A politically backed growth
The Czech arms trade, constructed on the huge industrial base of the socialist period, solely slowly recovered after the troubled privatisations of the Nineteen Nineties. Its development was additional hampered by a broken repute from controversial exports to struggle zones and authoritarian regimes, which repeatedly strained relations with the federal government till 2020.
The dynamics shifted dramatically after Russia’s aggression in opposition to Ukraine. Czech arms producers not solely benefited from the surge in world demand for weapons, but additionally grew to become important companions for the Czech authorities in sustaining army assist for Ukraine.
The manufacturing portfolios of the 2 largest Czech enterprises – CSG and STV – align carefully with Ukraine’s defence wants. Each constructed their companies on overhauling and reselling Soviet-era heavy weaponry nonetheless broadly utilized by the Ukrainian army. Additionally they manufacture large-calibre artillery ammunition (STV in Czechia and CSG in its factories overseas), a useful resource that has confirmed essential on the Ukrainian battlefield.
Along with their very own manufacturing, the primary Czech arms producers grew to become key gamers within the “ammunition initiative” launched by the Czech authorities. Introduced publicly by President Petr Pavel in 2024, this system goals to produce Ukraine with desperately wanted and globally scarce artillery shells.
In keeping with Ondrej Kundra, an investigative journalist on the Czech weekly Respekt who has adopted the initiative since its onset, it started within the first days after Russia’s assault on Ukraine because of a handful of people who selected to interrupt with the same old guidelines, act rapidly, and show a degree of creativity and braveness hardly ever seen within the Czech state administration.
The initiative is politically backed by the Czech authorities and president, and coordinated by the state Inter-Governmental Defence Cooperation Company (AMOS). In follow, it depends on Czech non-public arms firms finding accessible ammunition on the worldwide market and negotiating purchases utilizing their long-standing contacts. Particular person offers are then financed virtually completely by different Western states.
To date, the initiative has delivered 1.5 million artillery shells, financed by a coalition of prepared states, with Germany, the Netherlands and Belgium among the many largest donors. Czechia’s personal monetary contribution has been modest – lower than 2 per cent of the full funding – and was directed in the direction of the home ammunition producer STV, preserving the financial revenue at residence. On the similar time, 5 Czech arms firms serving as intermediaries have profited considerably from the total quantity of purchases, incomes charges for procurement, refurbishment and transport.
Praised by Ukraine for the velocity and effectivity of its deliveries, the initiative has earned Czechia vital political capital on the European stage. It has additionally introduced the nation substantial financial advantages at residence via its quickly rising arms trade.
The direct earnings go to Czech firms and their homeowners. CSG, the most important of them, tripled its revenue between 2024 and 2025, and its proprietor, Michal Strnad, grew to become the richest particular person within the nation, based on Bloomberg. Nevertheless, the state and its funds have additionally benefited considerably from the growth, as a big portion of revenues has gone into wages, subcontracting, reinvestment and taxes.
But at residence, these financial beneficial properties and the minimal taxpayer value have been largely neglected, leaving house for populist opponents to border Czechia’s arms assist as wasteful and politically misguided within the run-up to the October common election.
