Franco-German KNDS launches Ukrainian subsidiary to support Leopard tank repairs and 155mm artillery production.

On October 1, 2024, the Franco-German defense group KNDS launched a subsidiary in Ukraine, expanding its collaboration with the country amid the ongoing conflict. The new entity, KNDS Ukraine LLC, aims to establish maintenance, repair, and production capabilities for equipment such as Leopard tanks and Caesar self-propelled howitzers currently deployed in Ukraine. This move includes plans to produce 155mm artillery shells and spare parts using technologies like 3D printing within the next year, with potential expansion to manufacturing entire systems in Ukraine in the future.
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Ukraine currently operates 386 pieces of KNDS equipment such as the Leopard 1 and 2 main battle tanks, the Caesar and PzH 2000 self-propelled howitzers, the AMX10 RC tank destroyer, and the Gepard self-propelled anti-aircraft gun, with orders for an additional 250 units. (Picture source: Ukrainian 47th Mechanized Brigade)

As of June 7, 2024, according to KNDS Chairman Philippe Petitcolin, Ukraine operates 386 pieces of KNDS equipment such as the Leopard 1 and 2 main battle tanks, the Caesar and PzH 2000 self-propelled howitzers, the AMX10 RC tank destroyer, and the Gepard self-propelled anti-aircraft gun, with orders for an additional 250 units. To support this fleet, KNDS is partnering with Ukrainian firms, signing letters of intent with ENMEK for a Caesar cannon maintenance center and KZVV for 155mm shell production. Ukrainian personnel will handle Caesar's maintenance using parts shipped from France, eliminating the need for French technicians.

This initiative aligns with broader international efforts to strengthen Ukraine's defense capabilities, as over 40 nations have participated in the Ukraine Defense Contact Group to accelerate defense resource delivery. These countries have mapped global production capacities to expand ammunition and equipment supplies. France and Sweden plan to double their ammunition and explosives production capacity by 2025 and increase powder production by 2026. Meanwhile, Germany, Spain, Hungary, South Africa, and Australia plan to produce 700,000 artillery shells and 10,000 tons of gunpowder annually by 2025.

KNDS's involvement is part of wider international defense investments in Ukraine. Germany's Rheinmetall signed a letter of intent to establish a KF41 Lynx armored vehicle production facility in Ukraine, and Norway's Nammo announced plans to license the production of 155mm rounds. These collaborations aim to localize defense production and ensure Ukraine’s capability to maintain and produce essential military equipment.

The German company Rheinmetall plans to provide several hundred Lynx vehicles to Ukraine, which will include training, maintenance, and repair services. (Picture source: Army Recognition)

Complementing these investments, France plans to train a brigade of 2,100 Ukrainian soldiers, supporting Ukraine's goal of preparing 15 to 20 brigades. Earlier in 2023, Sweden donated 50 CV90 infantry fighting vehicles to Ukraine and later, Sweden, Netherlands and Denmark signed a letter of intent to finance and deliver more CV90s. Denmark committed $264 million to this effort, while Sweden will manage the acquisition and delivery of vehicles produced by BAE Systems Hägglunds. These agreements also include future cooperation for CV90 production and servicing in Ukraine, potentially leading to joint manufacturing.

In September 2023, the French company Arquus partnered with Ukraine to establish a repair workshop focusing on maintaining French-made Véhicules de l'Avant Blindés (VAB) armored vehicles, part of France's military aid, which also includes Caesar 6x6 self-propelled howitzers and SCALP missiles.

Several defense companies have launched subsidiaries or initiated licensed production in Ukraine to support its defense industry. Rheinmetall opened a joint production facility with Ukrainian state-owned defense enterprise Ukroboronprom, including a workshop for armored vehicle repair and manufacturing. Rheinmetall plans to produce various equipment, including air defense systems, armored vehicles, and ammunition, aiming to supply the Ukrainian army and estimating potential annual revenue of $2-3 billion from its Ukrainian operations.

Rheinmetall plans to produce various equipment, including air defense systems, armored vehicles, and ammunition, aiming to supply the Ukrainian army and estimating potential annual revenue of $2-3 billion from its Ukrainian operations. (Picture source: Ukrainian MoD)

The European Union opened a defense innovation office in Kyiv in 2024 to enhance cooperation between Ukrainian and European defense industries, connecting European startups and innovators with Ukraine's defense industry. Latvia's Atlas Aerospace established an R&D office, and Germany's Quantum Systems opened a factory and development hub in Kyiv in April 2024.

Northrop Grumman became the first U.S. defense company to finalize a co-production agreement with Ukraine, focusing on medium-caliber ammunition. The company will provide equipment and remote training to a local workforce, aiming to expand production to include tank ammunition and 155mm shells.

Denmark plans to establish a defense-industry hub in Kyiv, aiming to facilitate collaboration between Danish and Ukrainian defense firms, expected to be operational before the end of the year.

The Mbombe 6 infantry combat vehicle, produced under a licensing agreement between South Africa's Paramount Group and a Ukrainian company, has been observed in service with Ukraine's 10th Separate Mountain Assault Brigade. (Picture source: Ukrainian MoD)

Ukraine is also working on the production and licensing of military vehicles and equipment with international companies. The Mbombe 6 infantry combat vehicle is produced under a licensing agreement between South Africa's Paramount Group and a Ukrainian company and has been observed in service with Ukraine's 10th Separate Mountain Assault Brigade. As of May 2024, there is no confirmed contract for full-scale production, but interest remains high due to the vehicle's capabilities.

Collaborations extend to small arms and ammunition production. Ukraine partnered with the Czech Republic to localize CZ BREN 2 rifle production and set up an ammunition factory with Sellier & Bellot. These rifles, branded as Sich, are already in use by Ukrainian soldiers as part of efforts to bolster Ukraine's arms manufacturing capabilities.

Furthermore, Ukraine has developed the capacity to produce local versions of U.S.-origin vehicles. Indigenous versions of the Humvee, M113 armored personnel carrier, and MaxxPro MRAP vehicles have been created, branded as Sikach, Kharakternyk, and Lys, respectively, enabling Ukraine to maintain a steady supply of critical military equipment and reduce reliance on external sources.

Ukrainian versions of the Humvee, M113 armored personnel carrier, and MaxxPro MRAP vehicles have also been created, branded as Sikach, Kharakternyk, and Lys, respectively. (Picture source: Ukrainian Front and Oboz.UA)