Europe’s push to build weapons for Ukraine has been hampered by a shortage of explosives, which industry insiders fear will delay efforts to ramp up shell production by up to three years.
Scarce supplies of gunpowder, plastic explosives and TNT have left industries unable to quickly fulfill expected EU orders for Ukraine, no matter how much money is thrown at the problem, according to officials and manufacturers.
The supply chain constraints underscore how Russia’s invasion of Ukraine has badly exposed Europe’s inadequate arms stocks and weak domestic manufacturing capacity, underpinned by decades of underinvestment.
“The fundamental problem is that the European defense industry is not in a good position 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 expansion of 155mm artillery production. Shells are desperately needed to restore the national arsenal and maintain supplies to Ukrainian forces.
But producers, industry officials and EU officials warn that increased demand could only increase prices, which have already risen by a fifth in the past year.
“It is very difficult to increase production of artillery ammunition, especially heavy, large-caliber ammunition, in the short term,” said Jiri Hynek, chairman of the Czech Republic’s Defense and Security Industry Association. “The new artillery factory is very simple, but how to make 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 immediate 155mm shipments to Ukraine and encourage the countries to create joint artillery purchase agreements.
Defense industry officials say Europe has limited supplies of explosives such as gunpowder, TNT and nitrocellulose, which are needed to make the shells. “The constraints to our capacity are mainly [explosive] powder, which is in short supply across Europe,” said one.
“In the short term, it is not possible to grow nitrocellulose[production]. . . There are no significant producers of the raw materials we need in Europe,” said Hynek, referring to the main ingredient in gunpowder. “If I wanted to increase the production of gunpowder I would probably need three years.”
Explosia, the Czech state-owned manufacturer that is one of the biggest suppliers of explosives to ammunition factories in Europe, told the FT that production of propellants used in 155mm artillery was “running at full capacity” and would not be ramped up until 2026.
“Investments are being made to further increase our production capacity, but this is a three-year project, not a few months’ work,” said company spokesman Martin Wenkel.
This week the Romanian 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.
EU officials who have championed the financial stimulus packages also privately admit that European artillery manufacturers have made it clear to them that increasing output 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 another bidder for the same scarce resource, that will have an impact on the price,” said a German official. “And the arms companies are getting rich enough already.”
“We have to tread carefully. . . Nobody wants to subsidize companies that are already coining it,” he added.
Fábrica Municiones de Granada (FMG), one of Spain’s two 155mm artillery manufacturers, has been operating at full capacity since last October, producing shells for a trading company that sells them to Ukraine. But FMG director-general Antonio Caro said it took four to five months to ramp up due to difficulty in sourcing basic materials and components.
“Our main problem is primary materials,” said Caro. “Ammunition supplies around the world are very tight because all factories, like ours, are at 100 percent.”
“There are not many factories [producing materials like TNT and nitrocellulose] In Europe and they are also at 100 percent, so we have to start looking further afield in India, in Korea, in other countries,” he said.
Gianclaudio Torlizzi, an adviser to Italy’s defense ministry, agreed: “We need to find new sources of supply. . . “Every European country wants to protect the availability of its raw materials,” he said.
The cost of basic materials “doubled and in some cases tripled,” Caro said. That increase and a surge in demand led to an increase in munitions prices, although the increase was less pronounced. A typical shell today costs €850, about 20 percent more than before the Russian invasion, he said.
At the moment FMG, which owns Slovak group MSM, has no plans to increase its capacity further. “Hopefully the war will end soon,” said Caro.
MSM also produces 155mm shells in Slovakia and said it “plans to build a new production hall” to increase artillery output, but declined to provide a timeline.
Additional reporting by Raphael Minder in Warsaw and Amy Kazmin in Rome
