Daily Maverick
Dailymaverick logo

World

World, Ukraine Crisis

Minister Kuleba calls for more allied aid for Kyiv; Poland to join European air defence project

Minister Kuleba calls for more allied aid for Kyiv; Poland to join European air defence project
Bloomberg
By Bloomberg
16 Apr 2024
Facebook
1
Ukrainian Foreign Minister Dmytro Kuleba urged allies and partners 'to take extraordinary steps' to provide more air defence units to Ukraine.

Poland plans to join a project to develop a European-wide air defence system to deter potential drone and missile attacks, Prime Minister Donald Tusk said. 

China is providing Russia with significant quantities of components to build cruise missiles and drones as well as optical parts for tanks and armoured vehicles, allowing Moscow to ramp up defence production in its war against Ukraine, senior US officials said.

Ukraine ‘urgently needs additional air defence’ - Kuleba


Ukrainian Foreign Minister Dmytro Kuleba urged allies and partners “to take extraordinary steps” to provide more air defence units to Ukraine.

“We urgently require additional Patriots, other modern air defence systems, weapons and ammunition,” Kuleba said in a video address to the second Black Sea Security Conference in Bulgaria. 

“It makes perfect sense to strengthen Ukraine’s air defence as soon as possible and with this regional and global stability,” Kuleba said.   

Poland plans to join Europe’s air defence plan


Poland plans to join a project to develop a European-wide air defence system to deter potential drone and missile attacks, Prime Minister Donald Tusk said.

Speaking at a news conference with Danish Prime Minister Mette Frederiksen in Warsaw on Monday, Tusk said Iran’s recent attack on Israel had confirmed that it was very important to have a system akin to Israel’s Iron Dome air defence.

“There is no reason for Europe not to develop its own shield against rockets and drones,” Tusk said. “It doesn’t take much imagination to understand that we may be in the danger zone as well.”

Tusk said Denmark had backed his plans to join the so-called European Sky Shield Initiative, which currently comprises 21 countries. He also urged to speed up preparation for air defence investments, given the fact that the same Iranian drones are used by Russia to attack Ukraine.

“Iran and Russia act as allies,” Tusk told reporters. “The same Iranian drones that attack Ukrainian suburbs have been used to attack Israel.”

Russia has been aided in its invasion of Ukraine with military supplies from North Korea and Iran, leaving Kyiv at its most fragile moment in over two years of war. 

US warns China is providing Russia with drone, missile components


China is providing Russia with significant quantities of components to build cruise missiles and drones as well as optical parts for tanks and armoured vehicles, allowing Moscow to ramp up defence production in its war against Ukraine, senior US officials said.

The White House is urging Chinese firms to cease their support and encouraging European allies to put pressure on Beijing to end sales from companies like Wuhan Global Sensor Technology, Wuhan Tongsheng Technology and Hikvision that are providing critical components for Russian military systems, according to an official who briefed reporters on condition of anonymity on Friday.

While there is no evidence China is providing lethal assistance, people familiar with the US intelligence assessment characterised the aid as just as significant, saying that without the imports, Russia’s military-industrial base would struggle.

Chinese officials argue the country isn’t taking a side in the face of Russia’s full-scale war, even as Chinese President Xi Jinping and Russian President Vladimir Putin have established a deep alliance. For well over a year, China has pushed back on US claims that it has considered providing lethal aid to Russia in its war, saying it never sells arms to parties involved in a conflict. Chinese officials have also noted that some technology is dual-use, with both commercial and military applications. 

But one person familiar with US intelligence described a ramping up of Chinese support for Russia. 

The assistance from Chinese firms detailed on Friday probably includes nitrocellulose which Russia uses to make propellants for weapons, according to the officials. They also said Chinese entities were working to produce drones within Russia, according to intelligence gathered by the US. The underlying intelligence materials were not provided by individuals who described the conclusions.

In the last quarter of 2023, 70% of Russia’s machine tools and 90% of its microelectronics imports came from China, the official said, material that Russia has used to produce missiles, tanks and aircraft. The companies providing machine tools include Dalian Machine Tool Group, a leading manufacturer, according to the officials.

Russia has also received military optics that are manufactured by the Chinese firms iRay Technology and North China Research Institute of Electro-Optics for use in tanks and armoured vehicles, according to the officials. 

Arming Ukraine turns Soviet tank refitter into a billionaire


The run-down factory on the edge of the Czech medieval town of Sternberk used to fix up military vehicles abandoned by the Nazis after World War 2. Now it’s part of a compound churning out hardware for Europe’s latest conflict and has made a billionaire out of its owner.  

Excalibur Army takes rusting Soviet-era tanks — often with mud and grass on them — and refits them for action. Since Russia invaded Ukraine in February 2022, the business run by Michal Strnad has benefited from the biggest demand for weapons since the end of the Cold War.

War, of course, can be lucrative. Europe’s defence spending pushed shares in makers of military equipment to records this year, driven by orders at companies such as Germany’s Rheinmetall. But Strnad’s family-owned company stands out in a country that was once a key supplier of arms to Nato’s adversaries in the former Eastern Bloc.

At 31, Strnad is roughly as old as Excalibur, which was started by his father and is now the biggest and most profitable component of Czechoslovak Group AS, or CSG. Revenue jumped to €1.73-billion last year, the company said last week, more than three times what it was in 2021.  

“Even if the war were to end tomorrow it would take years to replenish the empty stocks, not to mention the push to boost defence spending and ramp up production,” Strnad said at his office in Prague. “I am confident there will be strong demand for a long time to come.” 

The company, which also manufactures combat vehicles as well as civilian and military trucks, has a full order book for years, according to Strnad.

CSG expanded by buying Spanish arms producer Fabrica de Municiones de Granada in 2020 and Italy’s Fiocchi Munizioni two years later. It’s currently pursuing the purchase of Vista Outdoor’s ammunition business, a transaction facing some political opposition in the US.

The new geopolitical landscape is a boon for defence firms. Europe is taking steps to scale up production and bolster military readiness at a time when the US is stalling new funding for Ukraine and presidential candidate Donald Trump has threatened to abandon Nato partners who don’t meet spending requirements. Last month, the European Union agreed to establish a “defence industrial strategy”. 

Analysts at Goldman Sachs Group said last week that valuations on some defence companies were now stretched. Rheinmetall shares, for example, have surged more than 500% over the past three years, outperforming most of the big US technology companies.

“Maintaining defence spending at the levels we now see will almost certainly mean some difficult budgetary choices for policymakers,” said Guy Anderson, a principal analyst at Janes, which specialises in defence and security.

Strnad’s father, Jaroslav, started Excalibur in 1995. He bought decommissioned Soviet-made tanks and other gear from future Nato members in Eastern Europe with a plan to turn them into scrap metal for profit. But he discovered a thriving market for spare parts and second-hand combat vehicles in Africa, and also benefited from some close political ties at home. 

Since then, Excalibur refurbished heavy military equipment, including some 300 T-72 main battle tanks. About 100 of them so far have been loaded on to trains and dispatched to Ukraine, along with artillery shells. CSG’s production of heavy ammunition rose more than 10 times since the start of the war in Ukraine while its workforce nearly tripled to 10,000 people at sites in eight countries.

Michal Strnad took over from his father as the sole owner of CSG in 2018 when he was in his mid-20s. He’s now worth at least $5-billion, according to the Bloomberg Billionaires Index, with his company among the fastest-growing arms makers in Europe. DM

Categories:

Tags: