Czech arms makers look to space defense to sustain Ukraine-driven boom

Czech arms maker Czechoslovak Group (CSG) announced in mid-October that it had acquired a stake in Canadian space technology manufacturer MDA Space. The move is part of the company's effort to keep benefiting from the boom that Russia's war in Ukraine has brought to the Czech defense industry. CSG listed on the Amsterdam Stock Exchange earlier this year with a market capitalization of €14.6 billion, making it the most valuable company in Central and Eastern Europe and its owner, Michal Strnad, the region's richest person.

From 1990s startup to major producer

CSG began in the 1990s as a startup selling military surplus as the Warsaw Pact collapsed. It is now Europe's second-largest ammunition producer after Germany's Rheinmetall, with production in Europe and the US.

Czech defense exports rose from €600 million in 2021 to €4.7 billion in 2025. By the end of last year, European states had bought roughly €11 billion of military support for Ukraine from Czech firms. About €4 billion came through the Czech Ammunition Initiative, a program coordinating artillery shell deliveries to Ukraine.

Krzysztof Debiec of the Centre for Eastern Studies (OSW) says Czech firms were well suited to the war thanks to their specialization in ammunition, including Soviet calibers, and in repairing Soviet-era equipment. Jan Jires, a former deputy defense minister, also cites the US shift in policy toward NATO, which is pushing Europe to raise defense spending sharply.

Dependence on exports

The government of Prime Minister Andrej Babis has moved the defense industry portfolio from the Ministry of Defense to the Ministry of Industry and Trade. The coalition has halted contributions to the Czech Ammunition Initiative and is slow to raise defense spending to NATO targets. The industry earns about 90% of its revenue from exports, most of it still tied to Ukraine. Jires says the industry has outgrown the country's financial means.

The space push

Bullets and shells account for around 60% of CSG's sales. The company already holds stakes in British and German space firms, calls space a natural extension of its activities and plans a dedicated space team. Jires says Czech firms must secure access to defense and space funds in the next EU budget, which could reach €130 billion.