Czechoslovak Group (CSG) announced in mid-October that it has acquired shares in a Canadian space technology manufacturer named MDA Space. This action is part of CSG's efforts to continue capitalizing on the arms market boom that has significantly increased in recent years.
Economic Boom and CSG's Position
When CSG was listed on the Amsterdam Stock Exchange this year, it was recognized as the most valuable company in Central and Eastern Europe with a market value of €14.6 billion ($16.4 billion). This success has made its owner, Michal Šternad, one of the wealthiest individuals in the region.
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CSG started as a startup in the 1990s and has now become the second-largest ammunition manufacturer in Europe after Germany's Rheinmetall. The company currently produces its products in Europe and the United States.
Impact of the Ukraine War on the Czech Defense Industry
The Russian war in Ukraine has been the main driver of the boom for CSG and other Czech defense companies. Exports from this industry have increased from €600 million in 2021 to €4.7 billion in 2025. European countries have provided nearly €11 billion in military support to Czech defense companies for Ukraine.
However, the Prague government has transferred the defense industry's portfolio from the Ministry of Defense to the Ministry of Industry and Trade in response to this boom. This change aims to coordinate the growing role of the defense industry in exports with national economic and trade policies.
Nevertheless, the current ruling coalition, which came to power a year ago, includes parties that have either promised to reduce support for Ukraine or are openly pro-Russia. This situation has led to a halt in contributions to the Czech munitions initiative and a delay in increasing defense spending to meet NATO targets.
As a result, this industry is heavily reliant on exports, generating about 90% of its revenue from this source. If the war in Ukraine ends or there is a shift in U.S. foreign policy, this could negatively impact Czech arms manufacturers.
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