Half of the capacities of Ukrainian producers of Technological Forces are idle due to the export ban

Leading Ukrainian producers of the Technological Forces failed to sell 63% of their production capacity in the interests of the state.

Here's What We Know

In 2024, private manufacturers of the defence industry failed to produce more than 1.7 million drones and electronic warfare (EW) equipment in the absence of government orders, despite having the capacity to do so.

This means that companies could produce 4,700 of these equipment per day if government customers had continued to contract them. The total cost of this volume of equipment is estimated at almost $2 billion.

According to Technological Forces, private defence companies were able to produce more than 2.7 million weapons in 2024. At the same time, arms manufacturers produced only more than 1 million pieces of military equipment at the request of state buyers and charitable foundations. This is only 37% of the total capacity of manufacturers last year.

Kateryna Mykhalko, executive director of the Technological Forces of Ukraine, said that due to the lack of government orders and the export ban, most enterprises are idle. According to her, the situation threatens the existence of the Ukrainian defence industry: successful companies go abroad, while the rest lose opportunities for development

Some manufacturers of unmanned systems have already moved their facilities to Europe. About 85% of the association's members have either already relocated or are planning to do so.

To partially address this problem, in 2024, Ukraine and Denmark launched a mechanism for financing the procurement of weapons for the Defence Forces, known as the Danish model.

This initiative involves financing of Ukrainian defence companies by the Danish government and other countries. Ukraine compiles a list of projects that require funding, and Danish experts check the companies to assess their ability to fulfil contracts.

Source: Techforce