In a country that spent decades rebuilding its defense from aging Soviet inheritance, Poland now pours nearly five percent of its economy into arms, and much of that money flows through a single state conglomerate, PGZ, whose chief executive must coax together some fifty companies stitched into one structure in 2013. The ambition is to make Polish hands build what Polish soldiers need, yet most of the spending still leaves the country, and the arrangement rests on contracts awarded without open competition. Whether this surge becomes an enduring national industry or a politically shaped depend
Poland Bets on State Giant PGZ to Arm Its Military, But Its Fragmented Structure Poses Risks
Twelve CEOs in a company stitched together from about 50 firms
Mark
Why does PGZ's structure matter so much for a story about spending?
Mimi
Because it was stitched together from about 50 companies in 2013, each with its own management and sometimes its own political patrons. The CEO is described as managing by diplomacy, and this one is the 12th since the founding.
Mark
That's a lot of turnover.
Mimi
It is, and it suggests how hard the job is to hold. Leszkiewicz himself calls the breadth of 700 products both a strength and a weakness.
Luke
Careful with the word 'suggests.' Twelve CEOs is a fact. Why they left isn't in the reporting.
Mark
Fair. What about the no-bid contracts?
Mimi
A Warsaw Enterprise Institute report says most of the PGZ deals in the May batch were no-bid. It warns against automatic preferential treatment for state-controlled firms.
Luke
That's one think tank's finding. The piece doesn't say the government disputes it, but it doesn't give a government answer on that point either. The defense minister's quoted remarks are about building the industry generally.
Mark
And the speed-versus-domestic tension?
Mimi
About 60 percent of spending still goes to imports, mostly from South Korea and the US. Yet a PGZ subsidiary will build K2 tanks from 2028.
Luke
Whether that actually cuts foreign reliance is unknown. The analyst quoted says it's unclear, and that's the honest state of play.
Mark
And the strong 2025 numbers?
Mimi
Revenue of 18.4 billion złoty and profit of 2.8 billion, which the company reported itself. Those are company-reported figures, and the ambitions of a top-10 European ranking are goals, not outcomes.
The Pulse
- A record defense budget of 4.8% of GDP is pouring into a state conglomerate that was stitched together from fifty rival firms, each with its own political patrons.
- Roughly 60% of spending still leaves Poland for foreign suppliers, pressing against the government's push to Polonize production.
- Most major PGZ contracts were awarded without competitive bidding, drawing criticism that favored firms are being shielded from the market.
- Former prime minister Morawiecki floated dissolving PGZ over weak management, and the defense minister answered that the idea was harmful, turning the company into a live political battleground.
- Leadership is working to deepen domestic capability in unmanned systems, software and artillery, with a K2 tank line due from 2028, and the outcome hinges on whether that shift actually reduces foreign dependence.
In a country that spent decades rebuilding its defense from aging Soviet inheritance, Poland now pours nearly five percent of its economy into arms, and much of that money flows through a single state conglomerate, PGZ, whose chief executive must coax together some fifty companies stitched into one structure in 2013. The ambition is to make Polish hands build what Polish soldiers need, yet most of the spending still leaves the country, and the arrangement rests on contracts awarded without open competition. Whether this surge becomes an enduring national industry or a politically shaped dependency will be decided as much by the sway of parties and their quarrels as by factory output.
Adam Leszkiewicz runs a company that makes more than seven hundred products, and he sees that range as both strength and burden. Since May 2025 he has led the Polish Armaments Group, PGZ, the largest defense firm in Poland, and he is its twelfth chief executive since the holding was founded. It was assembled in 2013 from around fifty smaller companies, each with its own management and often its own political backers, so running it depends heavily on diplomacy.
The money behind it is enormous. Poland plans to spend about 200 billion złoty on defense this year, the highest share of GDP in NATO, and it is the largest recipient of the EU's SAFE loans for arms. After decades of relying on Soviet-era equipment, Russia's annexation of Crimea and full-scale invasion of Ukraine turned that neglect into urgency. In May the Armaments Agency signed nearly 120 billion złoty in contracts with Polish companies, with a large portion going to PGZ and its subsidiaries, including vehicles, howitzers and rocket systems.
The strategy carries a tension. Buying abroad is quicker, and about 60 percent of spending still goes to imports, mainly from South Korea and the United States. Leszkiewicz says the goal has shifted from buying ready-made products to building them in Poland wherever possible, though analysts question whether this will truly reduce dependence on foreign technology. Critics also note that most PGZ deals were no-bid, a practice that raises questions about favoritism.
PGZ's financial results are strong, with 2025 revenue up 23 percent and profit up 66 percent. Yet its political exposure remains the open risk. This summer former prime minister Morawiecki suggested dissolving the company over weak management, and Defense Minister Kosiniak-Kamysz called that idea harmful. Whether Poland's rearmament builds a lasting domestic industry, or becomes a campaign fight, is still undecided.
Adam Leszkiewicz runs a company that makes more than 700 different products. He describes that range as both an asset and a liability, and the second half of that description is the one that matters. Leszkiewicz has led the Polish Armaments Group, known as PGZ, since May 2025. He is its 12th chief executive since the holding was founded.
PGZ is Poland's largest defense company, and it sits at the center of the country's military buildup. It was assembled in 2013 from about 50 smaller companies. Each had its own management, and many had their own political backers. Marek Świerczyński, a defense analyst at the Warsaw-based Polityka Insight Center for Policy Analysis, says the result is that the chief executive essentially has to use diplomacy to manage the companies under him.
The money is large. Poland aims to spend 200 billion złoty (€45.7 billion) on defense this year, or 4.8% of GDP, the highest share in NATO. It is also the biggest recipient of the EU's €150 billion SAFE loans-for-arms program, with almost €44 billion. For decades after communism, Poland spent little on defense and relied largely on aging Soviet-era equipment. Russia's annexation of Crimea in 2014 and its full-scale invasion of Ukraine in 2022 reversed that.
The government wants more of that money to stay at home. In May, the Armaments Agency signed almost 120 billion złoty in SAFE-financed contracts with Polish arms companies. A large share went to PGZ and its subsidiaries, mainly Huta Stalowa Wola. The orders cover 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. According to a report by the Warsaw Enterprise Institute think tank, most of the PGZ deals were no-bid contracts. The report said industry development is necessary but should not automatically mean preferential treatment for firms the government controls directly.
There is also a tension in the strategy. Poland wants to rearm quickly to deter Russia, and buying from abroad is faster. About 60 percent of defense spending still goes on imports, and Świerczyński says that won't change quickly. Most come from South Korea and the United States, including K2 Black Panther tanks and F-35A jets. Leszkiewicz says the posture has shifted since 2022, when Poland sought ready-made products because it felt threatened. Now, he says, the aim is to Polonize production wherever possible, and ready-made purchases are limited to real capability gaps. One PGZ subsidiary will build K2 tanks from 2028. Aleksandra Kozioł of the Polish Institute of International Affairs sees an effort to increase Polish intellectual property, but says it remains unclear whether shifting contracts will reduce reliance on foreign technology.
PGZ's strengths are in armored vehicles and maintenance, repair and overhaul work, wheeled vehicles such as the Jelcz, sensors and radar, and rifles and pistols. It wants to grow in unmanned vehicles, software and IT, areas where Kozioł notes private firms such as WB Group already work, in communications networks, drones, loitering munitions and fire control. PGZ is building partnerships too: three new artillery shell factories with Britain's BAE Systems, and a tie-up with MBDA for missiles and launchers in its Narew air defense system.
The financial results are strong. In 2025 PGZ reported revenue of 18.4 billion złoty, up 23%, and profit of 2.8 billion złoty, up 66%. It ranked 51st on SIPRI's 2025 list of the world's top 100 defense companies. Leszkiewicz wants it in Europe's top 10 and the global top 30. Kozioł says that despite political issues, the company appears to be fulfilling its task of arming the military.
The politics are the open risk. Polish state-controlled companies are known for political interference, though Kozioł notes a cross-party consensus on high defense spending. This summer, former prime minister Mateusz Morawiecki, who led the previous Law and Justice government from 2017 to 2023, suggested PGZ might be dissolved, citing weak management. Defense Minister Władysław Kosiniak-Kamysz called the idea harmful and anti-state. What to watch is whether the Polonization push loosens Poland's dependence on foreign technology, and whether PGZ's future becomes a campaign fight.
Notable Quotes
What can be a strength can also be a weakness.— Adam Leszkiewicz, PGZ CEO, on the company's 700-product breadth
Morawiecki's idea of dissolving PGZ was harmful and anti-state.— Defense Minister Władysław Kosiniak-Kamysz (paraphrased)
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