After years of production cuts, the world's arms makers are preparing for a new Cold War inspired by the struggle in Ukraine, The Telegraph reported.
The British defense sector is no exception: industry leader BAE Systems is expecting a flood of new orders from countries poised to resume industrial warfare.
The company is in talks with customers about how to get the missile and munitions business up and running as the sector digests the new model of war being waged in Ukraine.
Chief Executive Charles Woodburn says that demand from the UK Department of Defense (MoD) as well as other customers will eventually require us to increase capacity across the ammunition portfolio.
BAE, Britain's largest defense firm, is in a relatively good position as the projectile and missile production lines it supplies to the MoD are already up and running, meaning it doesn't have to dust off old designs and look for forgotten parts.
For the past five months, Ukraine has fired thousands of artillery shells a day, ranging from howitzers to longer-range weapons such as the M270 multiple rocket launcher.
Western countries supplied huge volumes of these weapons, either donated or sold them. Earlier this week, Germany approved the sale of 100 tank howitzers to Ukraine worth 1.7 billion euros.
As of last week, the UK has sent 6,900 NLAWs, Javelins, Brimstones and other anti-tank weapons, 16,000 artillery rounds, hundreds of rockets and six Stormers equipped with Starstreak anti-aircraft missile launchers to Ukraine.
In the first half of the year, BAE bookings increased by £18bn, up 70%, as underlying earnings before interest and taxes rose 8.2% to £1.11bn. It increased its interim dividend by 5%.
Much of this increase in orders comes from existing programs such as the Dreadnought nuclear-powered ballistic submarine and Spain's recent order for additional Typhoon fighter jets, which the company is building in partnership with Germany, Spain and Italy. However, it looks like the surge will continue as countries look to increase supplies.
Not only BAE will win. For Babcock, the UK's second largest defense contractor, NATO's capacity building in Eastern Europe is a potential opportunity to provide training, maintenance and parts services, according to Chief Executive Officer David Lockwood. Countries such as Poland, Hungary, Romania and the Baltic countries are abandoning Soviet weapons.
The company reported a pre-tax profit of £182m in the first six months of 2021, up from a loss of £1.18bn a year ago, with orders book up more than a fifth to £9.9bn.
Sources close to Babcock say clients want existing projects to be completed faster as the war in Ukraine raises readiness levels.
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