The National Association of Ukrainian Defence Industries (NAUDI) recently expressed concerns about the impacts of Cabinet of Ministers Resolution No. 1608 on the defense industry. This resolution exempts defense enterprise employees from mobilization, potentially posing critical risks to national security. NAUDI emphasizes the need for working capital among defense companies to avoid contract failures and ensure the Ukrainian Armed Forces receive necessary weapons. Furthermore, there is a call to boost arms exports, which currently face artificial limits, harming producers, the army, and the economy. Collaboration with international partners and joint ventures is seen as essential for developing defense capabilities. NAUDI continues to engage with key figures, including meetings in Brussels, to advocate for policies supporting Ukrainian defense businesses.
What critical risks does NAUDI identify for Ukraine's defense industry?
NAUDI highlights that the exemption of defense enterprise employees from mobilization, as per the recent government resolution, introduces significant risks. These include potential disruptions in the defense supply chain and challenges in maintaining sufficient workforce levels, which could impact national security and the operational readiness of defense companies.
Why is boosting arms exports important for Ukraine's economy and defense sector?
Increasing arms exports is crucial as it supports the financial viability of the defense industry, allowing for reinvestment into production capabilities. It also provides an additional resource for funding defense orders, contributing to national defense. Exports diversify revenue streams and enhance international ties through collaborative ventures.
How does NAUDI suggest addressing contract fulfillment issues in the defense industry?
NAUDI suggests that defense companies maintain a reserve of funds, or working capital, to ensure they can fulfill contracts efficiently. This financial stability is essential to prevent disruptions in the supply of weapons to the Armed Forces of Ukraine. Effective financial management could help prevent contract failure and support continuous production.
What role do joint ventures play in developing Ukraine's defense industry, according to NAUDI?
Joint ventures with foreign partners are seen by NAUDI as key to advancing Ukraine's defense industry. Such collaborations bring in technology transfer, innovations, and shared expertise, enabling Ukrainian companies to enhance their production capabilities and expand their global market reach. They also help in building strategic alliances that strengthen national security.
How does the current profit margin impact Ukrainian defense companies?
Ukrainian defense companies operate with a limited profit margin of around 3-7%. This modest profit is primarily used to maintain and expand production rather than generate significant financial gains. The low profit margin highlights the necessity for reinvestment into the industry's growth and technological advancements to remain competitive and effective.
What concerns does NAUDI have about the Defence Procurement Agency (DPA)?
NAUDI calls for intervention from President Volodymyr Zelenskyy regarding the Defence Procurement Agency due to threats of disruption in arms supplies. The organization stresses that timely intervention is necessary to address issues that could compromise the delivery of essential defense materials and undermine Ukraine's defense readiness.
Why are equal rules for private and state-owned defense companies important?
NAUDI advocates for equal rules between private and state-owned defense companies to ensure fair competition and stimulate innovation. Equal treatment in regulations can help private firms effectively contribute to national defense objectives, optimize resource use, and potentially increase exports, boosting the state budget.
What steps is NAUDI taking to advocate for the defense industry in Europe?
NAUDI engages in diplomatic efforts, such as meetings with the EU Commissioner for Defense in Brussels, to advocate for policies that support Ukrainian defense industries. These engagements aim to strengthen international relations, promote sustainable industrial practices, and secure support that facilitates development and market access for Ukrainian defense entities.
