WARSAW, November 12, 2026 — Poland is directing a growing share of its defense spending to domestic companies, placing the state-owned Polish Armaments Group at the center of Europe’s largest military buildup since the Cold War. The conglomerate has secured billions of zlotys in new orders, but its fragmented structure and political exposure raise questions about how effectively it can turn the spending surge into a stronger industry.
The Holding Company and Its History
The Polish Armaments Group, known as PGZ, was cobbled together in 2013 from about 50 fiercely independent smaller companies with their own management teams and often their own political backers. The consolidation, completed in 2015, brought eight companies previously controlled by Polski Holding Obronny under the PGZ umbrella. Headquartered in Radom, the group now comprises over 50 subsidiaries and holds shares in 32 others active in defense, shipbuilding, and new technologies. In 2024, PGZ ranked 51st globally among arms companies by revenue, according to SIPRI.
Lead companies are divided into five domains: land, weapons and ammunition, C4ISR, air, and naval. The land domain includes Huta Stalowa Wola, producer of the Krab self-propelled howitzer and Rosomak armored personnel carrier, and Jelcz, manufacturer of heavy-duty military trucks. The weapons and ammunition domain covers Mesko, Nitro-Chem, and the Radom-based Fabryka Broni “Łucznik.” The C4ISR domain includes PIT-RADWAR, a radar and sensor specialist. The air domain encompasses the Central Military Bureau of Design and Technology and aircraft repair plants, while the naval domain is represented by PGZ Stocznia Wojenna.
Leadership Turnover and Current Management
Adam Leszkiewicz has been PGZ chief executive since May 2025, making him the holding company’s 12th CEO since its founding. The turnover underscores the difficulty of managing a conglomerate built from entities accustomed to operating independently. Leszkiewicz acknowledged the structural challenge in recent remarks, noting that PGZ makes more than 700 products. “I could say we make almost everything,” he said. “But what can be a strength can also be a weakness.” Sources familiar with the holding’s operations say the CEO essentially has to use diplomacy to manage the subsidiary companies.
The Order Book and State Investment
The scale of new business is substantial. In 2024, PGZ signed a 11 billion zloty contract with the Ministry of National Defence to produce 300,000 155 mm artillery shells. In July 2025, the group received a 565 million euro investment from the state-owned Capital Investment Fund to build three new ammunition factories, a project intended to make Poland a center of European NATO arms production. Those factories are being built in partnership with the U.K.’s BAE Systems.
In May, the Armament Agency signed contracts worth nearly 120 billion zlotys with Polish defense companies, financed under the European Union’s SAFE program. A significant share went to PGZ and its subsidiaries, particularly Huta Stalowa Wola. The contracts cover 146 Borsuk infantry fighting vehicles, 96 Krab self-propelled howitzers, 64 Rak mortars, K9PL support vehicles, and thousands of vehicles for Homar-K missile systems. According to the Warsaw Enterprise Institute, most of the agreements with PGZ were concluded without competitive procedures.
Poland plans to spend 200 billion zlotys, or 4.8 percent of GDP, on defense this year, the highest figure among NATO countries. The country has also become the largest recipient of SAFE loans for armaments from the EU’s total 150 billion euro fund, expected to receive nearly 44 billion euros. In 2025, PGZ reported 18.4 billion zlotys in revenue and 2.8 billion zlotys in profit, increases of 23 percent and 66 percent respectively over the prior year.
Manufacturing Capacity and Bottlenecks
Despite the influx of orders and capital, structural bottlenecks persist. The conglomerate’s origins — 50 independent companies folded into a single holding — left a legacy of duplicated management layers and divergent political patronage networks. Analysts note that the holding structure requires the CEO to negotiate with subsidiary leaders rather than direct them, slowing decision-making on production scaling.
Supply chain reliance remains heavy. Around 60 percent of Poland’s defense spending still goes toward imports, according to Marek Świerczyński, an analyst at the Warsaw-based Polityka Insight Center for Policy Analysis. The main suppliers remain South Korea and the United States, from which Poland purchases K2 Black Panther tanks and F-35A fighter jets. South Korea’s Hanwha Aerospace broke ground in November on a 4.2 billion dollar guided missile plant in Głogów Wielkopolski, a joint venture with Polish private firm WB Group, with initial production targeted for late 2029 and mass production in 2030.
PGZ is pursuing its own localization partnerships. The group is cooperating with MBDA on the Narew air defense system, and one subsidiary is expected to begin producing K2 tanks in 2028 under a technology transfer agreement with Hanwha. The group also aims to improve in new technologies, especially unmanned vehicles, software, and IT solutions, areas where private competitor WB Group has established a lead in communications networks, unmanned aerial vehicles, and loitering munitions.
What It Means Now
The government seeks to develop the national military-industrial complex, but the Warsaw Enterprise Institute has stressed that development should not automatically mean preferences for enterprises directly controlled by the state. The tension between urgent rearmament timelines and the slow work of industrial localization defines PGZ’s immediate challenge. The record shows a holding company with a deep order book, fresh capital, and a 12th CEO attempting to align over 50 subsidiaries toward a single production surge. The next benchmark arrives in 2028, when the first K2 tanks are slated to roll off a Polish line and the three BAE-partnered ammunition factories are scheduled to come online.
Sources
- Poland turns to home-grown giant for its defense buildup
- Polska Grupa Zbrojeniowa
- Poland relies on PGZ in its defense buildup | Межа
- Hanwha Aerospace Breaks Ground on $4.2 Billion Chunmoo Missile Plant in Poland, Establishing European Production Hub — BigGo Finance
- Poland signs defense contracts worth nearly 120 billion zlotys — Politico
- Poland to transfer 2 MiG-29 jets to Ukraine in exchange for drone technology, Polish official says
Photo: Kubsson94 (CC BY-SA 4.0)
