WARSAW — (July 3, 2025) Poland will invest over 2.4 billion zloty ($662 million) in expanding its production of 155mm artillery shells, the government announced Wednesday, in a major move aimed at strengthening European defense capabilities.
The funds, drawn from the state-backed Polish Capital Investment Fund (FIK), will be distributed among four companies under the Polish Armaments Group (PGZ). The largest recipients are Zakłady Metalowe Dezamet, allocated 1.36 billion zloty, and Mesko, which will receive 887 million zloty.
According to PGZ President Adam Leszkiewicz, the investments will significantly increase shell output, particularly to supply K9 Thunder and Krab howitzers used by Ukrainian and NATO forces.
“This investment reflects the dramatic change in the security situation in Europe,” Leszkiewicz said in a statement.
The Ministry of State Assets initially allocated roughly 3 billion zloty for ammunition manufacturing in 2024. Around 2 billion zloty of that has been earmarked specifically for defense-related production by the Ministry of National Defence.
Mesko’s production facility in Kraśnik is expected to ramp up output to 150,000 rounds annually. The government said the expansion is part of a broader effort to repolonize strategic production and reduce the bloc’s reliance on third-party defense suppliers.
PGZ Vice President Arkadiusz Bąk said the initiative is aligned with the European Union’s Defence Industrial Strategy, which aims to bolster regional capacity amid growing geopolitical uncertainty following Russia’s full-scale invasion of Ukraine.
Demand for 155mm shells surged dramatically following the outbreak of the Ukraine conflict in 2022. NATO stockpiles were rapidly depleted as thousands of rounds were shipped to support Ukraine’s defense. The European Defence Agency (EDA) estimates that member states collectively need to produce over 1 million rounds annually by 2026 to replenish reserves and maintain readiness.
A spokesperson for the EDA welcomed Poland’s move, calling it “a positive step toward reinforcing European strategic autonomy and addressing pressing capacity gaps.”
Beyond security implications, the investment is expected to create hundreds of jobs in southeastern Poland, where Mesko and Dezamet operate. Local officials anticipate an economic boost from new manufacturing lines, supplier contracts, and infrastructure expansion.
“This is about more than just military strength — it’s an industrial opportunity for our communities,” said a regional official from the Subcarpathian Voivodeship, where several PGZ facilities are located.
Poland has emerged as one of the EU’s most active defense spenders, allocating over 4% of its GDP to defense in 2025 — the highest in NATO. Analysts say this positions Warsaw as a future hub for arms production in Central and Eastern Europe.
The announcement follows similar moves by other NATO countries, including France and Germany, to boost domestic weapons production in response to ammunition shortages and increased demand from Ukraine.
For further context, read our reports on the EU’s Joint Ammunition Procurement Plan and Poland’s Growing Role in the EU Defense Ecosystem.