Ukraine has sufficient capacity to produce for front and for export – NAUDI executive director Honcharov
Drone Industry
Joint ventures with foreign partners are the key to developing Ukraine’s defense industry. For the state, exports are important as they will provide an additional resource to finance defense orders.
This was stated by Serhii Honcharov, Executive Director of the National Association of Defense Industries of Ukraine (NAUDI), in an interview with Forbes, Censor.NET reports.
He stressed that Ukraine is actively seeking international partners to create joint production facilities. Such projects will give a powerful boost to expanding the country’s defense potential.
"We have more than sufficient capacity to produce for both the front and for export," Honcharov emphasized.
In his view, the idea underlying the ban — that domestic production of defense products is static and unlikely to grow — is no longer relevant.
"If it comes to that, a startup that produces drones and has an export license will be able to manufacture far more drones, reducing its production costs and the price it can set for the ministry. A company that produces for export will also hire more technical specialists who will pay income taxes — revenue the government can use to purchase additional weapons," he explained.
According to him, today defense industry producers face limited state funding: the weapons procurement budget for 2025 is only $17.5 billion — almost half of what Ukraine’s defense industry could provide.
He noted that in 2021, state-owned enterprises accounted for 80% of the defense market. Today, he doubts they make up even 30%.
"These two market segments are very different," he explained. "Startups are flexible and innovative. State-owned companies, which often operate huge tank or aircraft repair plants, produce very little from scratch, and what they do produce is rarely of the same quality as the output of private companies."
The key challenge is to bridge the gap between the industry’s production capacity and the level of funding.
This issue lies at the center of new initiatives — the Defense City bills and the Build With Ukraine program. They are aimed at encouraging investment, streamlining regulatory procedures, and creating additional sources of financing for production both in Ukraine and abroad.
"This should not be a closed club. We want equal opportunities to be available to all viable Ukrainian defense producers," Honcharov emphasized.
The NAUDI Executive Director also warned that it is important not to concentrate state support solely in the hands of a limited circle of large companies, since small and medium-sized producers play a critical role in supplying the front.
