Ukraine plans to create a unified defense holding company on the basis of Ukroboronprom
Ukraine plans to reorganize the joint-stock company “Ukrainian Defense Industry” (“Ukroboronprom”) into a holding company and unite other state defense assets under its management. The reform is intended to increase the efficiency of weapons production and improve management of defense-industrial complex enterprises.
This was announced on October 12 by First Vice Prime Minister – Minister of Energy Denys Shmyhal following a meeting with the supervisory board of Ukroboronprom and acting CEO Ivan Havryliuk.
According to Shmyhal, the meeting discussed the development of Ukrainian defense industry, increasing production capacity and improving enterprise efficiency.
“In particular, we intend to transform the Ukrainian Defense Industry into a holding company, which will increase production efficiency. And also to build an effective management system and unite other state defense assets into a single holding,” — the minister said.
What changes are planned in “Ukroboronprom”
The new structure is expected to centralize management of state defense assets and improve coordination of enterprises’ work.
At the same time, Shmyhal has not specified which enterprises and assets are planned to be included in the holding. The deadlines for the reorganization and the concrete model of the future structure have also not been announced.
The minister emphasized that the “Ukrainian Defense Industry” has two main production tasks: providing Ukrainian military with necessary weapons and developing new technologies.
According to him, the company must not only meet the current needs of the front but also maintain competitiveness in the long term.
Shmyhal also noted that “Ukroboronprom” is among the world’s top 50 defense companies.
The company is preparing personnel and management changes
In addition to the reorganization, the state leadership intends to update the corporate governance system of “Ukroboronprom”.
According to Shmyhal, two key management issues must be resolved in the near future:
- Complete the competition for the position of CEO. Currently, Ivan Havryliuk is acting as head of the company.
- Form a full-fledged board and update the organizational structure. These changes should improve the efficiency of enterprise management.
The minister thanked the members of the supervisory board for their work in strengthening Ukraine’s defense capabilities.
Reform of “Ukroboronprom” has been ongoing since 2023
The current plans are a continuation of transformations in the state defense-industrial complex.
In 2023, the state concern “Ukroboronprom” was transformed into the joint-stock company “Ukrainian Defense Industry”.
According to Cabinet of Ministers Resolution No. 441 of March 21, 2023, 100% of the company’s shares belong to the state. It received authority to manage corporate rights of defense enterprises and coordinate their activities.
The reform provided for a transition to modern corporate governance principles, increased transparency of enterprises’ operations, and creation of more favorable conditions for attracting investments.
Now the government is considering further consolidation of the state defense structure by combining assets that are still outside its management.
At the same time, Shmyhal’s statement concerns intentions and further organizational changes. A final decision on merging specific enterprises into the new holding has not yet been presented.
Based on materials from: Denys Shmyhal, Ukrinform, Resolution of the Cabinet of Ministers of Ukraine No. 441.