Singapore Technologies Engineering has licensed an ammunitions manufacturer in Poland to produce 40-mm grenades for the European market.
Last October, the Niewiadów Polish Military Group announced plans to spend PLN 67.4 million, or $23.7 million, to build new production capabilities for 40-mm ammunition using technological know-how from ST Engineering Advanced Material Engineering.
ST Engineering, a leading performer among the 30 STI component stocks in the past year, is known to be a leading producer of such 40-mm ammunition.
ST Engineering is seeing a growing momentum of defence contracts from overseas. In the past two months, the company announced a $470 million deal to maintain vehicles for Qatar's army and $600 million to build ships for Kuwait's navy.
This specific licensing arrangement with Niewiadów was not announced by ST Engineering but was mentioned several times by the local partner in Poland in press releases and interviews over the past few months.
In an interview with Defense News published on April 8, Niewiadów's CEO Adam Januszko says the 40-mm plant has a planned production capacity of up to 480,000 rounds per year.
According to Defense News, Poland plans to spend PLN 23.8 billion (US$6.5 billion) on ammunition and rockets, partly funded by the EU.
Niewiadów estimates that NATO members operate around 42,000 40-mm grenade launchers, with total ammunition stocks of around 42 million rounds.
Without specifying the source of info, Niewiadów says the 40-mm ammunition market in Europe is worth around US$2.3 billion with training needs alone generating annual demand of nearly US$20 million.
See also: ST Engineering wins $600 mil contract to help build missile gun boats for Kuwait
Besides ST Engineering's 40-mm, Niewiadów, which plans to list on the Warsaw Stock Exchange later this month, has a similar arrangement with American contractor Northrop Grumman for 155-mm ammunitions.
Januszko says the intention is to “ensure the sovereignty of deliveries for Poland and NATO allies.”
ST Engineering shares closed at $11.41 on April 10, down 0.35% for the day but up 35.67% year to date.
