WARSAW — Poland wants domestic companies to supply more of its rapidly expanding military, but state-owned PGZ’s fragmented structure and political exposure raise questions about whether Warsaw can turn the spending surge into a stronger industry.
The Polish Armaments Group, the country’s largest defense company, has won billions of złoty in new orders, placing it at the center of the military buildup.
The conglomerate was cobbled together in 2013 from about 50 fiercely independent smaller companies with their own management teams and often their own political backers. CEO Adam Leszkiewicz has been in the post since May 2025 — making him the holding company's 12th CEO since its founding.
"PGZ is different from other European companies," Leszkiewicz said, adding that PGZ makes more than 700 products. "I could say we make almost everything. But what can be a strength can also be a weakness."
Marek Świerczyński, a defense analyst with the Warsaw-based Polityka Insight Center for Policy Analysis, said: “He essentially has to use diplomacy to try to manage the other companies.”
Legacy defense industry
For decades after the end of communism, Poland spent little on defense and the military largely made do with antiquated Soviet-era equipment. Russia’s illegal annexation of Crimea in 2014 and its full-scale invasion of Ukraine in 2022 changed that, and Polish defense spending surged.
“We have strong historical and current experience with armored vehicles and maintenance, repair and overhaul services,” said Leszkiewicz. “We also make wheeled vehicles such as the Jelcz, and our work on sensors and radar is developing well. We have long been strong in rifles and pistols.”
Aleksandra Kozioł, a defense analyst with the Warsaw-based Polish Institute of International Affairs, pointed out other notable Polish defense companies, such as the private WB Group, which specializes in communications networks, unmanned aerial vehicles, loitering munitions and fire control solutions.
“We want to improve in new technologies, especially unmanned vehicles as well as software and IT solutions,” Leszkiewicz said.
PGZ is also building ties with other European defense firms. It is building three new artillery shell factories in conjunction with the U.K.'s BAE Systems. PGZ's Narew air defense system includes a tie-up with MBDA to supply missiles and launchers.
“Either we take advantage of this opportunity, or we let this period of rapid industrial development in defense pass. We have ambitions and want to fulfill them,” Leszkiewicz said.
Keeping the cash at home
This year, Poland aims to spend 200 billion złoty (€45.7 billion) — or 4.8% of GDP — on defense, the highest level in NATO. It is also the largest recipient of the EU’s €150 billion SAFE loans-for-arms program, taking in almost €44 billion.
The government is trying to ensure that the country’s defense industry gets a growing share of the new spending.
In May, Poland's Armaments Agency signed almost 120 billion złoty in contracts with Polish arms companies financed by SAFE. A large share went to PGZ and its subsidiaries, mainly Huta Stalowa Wola, for equipment including 146 Borsuk infantry fighting vehicles, 96 Krab howitzers, 64 Rak mortars, K9PL support vehicles and 1,000 vehicles for the Homar-K rocket-launcher system.
Most of the deals 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," the report said.
Defense Minister Władysław Kosiniak-Kamysz last month underlined that the government aims to develop the country's military-industrial complex, saying: “We are building a strong army, strengthening security, and investing in Poland's future.”
But favoring domestic companies risks clashing with the government's drive to rearm as quickly as possible; Warsaw wants to buy tanks, jets and missiles to deter Russia, although that goal does pose problems for its domestic arms industry.
About 60 percent of Poland’s defense spending goes on imports, “and that won’t change quickly,” said Świerczyński. Most arms imports come from South Korea and the United States, including systems like K2 Black Panther tanks and F-35A fighter jets.
“In 2022, we were looking for ready-made solutions and products because we felt threatened,” said Leszkiewicz. “Today, we are trying to take every opportunity to Polonize production. We are now hardly buying ready-made products, except where we really lack a particular capability.” One of PGZ's subsidiaries will be building K2 tanks starting in 2028.
"I do see an effort to increase Polish intellectual property," said Kozioł, the defense analyst, adding that it's still unclear if the government's effort to shift contracts to Polish firms will lessen the reliance on foreign technology.
In 2025, PGZ reported 18.4 billion złoty in revenues, a 23% increase on the previous year, and 2.8 billion złoty in profit, a 66% increase. The company ranked 51st in the Stockholm International Peace Research Institute's 2025 list of the world's top 100 defense companies.
"We aim to reach the top 10 in Europe and the top 30 globally," said Leszkiewicz.
"If we look at PGZ's development and results, it appears that, despite political issues, the company is trying to fulfill the task of arming the Polish military," said Kozioł.
Political risk
Polish state-controlled companies are notorious for high levels of political interference. Although Kozioł underlined that there is a cross-party consensus in favor of continued high defense spending, PGZ does face political risks.
Mateusz Morawiecki, prime minister from 2017 to 2023 under the previous Law and Justice Party government, this summer called for PGZ to potentially be dissolved, accusing it of “weak” management.
Kosiniak-Kamysz fired back, calling the idea “harmful and anti-state.”
