The UK’s largest defence company, BAE Systems, has announced that it has established a legal entity in Ukraine and signed agreements with the Ukrainian government to help increase its supply of weapons and equipment to the country. The move comes amid the ongoing war with Russia, which invaded Ukraine in February 2022.
BAE Systems to explore local production of light artillery
According to a company statement, BAE Systems will work directly with Ukraine to explore potential partners and opportunities for the local production of 105mm light artillery guns. The company said that this would enable it to provide more direct support to the Ukrainian armed forces and enhance their capabilities.
BAE Systems is already providing training and repair services to Ukraine’s military, as well as supplying various equipment and systems. The UK is a key defence partner for Ukraine and in May became the first country to start providing Kyiv with long-range cruise missiles.
The Ukrainian president, Volodymyr Zelenskiy, welcomed the announcement and said that the development of Ukraine’s own weapons production was a top priority. He tweeted that “the best weapons that are currently helping our warriors defend Ukraine should be produced in Ukraine”.
BAE Systems to collaborate with Sweden on armoured vehicles
In addition to the agreements with Ukraine, BAE Systems also signed a statement of intent with Sweden to strengthen cooperation in the production, operation, training and servicing of the CV90 family of armoured vehicles. The CV90s are currently produced by BAE Systems’ Hägglunds business in Sweden and are used by several countries, including Norway, Denmark, Finland and Estonia.
The statement of intent aims to facilitate the transfer of technology and expertise between the two countries and create opportunities for joint projects and exports. BAE Systems said that it was committed to supporting Ukraine’s defence industry and contributing to its economic growth.
BAE Systems to benefit from increased defence spending
The establishment of a local entity in Ukraine and the signing of the agreements reflect BAE Systems’ strategic interest in expanding its presence and influence in Eastern Europe. The company has seen its share price rise by more than 75% since February 2022, when Russia launched its invasion of Ukraine.
The conflict has prompted many countries, especially NATO members, to increase their defence spending and seek new weapons and equipment to counter Russia’s aggression. BAE Systems, which is Europe’s biggest defence contractor with annual sales of more than £23bn and almost £2.5bn in profits last year, is well-positioned to benefit from this trend.
The company employs 93,000 people in about 40 countries around the world and produces a wide range of products, from fighter jets and submarines to cyber security and intelligence services.
