Poland turns to home-grown giant for its defense buildup

WARSAW — Poland is seeking to increase the role of domestic companies in its rapidly growing military sector, but the structure of state-owned PGZ, a conglomerate of 50 independent firms, raises concerns about whether the surge in defense spending can translate into a stronger industry. The Polish Armaments Group (PGZ) has secured billions of złoty in new orders, becoming the focal point of the military buildup.

Formed in 2013 from various smaller companies with differing management and political ties, PGZ CEO Adam Leszkiewicz, who has held the position since May 2025, has noted that while PGZ manufactures over 700 products, this breadth can also be a double-edged sword. With decades of experience dealing with outdated Soviet-era equipment, Poland's defense spending has surged following Russia's annexation of Crimea in 2014 and the invasion of Ukraine in 2022.

The company specializes in armored vehicles, wheeled vehicles like the Jelcz, sensors, radar, rifles, pistols, and is also building ties with European defense firms. PGZ is constructing new artillery shell factories in collaboration with the U.K.’s BAE Systems and has partnerships with MBDA for missiles and launchers. Poland plans to allocate 200 billion złoty (€45.7 billion) to defense this year, representing 4.8% of its GDP, the highest level in NATO, and the largest recipient of the EU's €150 billion SAFE loans-for-arms program, receiving nearly €44 billion.

The government is actively working to ensure that the defense industry receives a larger share of the new spending, signing approximately 120 billion złoty in contracts with PGZ and its subsidiaries. However, this push for domestic industry may clash with the government's desire to rearm swiftly to counter Russia, potentially posing challenges for its domestic arms industry.

Despite political risks, experts believe that PGZ is striving to fulfill its role in arming the Polish military.