Arms generate roaring revenues
21. 1. 2016 | Source: BusinessInfo.cz
Growing tensions in Europe and worldwide drive up demand for Czech weapons.
The domestic defence and security industry is capitalising on rising demand for its output. Its revenues climbed for three successive years between 2012-2014 and the indications are that the growth trend grew even stronger last year. The industry and trade ministry has not yet put together exact figures, but preliminary estimates suggest that in 2015 arms export revenues approached CZK 14bn, compared to 2014's CZK 11.8bn.
"If I don't take into account big contracts struck three to five years ago, sales of our products last year compared to the previous year grew by around 17 percent," Lubomír Kovařík, managing director of firearms manufacturer Česká zbrojovka Uherský Brod, told E15. "But I don't believe, however, that this was somehow substantially related to the migrant crisis," he added. The strongest interest in the company's output was in the US, Kovařík said.
After years of austerity, the Czech and Slovak armed forces have started to invest more in acquiring pistols, rifles, fleets of military vehicles, armoured personnel carriers and aircraft. In 2015, Česká zbrojovka Uherský Brod experienced 35 percent growth in domestic demand year on year, while the figure for Slovakia was 50 percent. The company closed an agreement with the Czech defence ministry worth CZK 476m and a contract with the Slovak police valued at CZK 383m.
Not getting left behind is Sellier & Bellot, an ammunition producer based in Vlašim, central Bohemia. Such is demand, it has taken on 300 new employees. Income is also climbing at Pardubice-based explosives maker Explosia.
Tatra Trucks, located in Kopřivnice, Moravia-Silesia, has reported strong production growth. In the year before last it manufactured 821 vehicles, sold 850 and saw revenue streams amount to CZL 3.7bn. Last year, 900 trucks came off its production lines, including various specialised vehicles for clients including the Jordanian army. Sales during 2015 exceeded 900 units. This year, Tatra is planning to produce 1,300 vehicles.
One of Tatra's biggest customers is Saudi Arabia, where last year at the Tatra assembly plant 200 units were put together. In India, the first part of a contract for 450 vehicles has been signed, and an order for 700 is set to follow.
Among civilians, interest in small arms has apparently grown following the onset of the migrant crisis. The interior ministry said the number of legally held new weapons in the hands of civilians has risen to 40,000. That contrasts with the 60,000 officially owned by citizens of Austria. "When it comes to sales, every year we see the same pattern, with strong spring and autumn seasons and weaker summer and winter seasons," noted Kovařík, boss of Česká zbrojovka Uherský Brod.