Europe’s push to build weapons for Ukraine has been stalled by a shortage of explosives, which industry insiders fear will delay efforts to ramp up shale production by up to three years.
Scarce supplies of gunpowder, plastic explosives and TNT have left the industry unable to quickly meet expected EU orders for Ukraine, officials and producers say, no matter how much money is thrown at the problem.
The supply chain disruptions underscore how Russia’s invasion of Ukraine has badly exposed Europe’s inadequate arms stocks and weak domestic manufacturing capacity, fueled by decades of underinvestment.
“The fundamental problem is that the European defense industry is not in a good condition for large-scale war production,” said a German official.
Europe is trying to meet Kiev’s war-fighting needs by pumping cash into the defense sector, particularly to encourage the expansion of 155 mm artillery production. Ammunition is desperately needed to restock the national arsenal and maintain supplies to Ukrainian forces.
But producers, industry executives and EU officials have warned that increased demand could only push up prices, which have risen by a fifth over the past year.
“It is very difficult to increase the production of artillery ammunition, especially heavy, large-caliber weapons in a short period of time,” said Jiri Hynek, president of the Czech Republic’s Association of Defense and Security Industries. “A new artillery factory is very easy, but how to produce more artillery projectiles without raw materials?”
The comments came ahead of a meeting of EU foreign and defense ministers in Brussels on Monday to discuss a package of two €1bn proposals to speed up urgent 155mm shipments to Ukraine and encourage the countries to form joint artillery procurement deals.
Defense industry officials say Europe has a limited supply of explosives such as gunpowder, TNT and nitrocellulose, which are needed to produce the shells. “The barriers to our potential are major [explosive] powders, which are in short supply in Europe,” said one.
“It is not possible to grow nitrocellulose in a short time[production]. . . Europe does not have significant producers of the raw materials we need,” Hynek said, referring to the main component of gunpowder. “If I want to ramp up ammo production, I’ll probably need three years.”
Explosia, the Czech state-owned manufacturer that is Europe’s biggest supplier of explosives to ammunition factories, told the FT that production of the propellant used in its 155mm cannon was “running at full capacity” and would not be ramped up until 2026.
“Investments are being made to increase our production capacity, but this is a three-year project, not a few months’ work,” company spokesman Martin Venkle said.
This week, Romania’s government said it was in talks with US and South Korean companies to build a gunpowder factory in the country. Its last such plant was closed in 2004.
Even EU officials championing the economic stimulus packages privately admit that European artillery producers have made it clear to them that ramping up production will not be an easy task.
“We are in favor of strengthening the defense industry. But if the result of this EU initiative is that you have a second bidder for the same scarce resource, it will have an impact on prices,” said a German official. “And the arms companies are already getting rich enough.”
“We have to tread carefully. . . nobody wants to subsidize companies that are already learning this,” he added.
Fábrica Municiones de Granada (FMG), one of Spain’s two 155mm artillery producers, has been operating at full capacity since last October, producing shells for a trading company to sell in Ukraine. But Antonio Caro, director general of FMG, said it took four to five months to scale because of difficulties in obtaining basic materials and components.
“Our main problem is primary material,” Caro said. “Ammunition supplies around the world are very strained because all factories, like ours, are at 100 percent.”
“There are not many factories [producing materials like TNT and nitrocellulose] In Europe and those are also at 100 percent, so we should start looking at India, Korea, other countries as well,” he said.
Gianclaudio Torlizzi, an adviser to Italy’s defense ministry, agreed, saying: “We have to find new sources of supply. . . From countries that we have not traditionally contacted,” he said. “Every European country wants to protect the availability of its raw materials.”
The cost of basic materials had “doubled and in some cases tripled,” Caro said. Those increases and an increase in demand caused the price of weapons to rise, although the increase has been less pronounced. A typical shell costs €850 today, about 20 percent more than before the Russian invasion, he said.
For now FMG, which is owned by Slovak conglomerate MSM, has no plans to increase capacity. “Hopefully the war will end soon,” Caro said.
MSM also produces 155mm shells in Slovakia and said it “plans to build a new production hall” to increase artillery production, but declined to provide a timeline.
Additional reporting by Raphael Minder in Warsaw and Amy Kazmin in Rome