Dezamet: The 87-Year-Old Ammunition Factory That NATO Cannot Afford to Ignore

The Weapon Nobody Covers — Because It Isn't a Weapon

When Russia launched its full-scale invasion of Ukraine in February 2022, the world's attention went immediately to tanks, missiles, and aircraft. But within weeks, a different crisis emerged — one that military planners had warned about for years and that politicians in comfortable Western capitals had ignored. NATO ran out of artillery ammunition. Not hypothetically, not on paper — literally, practically, at the rate Ukrainian forces were consuming 155mm shells in combat, the combined industrial output of the entire Western alliance could not keep pace. The United States, the United Kingdom, Germany, France, and Poland together were producing fewer shells per month than Ukraine was firing per day.

The lesson absorbed by every serious defence ministry in 2022 and reinforced every year since is stark: a platform without ammunition is a very expensive piece of metal. Poland's 250 K2 Black Panther main battle tanks are useless if their ammunition stocks run out in a fortnight. Its KRAB howitzers — now famous from Ukraine, where they have been used to devastating effect — require a continuous supply of 155mm shells that nobody in Europe can currently produce fast enough. The $14.18 billion HSW contract for Borsuk infantry fighting vehicles, the F-35A fighters, the Apache attack helicopters — every one of these is a liability, not an asset, without the ammunition ecosystem that sustains them.

Dezamet is a central piece of that ecosystem. It is not famous. It does not have an IPO or a stock ticker. Prime Minister Donald Tusk went personally to its factory floor in September 2025 to announce a technology transfer from BAE Systems. That visit — the head of government standing in a factory in a small town in southeastern Poland to announce the country's path to ammunition self-sufficiency — tells you everything about how seriously Warsaw now takes what happens inside those production halls.

Born from a French Loan, Built to Survive a War — And It Did

To understand Dezamet, you must first understand the Centralny Okręg Przemysłowy — the Central Industrial District, known by its Polish abbreviation COP. In 1936, facing the rising military threat from Nazi Germany to the west and Stalinist Russia to the east, Poland's deputy Prime Minister and Finance Minister Eugeniusz Kwiatkowski conceived of one of the most ambitious industrial planning projects in interwar European history. The goal was to build a heavy industrial and armaments manufacturing base in the geographic centre of Poland — as far as possible from any border, tucked into the triangle formed by the Vistula, San, and Wisłoka rivers, surrounded by forest and difficult terrain.

The logic was strategic rather than economic: put the factories where an invader could not easily reach them, and give Poland the domestic capacity to arm itself without depending on foreign supply chains. The COP plan called for steelworks, aircraft factories, chemical plants, explosives facilities, and — crucially — ammunition works. It was financed partly by a French military loan, reflecting Paris's own interest in keeping a rearmed, capable Poland on Germany's eastern flank.

Ammunition Factory No. 3 was established in 1939 in Dęba, a forest village in the Subcarpathian Voivodeship. The location was chosen deliberately for two reasons: the Dęba military training ground was already there — ideal for testing ammunition immediately after production — and the dense forest provided natural concealment and a buffer zone against aerial observation. The first factory manager was Jan Szypowski, who had previously served as deputy manager of Ammunition Factory No. 2 in Skarżysko-Kamienna. Workers and their families began arriving to build not just a factory but a town: houses, a school, a hospital, a swimming pool, blocks of flats. The settlement that grew around the factory was eventually named Nowa Dęba — and Dezamet and Nowa Dęba have been functionally inseparable ever since.

Three Layers of State — How Dezamet Is Actually Owned

Dezamet is a wholly owned subsidiary of Polska Grupa Zbrojeniowa S.A. (PGZ). PGZ is itself a state-controlled holding company whose ownership is split across three Polish state entities. Understanding this structure matters because it determines how capital flows into the business, how investment decisions are made, and — critically — what the investment options are for anyone who wants exposure to the underlying earnings.

The practical consequence of this ownership cascade is that Dezamet, as a subsidiary of PGZ, operates with the financial backing of the Polish state but without the governance transparency of a publicly listed company. It files annual accounts with the Polish KRS (National Court Register) — these are public documents — but is not subject to the continuous disclosure requirements, quarterly reporting obligations, or analyst coverage that a Warsaw Stock Exchange listing would require. This is precisely why so little is written about it: the information exists, but it requires reading Polish-language KRS filings, cross-referencing PGZ group accounts, and understanding the interplay between three different state ownership vehicles.

One Town, One Factory, One Mission — And a Building Programme Underway

Dezamet operates from a single primary site: Ul. Szypowskiego 1, Nowa Dęba, Subcarpathian Voivodeship — the same address as the original Ammunition Factory No. 3 built in 1939. The street is named after Jan Szypowski, the factory's first manager. That continuity of location across 87 years — war, occupation, communism, transition, and now rearmament — is not an accident. The site was chosen with deliberate strategic geometry: distance from borders, proximity to testing grounds, concealment in forested terrain. Those factors have not changed.

The facility includes multiple production halls for artillery, mortar, and grenade launcher ammunition assembly; propellant and fuse integration lines; an accredited research and measurement laboratory — described by Dezamet as the only facility of its kind in the Subcarpathian region, equipped with high-precision measuring instruments capable of supporting both military qualification testing and commercial quality certification; and metalworking and electroplating facilities that serve the civilian production division.

The PLN 1.36 billion capital allocation from the FIK announced in July 2025, combined with the BAE Systems technology transfer announced in September 2025, represents the most significant physical expansion of the Nowa Dęba site since the communist-era rebuilding of the 1950s. New automated production lines for 155mm ammunition are under construction, with a target of reaching 130,000 shells per year capacity by end of 2027 — up from a fraction of that figure before 2022. The investment will also involve new explosive filling infrastructure and quality control systems conforming to NATO STANAG standards.

Nowa Dęba itself — a town of approximately 13,000 people — remains deeply intertwined with the factory. The NATO training ground adjacent to the factory, which has operated since before the Second World War, is now used regularly by alliance forces including US troops stationed in Poland. The combination of a live ammunition production facility, a testing range, and NATO exercises effectively in the same postcode gives Dezamet an operational feedback loop that no purpose-built greenfield facility could replicate.

What Dezamet Actually Manufactures — Military and Civilian

Military Production — The Core

Civilian Production — The Commercial Anchor

Dezamet's civilian production division is not an afterthought — it is a deliberate strategic hedge that has kept the factory commercially viable through lean defence contract periods and funded the preservation of manufacturing skills during the 1990s and 2000s, when Polish defence spending was at its lowest. The division manufactures precision welded components, pins, rods, and structural parts for global construction machinery brands, most notably Caterpillar. Over twenty years of experience in this field has produced quality systems and manufacturing discipline that directly benefit the military production side. The civilian division also operates the electroplating facility and contributes to the accredited laboratory's commercial testing services.

Headcount, Growth, and the Nowa Dęba Employment Equation

Dezamet's most recently confirmed headcount is approximately 659–700 employees — a figure from 2021–2022 data that has certainly grown since, given the 47% revenue surge and 165% asset growth recorded in 2024. The company does not publish quarterly headcount figures, and PGZ's group-level reports aggregate employment across 67 subsidiaries. But the trajectory is unambiguous: Dezamet is hiring.

In the context of Nowa Dęba — a town of approximately 13,000 people in a predominantly rural part of the Subcarpathian Voivodeship — Dezamet is not merely an employer. It is the economic foundation of the municipality. The factory and the town were built simultaneously in the late 1930s; the workers who came to build the ammunition plant settled and raised families; their descendants in many cases still work there. The expansion programme underway since 2022 is not simply an industrial story — it is a social one. Nowa Dęba is experiencing an employment and investment cycle unlike anything in its post-communist history.

Why Dezamet Matters More Than Almost Anyone Currently Realises

• ✦It is the NATO eastern flank's primary large-calibre artillery ammunition manufacturer. PGZ operates five ammunition facilities in total, but Dezamet received the largest single capital allocation — PLN 1.36 billion — in the July 2025 FIK funding round precisely because it is the primary 155mm producer. 155mm is the calibre NATO has identified as most critically deficient relative to conflict consumption rates. Ukraine has demonstrated that modern conventional warfare consumes 155mm shells at rates the entire Western alliance combined cannot currently sustain. Dezamet's expansion is not supplementary to NATO's ammunition strategy — it is central to it.
• ✦The BAE Systems technology transfer is generationally significant. Poland has not previously had access to the full design and manufacturing technology for NATO-standard 155mm ammunition at the precision and range performance levels demanded by modern battlefield conditions. The September 2025 agreement with BAE Systems transfers that technology in its entirety, including the design data for extended-range variants with gas generators that push range beyond 40 kilometres. As Polish Defence Ministry Konrad Gołota confirmed publicly: Poland obtains "full sovereignty and control" over the technology. It cannot be revoked, sanctioned, or withheld. That is qualitatively different from a supply contract.
• ✦Geographic positioning is a structural moat that cannot be replicated. Dezamet is located in the Subcarpathian Voivodeship — deep in the geographic interior of Poland, equidistant from the country's borders, shielded by the Carpathian foothills to the south and a NATO military training ground to the immediate east. Ballistic missile and drone strike ranges from Russian territory to Dezamet are significantly greater than to production facilities in the Baltic states, northeastern Poland, or Western European manufacturers who have rushed to re-enter the ammunition market. The site was chosen in 1936 specifically for strategic depth. That calculation remains valid today.
• ✦The civilian production division provides commercial resilience that pure-play defence manufacturers lack. Dezamet's two-decade relationship with Caterpillar's supply chain is not incidental to the investment story — it is the quality management system, the precision manufacturing culture, and the commercial revenue floor that kept the company functional during the lean defence spending years of the 1990s and 2000s. Companies that maintained civilian production disciplines through the post-Cold War period arrived at the 2022 demand surge with better manufacturing systems than those that had purely coasted on state contracts. Dezamet is in the former category.
• ✦The 300,000-shell PLN 11 billion contract provides multi-year revenue visibility. The 2024 contract between PGZ and Poland's Ministry of National Defence for 300,000 155mm shells is the largest single ammunition procurement in Polish history. It provides a revenue floor that extends well into the decade and underpins the investment in new facilities — no rational company invests PLN 1.36 billion in capacity expansion without contracted demand to fill it. The combination of a government owner, a government customer, and a government-funded capital programme removes most of the revenue uncertainty that would concern a private-sector investor in a comparable company.
• ✦Poland's stated export ambition creates an addressable market many times larger than domestic demand. Prime Minister Tusk explicitly stated that Poland intends to become an ammunition exporter. Every NATO member in Central and Eastern Europe — Romania, Slovakia, the Czech Republic, Hungary, the Baltic states — faces the same 155mm shortage. They all need what Dezamet is building the capacity to produce. Export orders from NATO allies would transform Dezamet from a domestic supplier into a regional anchor manufacturer. The PLN 11 billion domestic contract is a floor. The export opportunity is the ceiling — and it is very high.
• ▲The primary risk is execution and timeline.} The 130,000 shells per year target requires building, installing, commissioning, and validating automated production lines to NATO STANAG standards — while simultaneously managing the existing production programme. BAE Systems has delivered similar technology transfers elsewhere, but each is complex. Poland's workforce for this specialised manufacturing is being recruited and trained concurrently with the facility expansion. A 12–18 month delay to the 2027 target is entirely plausible and would be commercially inconvenient, though not structurally damaging given the length of the underlying contracts.

You Cannot Buy the Shares — But You Can Buy the Bonds

Dezamet is not listed. PGZ is not listed. There is no equity route to direct ownership of this business available through any public market. This is the fundamental constraint of the Polish defence industrial thesis as it currently stands — the most interesting companies are all inside PGZ, behind the state ownership wall, inaccessible to public equity investors.

There is, however, one legitimate public market route: PGZ bonds, listed on the Catalyst market — GPW's dedicated fixed income platform for corporate and municipal debt. PGZ has issued bonds on Catalyst and has explicitly signalled plans for a significantly larger bond issue in 2026, targeting both institutional and retail investors, with the stated purpose of financing the long-term capacity expansion programme — the same expansion that includes Dezamet's PLN 1.36 billion investment. PGZ vice-president Marcin Idzik confirmed this directly in December 2025, describing the planned issuance as worth "several billion euros" and designed to allow Polish citizens to directly participate in funding national rearmament.

Indirect Equity Exposure — The Adjacent Plays

For investors who want equity rather than fixed income exposure to the Dezamet-adjacent thesis, several listed Polish companies provide partial exposure to the same demand dynamics:

• ✦PKO Bank Polski (PKO BP) · WSE: PKO — Poland's largest bank, primary lender to PGZ with a confirmed €2.8 billion credit line. As PGZ's single largest financing relationship, PKO BP has direct exposure to the revenue growth of the entire Polish Armaments Group, including Dezamet. PKO BP is already a core Polish equity holding for any investor in the Polish financial sector, but its role as the de facto bank of Polish rearmament is underappreciated in most analyst frameworks.
• ✦Huta Stalowa Wola (HSW) · via PGZ, not listed directly — HSW received the landmark €14.18 billion contract for Borsuk IFVs and Krab howitzers in May 2026. The Krab requires the 155mm shells Dezamet produces. HSW and Dezamet are therefore linked: every Krab produced creates durable ammunition demand that flows directly to Dezamet and through it to PGZ's consolidated revenue. HSW itself is unlisted, but the interdependency is direct and significant.
• ✦Polska Grupa Militarna (GNSP) · WSE Main Market — Listed in April 2026, this is the only directly listed Polish defence company of meaningful scale. It operates in civil defence drones, mines, ammunition-adjacent products, and logistics. It is not an equivalent to Dezamet — different products, different customers — but it is the closest thing to a listed Polish defence manufacturer currently available, and its April 2026 listing demonstrates that the GPW is open to Polish defence sector equity issuances. It is the canary: if GNSP performs well, PGZ subsidiary listings become politically and commercially more viable.
• ✦Orlen S.A. (PKN) · WSE: PKN — Poland's integrated energy group provides fuel, lubricants, and chemical inputs to the entire Polish defence industrial ecosystem, including PGZ's factories. As we have documented in depth in our Orlen Q1 2026 analysis, the company also operates the Odolanów helium facility — a critical material for precision manufacturing and semiconductor supply chains that intersect with advanced munitions production. The connection is indirect but real.

Eighty-Seven Years of Getting It Right

Dezamet was built because Polish planners in 1936 correctly understood that a country surrounded by hostile powers needed sovereign ammunition production, located where enemies could not easily destroy it, producing weapons that could not be embargoed. They were right. Germany occupied the factory and used it. The communists used it. The post-Cold War governments kept it alive on a skeleton budget. And now, in 2026, a prime minister stands on its factory floor to announce it will produce 130,000 shells a year and export the surplus to allies who cannot produce enough themselves.

The investment story is structurally frustrated by the state ownership wall — you cannot buy the equity. But the bond route is real, imminent, and potentially attractive for fixed income investors who want exposure to one of the most strategically important industrial expansion programmes in Europe with the implicit backing of a sovereign that is spending 4.8% of GDP on the sector. Watch the Catalyst market in 2026. The PGZ bond issuance, when it comes, will be the first time retail investors can directly participate in the Polish rearmament story.