The government has adopted a resolution that will significantly speed up the creation and delivery of domestic drones to the front and create conditions for the rapid development of Ukrainian military technologies.
The decision provides for an increase in the profit share for Ukrainian drone manufacturers up to 25%.
This was stated by Deputy Prime Minister for Innovation, Development of Education, Science and Technology – Minister of Digital Transformation of Ukraine Mykhailo Fedorov.
This will allow UAV manufacturers to develop more actively, scale up, reinvest profits, and compete with foreign companies. Instead of wasting months on unnecessary paperwork and bureaucratic work, there is an accelerated admission of UAVs to operation, their purchase and delivery to the front, the minister wrote.
According to him, this is “a historic decision that can accelerate our victory and develop the UAV market in Ukraine.”
Earlier, Economic Truth dealt with how imperfect regulation hinders the development of the military drone market.
The war has created a vast UAV market in Ukraine. Since 2014, many private drone companies have emerged. Drones of the Ukrainian collection are no longer inferior in quality to foreign counterparts. Manufacturers could modernize their facilities and develop new drones, but they face a number of problems that the authorities ignore.
The state does not buy domestic drones at market prices. The purchase price of a drone is determined by the formula “production costs plus a percentage of profits.”
We are selling the Aist complex to the state with a yield of about 2.5% of the cost. To have prospects, profitability must be at least 20%, that is, ten times more than now, says DeViRo director Andrey Gorshkov
Ukroboronprom told EP that their manufacturers are experiencing the same problems with price restrictions, since subsidies for the production of drones are not provided.
The price limit applies only to local manufacturers. It turns out that it is more profitable to transfer capacities abroad and sell UAVs to the Ministry of Defense from there. During a conversation with EP manufacturers, I discovered that several Ukrainian companies are already thinking about it.
By increasing the profitability of Ukrainian enterprises, the Ministry of Defense will spend more budget money on the purchase of devices, but at the same time will invest in the expansion of the Ukrainian military-industrial complex.
The Ministry of Digital Transformation and the Ministry of Strategic Industry have proposed a number of deregulations: they want to allow private drone manufacturers to receive profits up to 25% of the cost on government contracts.
Additionally, the creation of UAVs is hampered by increased monetary monitoring. Money can “hang” between the bank and the seller of components for up to three weeks due to the large number of checks.
Source: Racurs
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.