PGZ: Homegrown innovation and strategic alliances in defence of Poland, Ukraine and Europe

In the world of rock music, every fan has an opinion on ‘the biggest band you’ve probably never heard of’. In defence, PGZ might be the most successful European armaments company you’ve probably never heard of. And perhaps with good reason.

As a conglomerate with nearly 60 firms under its roof, PGZ is not an easy company to digest, even though it produces almost everything that the Polish armed forces need, from equipment and ammunition through to missiles and frigates.

What’s more, management board member Jan Grabowski says, PGZ was established a decade ago – conceptually in 2013 and operationally from 2014. It has had its present structure since then.

As a state-owned enterprise, PGZ’s main client is the Polish Ministry of National Defence, which accounts for approximately 80% of annual revenue. But it is not just about Poland’s defence; PGZ aims to be a strategic partner across Europe, seeking a balance between national defence needs and growing its export market.

“We do export, and as the newly appointed management board, one of our objectives is to increase the proportion of revenue from international markets,” says Grabowski, who joined the company in June from European missile-maker MBDA.

With war quite literally on the Polish border, Poland has become a significant spender in Europe, committing 4.7% of GDP to defence in 2025. This funding, more than double the 2% NATO guideline, means PGZ has strong demand from its main client to equip Polish forces and extend support to Ukraine, which Grabowski notes as a top priority.

PGZ focuses its cooperation with Ukraine on supplying and maintaining their equipment, with its own Krab self-propelled howitzers being at the top of their list. PGZ also handles repairs on-site in Ukraine, while complex overhauls are conducted in Poland. The combat experience with PGZ-built ordnance, including, but not limited to Krab SPHs provides valuable insights for future upgrades, he says. PGZ aims to support Ukraine’s defence needs further but keeps specific details confidential due to the conflict.

Combat readiness, air defence shield 

For Grabowski, who oversees PGZ’s maritime division, whether it is 4.7% or 7%, such a level of spending is a sign of the times and a must for all European countries to raise their investment levels in defence.

“Like many EU countries, a substantial portion of our budget is dedicated to supporting Ukraine and bolstering our own defences,” he says. “We are providing resources to our neighbour, from rifles and machine guns to highly complex systems such as the Krab self-propelled howitzers or Rak mortars.”

Poland has indeed initiated an unprecedented defence buildup, purchasing advanced U.S. systems for security and NATO alignment.

This includes a $4.6 billion contract for 32 F-35A jets, $10 billion for 96 Apache helicopters, and hundreds of Abrams tanks. These acquisitions support rapid interoperability with U.S. forces, as well as immediate combat readiness.

But many assets are made in Poland. One of PGZ’s projects is a missile defence shield over the central European country. “It’s heartening to see elements of this defence system already operational, including the first batch of the launchers that are fully integrated and deployed. The progress here is very much in line with Poland’s commitment to a secure Europe.”

Grabowski adds: “Our short-range air defence radars are entirely Polish made, which underscores our technical capabilities.” This radar expertise complements PGZ’s missile systems, including Man-Portable Air Defence Systems (MANPADS) and Spike anti-tank missiles, produced in partnership with Israeli firms.

To ensure Poland’s air defence remains robust, PGZ is also collaborating on integrated systems. PGZ partners with MBDA UK, as well as Northrop Grumman, Raytheon, and Lockheed Martin of the United States, to create the multilayered air defence system over Poland.

“We’re producing launchers for the Patriot system and working with MBDA on a short-range system that merges European technology with Polish innovation,” Grabowski says. These partnerships are essential to achieving a multi-tiered air defence shield, integrating three layers of crucial area denial capabilities.”

Poland also aims to build a self-sufficient ammunition production. “Poland’s production capacity – specifically in the manufacturing of 155mm artillery shells – has been pushed to its limits and we’re focused on multiplying our potential in this area,” Grabowski explains.

According to a legislative bill published in November 2024, in which the Polish government is planning to invest 3 billion zlotys (€695 million) to boost ammunition production, with a focus on expanding large-calibre production. In fact, ammunition production is one of PGZ’s most intense areas of focus. “Manufacturing shells is complex,” says Grabowski, who also worked at Nexter Systems earlier in his career.

As the European Defence Agency (EDA) 155mm joint procurement efforts have shown: “It’s not just about the casing; we’re talking about propellants, explosives, fuses.”

Peace in 24 hours? 

Almost three years of war in Ukraine have galvanised Poland perhaps like no other country. It has given refuge to millions of Ukrainians fleeing the conflict. But not all nations share its compelling sense of a cause. What if, as incoming U.S. President Donald Trump pledged to do as an election candidate, the Ukraine war is over next year?

Grabowski says the EU’s task is to be ready for any scenario. “Looking at the history of Europe, it is not that the threats go away. They are just silent,” he asserts.

Some NATO officials have suggested that within five to eight years, Russia could be militarily prepared to launch an attack on allied countries, assuming it successfully rebuilds its forces. Moscow rejects any notion that it would contemplate an attack on NATO.

PGZ is certainly not hedging its bets. Poland’s largest defence expo, MSPO, held annually in Kielce, has become a major platform for PGZ to showcase its innovations. This year, the SA-35 anti-aircraft gun and the Heron 6x6 armoured vehicle featured prominently.

The SA-35 is a 35mm automatic gun mounted on a truck chassis, designed entirely by Polish engineers. “It’s fully Polish, right from the research and development to final assembly, and it’s intended as an integral part of our layered air defence system,” Grabowski says.

With a role alongside the U.S Patriot systems and Polish NAREW missiles, the SA-35 illustrates Poland’s ambition to be self-sufficient in its critical defence systems, he adds.

When it comes to the Heron: “The vehicle’s design reflects lessons from the war in Ukraine. It’s based on a chassis from Czechia, and the internal design has been tailored to meet our unique needs. I certainly think it could become one of our export products.”

All for one, and all for ... Europe

On NATO’s eastern flank and with recent memory of life under Soviet rule, Poland is keenly aware of the threat to the east. NATO membership and its close bilateral relationship with the United States are paramount for Warsaw.

Still, Grabowski believes PGZ can work within Poland’s transatlantic approach to further EU initiatives to strengthen the European Defence Technological Industrial Base (EDTIB). “Missile-maker MBDA is proof that European companies can consolidate and successfully collaborate,” he says.

PGZ has extended this collaborative approach to its maritime division, where it is working on new frigates in cooperation with Babcock from the UK, even if Grabowski concedes Britain is no longer in the EU. He, like many others, rues Britons’ decision to leave.

The Arrowhead 140 frigates, based on the UK’s Type 31 design, are being constructed in Polish shipyards. “These frigates will have a Polish identity but benefit from British shipbuilding legacy and expertise,” says Grabowski.

Similar partnerships exist with French and Dutch companies, where PGZ integrates radar technology from Thales branches in the UK, France and the Netherlands to enhance the reconnaissance, recognition, tracking and targeting capabilities of its products.

Poland’s defence ambitions are tied not only to equipment but also to skills and knowledge transfer. “Every time we engage in a partnership, we ensure there’s a technology transfer component. Our collaborations with South Korean, British and U.S. partners are structured so that we don’t simply buy equipment; we acquire the know-how to maintain and improve it,” Grabowski asserts.

“In times of conflict, a strong domestic defence industry is essential. The EU has realised this and we are moving to shore up our capabilities,” he says.

Six types of tank 

For Grabowski, building a European defence framework requires more than funding and equipment. “EDA, the Visegrad Four and the Weimar Triangle of France, Germany, and Poland, facilitate cooperation,” he says. “But we need political will.”

During his time with Nexter, Grabowski witnessed French efforts to involve Poland in the future tank development project. He believes cooperation is crucial, not only for cost-sharing but also for strategic unity. “Europe has six different types of battle tank, and it’s clear that less duplication could really enhance our collective strength. Centralised command systems on different tank systems would help enormously.”

A united European defence capability is the ideal, but as Grabowski has pointed out, it requires political and industrial commitment. “Even outside of the EU, our partnership with the UK on frigates started when Britain was an EU member. Such partnerships must transcend politics if Europe is to stand strong.”

PGZ at a glance

• PGZ is Poland’s primary defence contractor

• Supports Ukraine’s defence, supplying and maintaining the Krab howitzers

• Plays a central role in building Poland’s multi-layered air defence systems

• Manufactures launchers for the Patriot system and collaborates with European and U.S. firms on short-range air defence solutions

• Domestic ammunition production is a short-term major focus area

• Has recently developed the SA-35, a 35mm automatic gun on a truck chassis

• Its Heron is based on a Czech chassis, but tailored for Polish needs and for export opportunities

• Partners with Thales for radar technologies to enhance its products’ surveillance and detection capabilities