Ukrainian Defense Industry JSC (UDI) and D&M Holding Company are establishing a joint venture to produce special chemicals for defense-sector needs, aiming to address a persistent shortage of components for ammunition manufacturing.
The agreement was signed on July 11 during the Ukraine Recovery Conference 2025 (URC 2025) in Rome. Notably, the new enterprise will be located in the United States.
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Naturally, this raises questions about whose needs the plant will serve. UDI has stated that it will produce materials used in manufacturing ammunition for the Ukrainian Defense Forces. From the wording of the announcement, it seems that these products will be shipped to production sites in Ukraine.
UDI Director General Oleh Hulyak emphasized the importance of placing the enterprise in a safe location. After all, a similar facility in Ukraine would be exposed to russian missile and drone attacks.
Defense Express adds that there are other less obvious security risks, such as potential sabotage on U.S. soil by russian agents or even domestic activist groups, a trend already observed in Europe. Political and diplomatic factors must also be considered, as the setup still leaves Ukraine reliant on decisions made in Washington.
Nevertheless, in broader terms, this arrangement could provide Ukraine's defense industry with a more stable and secure source of critical components, which are often in short supply on the battlefield. The U.S. government's apparent willingness to preserve friendly relations also lowers the risk compared to sourcing these materials from the global market.
This move aligns with UDI's broader strategy of establishing overseas operations, which began with the launch of a facility in Denmark a week prior. It may also warm the relations between Kyiv and the White House.
As for Ukrainian Defense Industry's partner, D&M Holding Company is a prominent manufacturer and supplier of small arms ammunition production equipment. This offers a hint as to the likely focus of the new venture and indicates a substantial scale, given D&M's established role in the U.S. arms industry.
It's also worth recalling that back in September 2024, the U.S. Department of Defense reported D&M's involvement in building production facilities in Ukraine — although at the time, it operated only as a contractor. As far as known for now, the new venture will likely be managed primarily by UDI.
While small arms ammunition usually get less media attention than artillery shells, its steady supply remains crucial for frontline forces. Establishing Ukraine's own production capability, even if abroad, represents a strategic step toward strengthening both its defense capacity and its sovereignty.
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