiel Institute, a research group. Now, Ukraine wants to wean itself off Western weapons and start producing more of its own supplies.

Rebuilding Ukraine’s arms industry could help secure the country’s long-term security and boost its economy, government officials say. The effort gained added urgency Wednesday when Republicans in the Senate blocked a Ukraine aid bill that earmarked funds for military support. The White House has warned that the U.S. will be unable to continue providing more weapons and equipment to Ukraine if Congress doesn’t approve additional funding by the end of the year. Moreover, Western stockpiles of weapons are running down and the war shows no sign of ending.

This week, the U.S. government is hosting Ukrainian ministers and weapons makers for a two-day conference aimed at encouraging joint production with American companies. U.S. arms makers expected to attend include Lockheed Martin.

Ukraine was a major arms manufacturer during Soviet times but has suffered since then from a lack of investment. It has, though, increased its production of weapons, including artillery shells and drones, since the war started. “We have some products that are unique in the world,” said Anna Gvozdiar, deputy minister at the Ministry of Strategic Industries, speaking before the conference in Washington, D.C., on Wednesday and Thursday.

While other countries are working on sea drones—unmanned vessels that can travel on or below the water’s surface—Ukraine has proven its fleet in combat several times. The so-called Sea Baby can travel some 500 miles through moderately stormy conditions before delivering a large payload, according to the Security Service of Ukraine, or SBU, which operates it.

But despite successes in a few areas, Ukraine remains dependent on its allies. Rebuilding its arms industry is expected to take years, and Western manufacturers are unlikely to produce their most sophisticated weapons in the country.

Kyiv has already encouraged some big European arms companies, including Britain’s BAE Systems, Germany’s Rheinmetall and Turkey’s Baykar, to start operating in Ukraine. They all say they are moving toward manufacturing in the country. “Ukraine wants to show that there is a path to them being more self-sufficient,” BAE Chief Executive Officer Charles Woodburn said in an interview.

BAE is in discussions with several Ukrainian companies and aims to make spare parts in the country within the next few months. In time it says it could start making a light howitzer too.

Rheinmetall is already repairing German military vehicles in Ukraine, a spokesman said. The company intends to start assembling its Fox armored personnel carrier in Ukraine soon by sending its components over the border in what it has dubbed a “Fox in a box.”

Further out, Rheinmetall’s ambition is to produce its new Panther tank and air-defense weapons in Ukraine. Armin Papperger, the company’s CEO, said manufacturing in the country is cheaper given lower labor costs.

In June, Turkey’s Baykar broke ground on a new factory in Ukraine to produce its drones, which were used by Ukraine to defend Kyiv last year. “By the end of the next year, we plan to finish general construction works,” said Haluk Bayraktar, the company’s CEO.

Setting up in Ukraine brings a particular set of challenges. When Russia invaded, it bombed Ukrainian weapons factories, and any new facilities would offer a fresh high-profile target. Arms-industry executives say that there are also concerns about sending staff into a war zone to oversee production and that plans for weapons could fall into Russian hands.

Despite the challenges, Ukrainian weapons production has increased 68% so far this year compared with the same period last year, said Gvozdiar, the government deputy minister. Some local companies spread out across the country or moved operations abroad to avoid bombardment.

One area of focus for Ukraine has been drones, which have played a big role in the war. The country is home to some 200 manufacturers of unmanned aerial vehicles, according to Gvozdiar.

Ukraine has an insatiable appetite for drones, going through around 10,000 a month, according to the Royal United Services Institute, a think tank.

The country needs to develop longer-range drones and missiles, analysts say, because its foreign allies are reluctant to let Kyiv use their weapons to hit Russia for fear of escalating the conflict.

Vadym Yunyk, the co-founder of drone maker ISR Defence, said he planned to talk to U.S. companies at the conference in D.C. about supplying parts and potentially setting up joint ventures. He has already visited British, French and Czech companies and arms fairs to secure components.

Modern weaponry is typically assembled from a wide assortment of different components bought from other companies. Many of the most important components used to make drones, including

computer chips and surveillance sensors, are bought from abroad, including China, creating potential supply-chain vulnerabilities.

To reduce that risk, Ukraine is trying to source more components domestically. One prototype drone being developed is made entirely from Ukrainian components, said Gvozdiar.

ISR’s Yunyk said foreign companies could learn from working with Ukrainian manufacturers that have quickly modified weapons based on lessons from the battlefield. For example, ISR has tweaked its drones to account for changes in Russian electronic warfare, which can block or confuse navigation signals.

Before Russia’s invasion, ISR only produced a few military drones a month. Now it makes around 100 and is working on a new drone that aims to travel up to 150 miles. The company also makes autonomous ground vehicles. “You can compare Ukraine’s [modern] defense industry with a child, a two-year-old that looks like an adult,” Yunyk said.

Ukraine, though, still requires more weapons and ammunition that it can make itself or get from overseas.  “It’s never enough, our need is much, much bigger,” said Gvozdiar, the deputy minister.


Alistair MacDonald is a senior reporter for The Wall Street Journal in London, where he covers European defense companies and Ukraine, in particular stories related to arms supply, corruption and the war’s effects on the global food chain. Alistair also takes an interest in the intellectual and developmental disabilities community, writing about the effects of the Covid-19 pandemic and war in Ukraine on people with autism, Down syndrome and other conditions. Alistair has won several awards, including six Sabews and an OPC. He has held a variety of jobs at the Journal, including markets editor for EMEA, senior Canada correspondent, and U.K. politics and general news reporter in London. Alistair has also worked at Reuters and outlets in his native North East of England.