Hundreds of Ukrainian businesses making weapons and military equipment have sprung up since Russia's full-scale invasion, but some are struggling to fund production, and all are afraid of being targeted in intensifying Russian missile strikes.

Kyiv

Russian forces have invaded Ukraine from land, air and sea with strikes causing widespread damage. Global leaders have condemned the move and imposed sanctions.

Ukraine Invasion

Title: Ukraine Arms Makers Struggle Amid Funding Shortages and Russian Strikes

Since the onset of Russia's full-scale invasion, Ukraine has seen a surge in the establishment of businesses focused on the production of weapons and military equipment. This burgeoning private arms sector, however, is now encountering significant challenges. A notable issue is the drying up of funding necessary to sustain production amidst the backdrop of escalating Russian missile strikes.

These businesses, crucial to Ukraine's defense, are navigating these hurdles by investing their own resources. Owners have not only financed their operations out of pocket but have also undertaken the task of relocating their production facilities to elude Russian intelligence efforts. Despite these efforts, the overall capacity of Ukraine's military-industrial complex—valued between 18 to 20 billion dollars annually—is only supported by government funding for a third of its needs.

The increase in private defense manufacturers, which has more than doubled since the invasion began, signifies a pressing demand for further financial support. Ukraine has sought assistance from international partners to alleviate cash shortages, with Denmark responding by pledging $28.5 million. However, manufacturers face additional obstacles, such as bureaucratic procedures that impact their long-term planning capabilities and restrict their ability to respond to the dynamic demands of wartime production.

The complexities of operating within a wartime economy extend beyond financial and administrative challenges. Some businesses report having to move their operations frequently to maintain security, and the widespread Russian strikes on Ukraine's energy infrastructure have further complicated manufacturing processes. Despite claims from some government sources denying issues with power supply to the arms sector, the reality on the ground speaks to significant operational difficulties.

This situation sheds light on the resilience of Ukrainian arms manufacturers amid ongoing conflict. While navigating financial constraints, bureaucratic hurdles, and the direct threats posed by Russian aggression, these businesses remain committed to supporting Ukraine's defense capabilities. As the war continues, the ability of Ukraine's private arms sector to adapt and overcome these challenges will be crucial to the country’s endurance and ultimate success.



Ukraine arms makers held back by lack of cash

Since Russia launched its war on Ukraine over two years ago, hundreds of businesses making weapons and military equipment have sprung up in the country. But now the budding private arms sector is facing setbacks as funding dries up and Russian missile strikes intensify. Owners say they have pumped in their own cash to survive and have moved locations at their own expense to stay ahead of Russian intelligence. Reuters spoke with Ukraine's Strategic Industries Minister Oleksandr Kamyshin. At the moment, the general capacity of Ukraine's military-industrial complex is 18 to 20 billion dollars per year. The Ukrainian government can fund only a third of this capacity. According to his ministry, the number of private defense manufacturers has more than doubled since the invasion. To resolve cash shortages, Ukraine is asking foreign partners to fund its arms production. Denmark became the first to answer the call on April 16th when it pledged 28.5 million dollars. Some manufacturers say their financial woes are compounded by red tape. The first threat that makers come up against when they start working is the bureaucracy of the military sphere and of purchases. Vladislav Belbas heads one of the few Ukrainian manufacturers making armoured vehicles and artillery shells. He cited the fact that the defence ministry only places orders for the current year, hampering makers' ability to plan for the long term. Some manufacturers also want to be allowed to export, though that has so far been barred for fear it could undermine Ukraine's pleas for military aid from abroad. Aside from financial difficulties, making weapons during a full-scale war is an inherently risky business. Some manufacturers move locations as often as every three months for security. Belbas said that Russia's strikes on Ukraine's energy infrastructure had hurt production. In 2022 to 2023, we did not have electricity for two-thirds of our working hours. Of course, under such conditions, it is very difficult to manufacture anything. A government source who spoke on condition of anonymity denied that manufacturers had issues with power supply. In the event of power cuts, they said the arms sector would quote, be switched off last.

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Ukraine Invasion