# Poland bets on homegrown defense giant

> Poland is funneling billions into state-owned PGZ to build a stronger domestic arms industry, but the company's fragmented structure and political instability threaten the strategy.
- Title: Poland bets on homegrown defense giant · POLITICO | Shortify
- Summary: Poland is funneling billions into state-owned PGZ to build a stronger domestic arms industry, but the company's fragmented structure and political…
- Keywords: poland, pgz, defense spending, military buildup, domestic arms industry, adam leszkiewicz, donald tusk, nato, russia, ukraine, POLITICO
- Source: POLITICO — https://politico.eu/article/poland-home-grown-giant-defense-buildup
- Published: 2026-11-12T03:50:00+00:00
- Read time: 2 min
- Topics: poland, pgz, defense spending, military buildup, domestic arms industry, adam leszkiewicz, donald tusk, nato, russia, ukraine, politics, world
## Poland's defense giant takes center stage
The Polish Armaments Group, or PGZ, has won billions of złoty in new orders as Poland rapidly expands its military. The state-owned conglomerate is central to Warsaw's strategy to build domestic defense capacity.
## A company built from 50 independent pieces
PGZ was assembled in two thousand thirteen from about fifty fiercely independent smaller companies, each with their own management and political backers.
## Strength and weakness in one company
PGZ makes more than seven hundred products, from armored vehicles to rifles to radar systems. Leszkiewicz acknowledged the paradox: what makes the company strong can also be a weakness.

> I could say we make almost everything. But what can be a strength can also be a weakness.
## Poland's defense spending surges
Russia's annexation of Crimea in two thousand fourteen and its full-scale invasion of Ukraine in two thousand twenty-two transformed Polish defense priorities.
## Billions in contracts flow to PGZ
In May, Poland's Armaments Agency signed almost one hundred twenty billion złoty in contracts with Polish arms companies financed by the EU's SAFE program.
## Most PGZ deals bypass competitive bidding
Most of the contracts with PGZ were no-bid contracts, according to a report by the Warsaw Enterprise Institute think tank.

> The development of the Polish defense industry is necessary, but it should not automatically mean preferential treatment for companies directly controlled by the government.
## Poland still relies heavily on imports
About sixty percent of Poland's defense spending goes on imports, mainly from South Korea and the United States, including K2 Black Panther tanks and F-35A fighter jets.
## PGZ aims for European top ten
In two thousand twenty-five, PGZ reported eighteen point four billion złoty in revenues, a twenty-three percent increase, and two point eight billion złoty in profit, a sixty-six percent increase.
## Political threats loom over PGZ
Polish state-controlled companies face high political interference.Former Prime Minister Mateusz Morawiecki called for PGZ to be dissolved, accusing it of weak management.
## CEO's job security uncertain
Leszkiewicz, who was a junior member of Tusk's government from two thousand seven to two thousand eleven, could face removal if right-wing parties win next year's election.

> A CEO would have to be in the job for a decade, but in Polish realities there is no chance of that.
## Key takeaway

Poland is directing billions in defense contracts to state-owned PGZ to strengthen its domestic arms industry, but the company's unwieldy structure and political exposure create risks.