Czech arms maker Czechoslovak Group (CSG) announced in mid-October that it has acquired a stake in Canadian space technology manufacturer MDA Space. This space mission is part of the company's bid to continue riding the boom that has transformed its fortunes in recent years. When it listed on the Amsterdam Stock Exchange earlier this year, CSG soared to become the most valuable company in Central and Eastern Europe, with a market capitalization of €14.6 billion ($16.4 billion), propelling its owner, Michal Strnad, to the top of the region's rich list.
CSG began life as a 1990s startup, selling military surplus amid the collapse of the Warsaw Pact, the military alliance between the Soviet Union and Europe's socialist Eastern Bloc nations, which was founded in 1955 and disbanded in 1991. It has since grown to become the second-largest producer of ammunition in Europe after Germany's Rheinmetall and now produces across Europe and in the US. The main driver of the company's rising fortunes has been Russia's war in Ukraine, which has driven a dramatic boom across the Czech defense industry as a whole.
In 2021, the sector's exports totaled €600 million. In 2025, these exports had expanded to €4.7 billion, powered by orders placed by Kyiv and its European allies. By the end of that year, European states had procured approximately €11 billion worth of military support for Ukraine from Czech defense firms.
Orders to the value of roughly €4 billion have arrived via the Czech Ammunition Initiative, a program that coordinates the transfer of artillery shells to Ukraine. Amid the avalanche of orders sparked by Russia's full-scale invasion of Ukraine in 2022, CSG and Czech peers such as STV, Colt CZ and PBS have been busy expanding production to pump out military vehicles and planes, guns, grenades, shells and bullets. "The war in Ukraine, particularly in its early stages, was especially well suited to Czech firms," Krzysytof Debiec of the Centre for Eastern Studies (OSW) told DW.
Debiec says that this was largely due to the major role that the former Czechoslovakia played in supplying Warsaw Pact countries. "Specialization in the production of ammunition — including Soviet calibers — the repair of Soviet-era equipment and the manufacture of relatively unsophisticated systems that could be rapidly introduced and were compatible with the Ukrainian army's existing stocks," have all been key, he explained. At the same time, European states eyeing the threat from the east and broader geopolitical instability are boosting their own defense budgets.
"The shift in US policies vis-a-vis NATO is forcing European nations to increase their defense spending dramatically, and that's another factor" in the Czech defense industry boom, Jan Jires, a former deputy defense minister and now a senior advisor at the International Institute for Strategic Studies, told DW. However, since launching on the stock exchange, CSG's share price has performed erratically, illustrating the shifting sands on which Czechia's booming defense industry now stands. The government in Prague has responded to the sector's surge by transferring the defense industry portfolio from the Ministry of Defense to the Ministry of Industry and Trade to align its growing role in exports with national economic and trade policy.
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