National defense industry to be re-organized around two major conglomerates

The process of consolidating two armament groups is now under way. Under the proposed re-organization, the ammunition/rocket/armored sectors will be led by PHZ Bumar and aviation/radio/electronics by the Industrial Development Agency (ARP). It should be accomplished by 2005 and is to be financed with capital saved through the technical army modernization program and offset deals. Bumar has already finished the first phase of the consolidation with the takeover of nine companies within its structures, but the company is still awaiting acquisition of a further six companies which have first to be restructured by the Economy Ministry. The whole idea of creating capital groups and consolidation of the country's defense sector seems a reasonable solution to the current situation. However, these companies should not depend solely on export contracts and should receive more orders from domestic companies and the Defense Ministry. The latter has not yet given a date for the placement of long-term contracts with domestic armament p roducers. (Prawo i Gospodarka, pp. 1, 3) M.M.