PGZ’s Code. “Another step towards consolidation of the Polish defence industry”

Image Credit: PGZ
Image Credit: PGZ

Polish Armaments Group (PGZ) has prepared a Code of conduct that is to be adopted its companies. This is to be yet another step of the process of consolidating the Polish defence industry. As it is being emphasized by the company representatives, the new document is to facilitate effective absorption of modern technologies acquired via the key projects of the Polish Armed Forces modernization, also allowing the group to become more competitive on the foreign marketplace.   

Introduction of the Code is going to make the management processes within the group more simple and, above all, more efficient, as PGZ informs. Consequently, the company would attain a greater potential, within the scope of prospective development. Bartosz Kownacki, Deputy Minister of Defence, also took part in a presentation of the document, organized for the members of the management boards of the PGZ Group.

The presented legal act, also referred to as the Polish Armament Group’s Code, is a set of procedures and regulations unified for all of the Group’s companies, the goal of which is to make management processes that are present within the group simpler and more efficient.

Statement issued by the Polish Armaments Group

As the Group stresses, the document is also a founding act for new organs that would deal with joint planning of new investments and defining strategic goals for the PGZ Group as a whole. The will to tighten the cooperation between the Group’s companies even more constituted a stimulus to develop the Code. The Group wants to intensify the exchange of the experiences and the process of implementing the most convoluted R&D initiatives.

Introduction of the Code regulations in the companies is an opportunity and a tool, at the same time. An opportunity - since introduction of those guidelines would allow us to efficiently react to the external and internal market needs. A tool, because we are given an ability to definitely regulate the relationships and eliminate the competency conflicts between the companies included in the Group.

President of the Management Board of the Polish Armaments Group, Błażej Wojnicz

The Code outlines 18 areas of cooperation that would be established within the PGZ Group, ranging from audit, R&D, HR, with foreign trade and project management to finish with. Moreover, the companies were divided into seven groups, the activities of which would be coordinated by domain bureaus at the Warsaw HQ, with the said bureaus being responsible for the strategic areas of the Group’s activities. The aforesaid bureaus would also supervise the implementation of the selected projects of strategic relevance that reach beyond the scope of the specific competency areas applicable in case of the individual companies. Secondly, the aforesaid organs would also coordinate production, product management and domestic trade issues. All of the above activities are aimed at preparing the Polish Armaments Group to finalize the programmes that have key relevance for the Polish national security, including the WISŁA, NAREW, HOMAR and ORKA initiatives.

We are aware of the special role played by PGZ within the Polish economic and security systems. We will be consistently making efforts to increase our efficiency in performing the work related to the orders placed by the Polish Armed Forces, with simultaneous efforts to limit the export barriers placed in front of our products on the external markets.

President of the Management Board of the Polish Armaments Group, Błażej Wojnicz

Bartosz Kownacki, Secretary of State at the Polish Ministry of Defence, took part in the meeting too. Within his statement, he stressed the role PGZ plays as the integral element of the Polish national security system and as the coordinator of the national potential gathered within the defence industry.

The ongoing negotiation with our US and EU partners would result in a gigantic transfer of technologies that needs to be effectively absorbed and introduced in our industry. Together we are facing a chance to make a technological leap that would allow us to equip our Armed Forces with modern, domestically manufactured equipment, also making it possible to be more competitive in the market of foreign contracts.

Bartosz Kownacki, Secretary of State at the Polish Ministry of Defence

Throughout the recent months, the PGZ Group has signed agreements concerning the following equipment and programmes: procurement of four “Regina” squadron fire modules, with a value of PLN 4.5 billion; 1300 Piorun MANPADS systems, with a value of PLN 1 billion; eight company-level “Rak” fire modules, with a value of PLN 970 million; six “Pilica” combined missile-artillery anti-aircraft systems, with a value of PLN 746 million. Just recently, back in September, “Łucznik” Radom Arms Factory has received an order from the Polish military to deliver 53 thousand GROT rifles, with a value reaching half billion zlotys. The facility is also a part of the PGZ Group. 

Read more: 53 Thousand Grot Rifles for the Polish Armed Forces. Contract Concluded.

Throughout the year 2016 the Polish Armaments Group has earned PLN 542 million on export sales - this amount is 15% higher than the respective data for the year 2015. New orders have been received for the year 2017, with a value of around 800 million zlotys, which translates into 60% increase, in comparison with the year 2016.

The Group’s management is willing to, through further functional consolidation, tighten its cooperation with the Polish Ministry of Defence, Ministry of Foreign Affairs and Ministry of Development, and the subordinated diplomatic posts and military offices of attachés. Further R&D and technology transfer investment would provide the PGZ group with confidence in further expansion and acquisition of orders for new equipment, modernization packages and services.

Regardless of the activities undertaken primarily: military procurement services; PGZ also created a Business Services Centre in Radom. This company deals with the processes shared in the capital group, such as procurement, accounting or IT systems. Ultimately the Centre may also work on similar tasks for other companies belonging to the Treasury.

The Group has made estimates, suggesting that establishment of the Centre, with the said organ utilizing modern IT solutions to support the ongoing procurement processes, would make it possible to generate PLN 220 million of savings, as compared to the current spending data in the said area.

Statement issued by the Polish Armaments Group

PGZ is hoping that this amount would go up as the consolidation process progresses, allowing the group to generate up to 30-40% of savings per annum.