Sunday, March 3, 2024

As war intensifies in Ukraine, Denmark turns office park back into arsenal

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The old Krutten ammunition factory near Denmark’s northernmost tip is a sleepy factory that has remained empty for years, despite its heritage of churning out bullets, artillery and explosives for the Danish military.

But that’s about to change. As demand for Western weapons increases due to the war in Ukraine, the Danish government has decided to revive its role in the ammunition business.

In 2008, amid widespread defense cuts across Europe and global economic turmoil, Denmark sold Krutten, the military’s main munitions factory. It remained in circulation among private companies until the government decided to buy it back in October, increasing its focus on weapons production and becoming one of the latest countries to challenge Russia’s rapidly expanding arms industry.

“It was extremely important to get this factory,” Danish Defense Minister Troels Lund Poulsen said in an interview this month, noting that “the demand for ammunition is increasing” across Europe.

“We should be concerned because Russia is increasing production of ammunition and other military equipment,” Poulsen said. “That is why we have decided in the European Union that we must support countries in doing everything they can to increase production.”

Officials from NATO countries have warned that Ukraine will receive weapons early next year, as Congressional Republicans have blocked additional U.S. military aid and Hungary has vetoed a new financial aid package from the European Union. There are concerns that this could lead to depletion. The rapid growth of Russia’s arms industry is causing obvious anxiety within NATO. Not only did it help thwart Ukraine’s six-month counteroffensive, but it is also a sign of Russia’s growing power.

As a result, European countries are looking for ways to increase their own weapons production, including through deregulation and investment incentives.

In Krutten, which means “gunpowder” in Danish, authorities want to hire private companies to produce ammunition at state-run factories. The factory is housed in a dilapidated brick building on a large rural campus.

It’s a model similar to military ammunition production in the United States, with factories owned by the government but operated by private contractors with federal funding to quickly respond to market demand.By early next year, the United States will projected Monthly production of 155 mm ammunition has more than doubled to 36,000 rounds from 14,000 rounds when Russia invaded Ukraine in February 2022.

But in Europe, with its diverse economies, budget constraints, and varying government regulations for the defense industry, there is no single standard for partnering with weapons manufacturers. To speed up approvals, the European Union is offering financial incentives to countries that jointly order large quantities of ammunition and is also considering easing regulations that industry executives say are holding back production.

The attempt to forge closer ties between the government and manufacturers comes as the EU’s campaign to provide Ukraine with one million 155mm bullets within 12 months is expected to fail. With four months left until the March deadline, authorities have secured less than half of the shells promised. This is because European capital is reluctant to invest in weapons production companies that require more resources and have fewer supply chain bottlenecks.

“Overall, our means of cooperation are still below their potential,” European Commission President Ursula von der Leyen said at the European Defense Agency’s annual conference late last month.

He suggested that if increased defense spending contributed to an increase in budget deficits, EU sanctions could be waived against countries with ballooning national deficits. “At this extraordinary time, this could be a major change for the union’s defense and military industry policy,” Ms von der Leyen said.

It is likely to be an uncomfortable adjustment for both government and industry.

“I’m not a big fan of government-owned production, but for me the basic idea is that there is extreme demand there and there is not enough production capacity,” said director of the Danish Defense and Security Industry Association. said Joachim Finkielmann. .

Denmark currently obtains military ammunition from foreign producers, he said. Once the Krutten factory is up and running (which could take about two years), “for this to function as a business, we will need to ensure that we can produce enough ammunition to supply the Danish military and export to overseas customers. It’s an opportunity that the government needs to invest heavily in,” Finkielman said.

“I think the idea of ​​government intervention is an interesting step, both in terms of signaling political intent to establish a market and actually providing this factory for industrial use,” he said.

The Finnish Ministry of Defense announced this month that it will double its production capacity for various heavy ammunition calibers and explosives by the end of 2027. At least some of the work will be completed under a $131 million contract that includes $26 million from the government. The incident occurred at a small arms factory run by Nammo, a Norwegian-based ammunition company in which Finland indirectly owns a stake.

“With this decision, we want to demonstrate our long-term commitment to supporting Ukraine and strengthening its defense industry,” Finnish Defense Minister Antti Hakkanen said in a statement.

The desire to work more closely with industry appears to be strongest in the states closest to Russia’s borders. Some countries in Eastern Europe, including Poland, Bulgaria, and Romania, own at least some of their own ammunition producers.

Still, manufacturers across Europe have repeatedly argued that meeting the vastly increased demand for arms from the Ukraine war will take more time and money than most governments are willing to commit to.

This is in stark contrast to Russia. In Russia, the economy is controlled by President Vladimir V. Putin’s government and its loyalist oligarchs, who can order the diversion of raw materials and labor from private manufacturers to the arms industry. In the past two years, Russia has increased its monthly production of long-range missiles from about 40 in February 2022 to more than 100, according to Justin Bronk, a senior researcher at the Royal United Services Institute, a British research institute. That’s what it means. .

Production of artillery shells has also nearly doubled, and Bronk said Russia’s arms industry will “increase significantly” over the next two to three years, even as Western countries wonder whether to increase military aid to Ukraine. expected. Almost a third of Russia’s spending next year, or about $109 billion, will go to the military. And experts say that for the first time in modern history, Russia will spend 6 percent of its gross national product on the military, more than twice as much as before the invasion.

Estonia’s Interior Minister Lauri Rahnemets said this month that “all of our economy is now spent on producing weapons, producing weapons.” “Manufacturers that used to make canned products are basically making bullets these days.”

Ukraine, once a major arms supplier to Moscow’s military when it was part of the Soviet Union, is trying to build up its own flagging arms industry.

It has begun partnerships with weapons manufacturers from Britain, Germany and other countries, and senior Ukrainian officials met with U.S. officials in Washington this month, and Ukrainian President Volodymyr Zelenskiy said “there is a possibility of starting defense projects of national importance.” They held talks aimed at promoting production and trade agreements. It protects the safety of all of Europe. ”

But Mr. Putin appears to be counting on reduced Western aid to win the war, White House national security adviser Jake Sullivan said in an interview.

“He has been very public about his belief that if military aid from the United States were to stop, Russia would defeat Ukraine,” Sullivan said. “I think Ukraine is going to stand up and fight no matter what, but the lack of a continued supply of U.S. ammunition and capabilities will severely limit and reduce its ability to move forward and defend itself.”

In Denmark, officials would not say how much ammunition the Krutten factory was expected to produce or how much it made before being sold to Spain’s Expal in 2008. , Expal was acquired by German military giant Rheinmetall in August.

The Krutten factory was sold to a Danish group in 2020, and the site was turned into an office park. When the factory went up for sale this spring, the Danish government bought it to ensure it would only be used to make ammunition.

Denmark paid Krutten approximately $2.8 million, which was $200,000 more than his 2008 sale price. It would also cost millions of dollars to renovate buildings and possibly purchase assembly line equipment.

Poulsen, the Danish defense minister, said he is not aware of any other NATO country that has purchased manufacturing facilities to produce more ammunition.

“We found that there were serious problems with the production of ammunition,” Poulsen said. “Now Denmark is trying to do what we can.”

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