Poland is aware of and interested, perhaps most of all, in this. PCO S.A. was one of the first Polish companies to see the promises of developing cooperation with Ukrainian partners; Polish companies are interested in further developing this cooperation in different forms -- ranging from the simple sales of products to Ukraine to bolster its homeland defense and public safety to investment projects and the establishment of collaborative programs and industrial partnerships. The outcomes of the already ongoing cooperation give hope for successful cooperation in new areas.
A history that is already written
PCO S.A.’s modern history of cooperation with Ukrainian companies dates back to 2013. This cooperation received a new boost in 2014 -- a difficult time not only for Ukraine but also for the entire regional and international security system. PCO S.A. offered Ukrainian partners a range of night vision/thermal imaging technology solutions that had been operationally proven by the Polish army and could therefore promptly improve the night combat capability of the Ukrainian forces. At the time, we proposed upgrading the existing fleet of BMP-1 combat vehicles with passive night vision devices. Another area of cooperation addressed upgrades of tanks: PCO S.A. was interested in replacing active type observation devices for the tank driver and commander with passive type counterparts, and in supplying thermal sights. These upgrades would substantially improve the night combat capability. Field exercises held in Ukraine had validated high performance capabilities of the upgraded tanks and armored vehicles, which allowed us to pass qualification for compliance with the Ukrainian Armed Forces’ requirements. The PCO S.A.’s electronic-optical and thermal imaging equipment products have successfully passed field trials and achieved induction into Ukraine’s Armed Forces.
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As a result of cooperation between PCO S.A. and military production companies in Ukraine, in June 2017, a contract was signed to deliver electronic-optical night vision devices that our Company developed specifically for upgrading Ukraine’s BMP-1 combat vehicles. For now, PCO S.A. has fulfilled all its obligations under this contract and is ready to provide more deliveries to the Armed Forces, the National Guard and other uniformed services in Ukraine.
A separate area of cooperation between PCO S.A. and its Ukrainian partners addressed deliveries of PNL-3 "Bielik" night vision goggles for helicopter upgrade programs. The Polish products have already improved the capabilities of Ukrainian helicopters, allowing their effective use at night and in special conditions. They deservedly receive positive feedback from Ukrainian helicopter pilots flying missions both within Ukraine and outside.
Beyond that, over that short but quite busy period PCO S.A. had negotiated with its Ukrainian partners cooperation in many different areas that lie within the Company’s expertise and could in the near term be added to its track record of successfully implemented projects. These negotiations addressed, among others, new areas of cooperation with a number of R&D companies in developing new weaponry and equipment products using the Company's COTS solutions and development outputs, as well as the possibilities for creating collaborative products and industrial partnerships.
For several years now, PCO S.A. has been able to communicate and work together with Ukrainian enterprises. It therefore can be argued that this is truly good cooperation and State-owned Ukroboronprom Group’s enterprises are reliable partners. Added to this consideration is that PCO S.A. has vigorously cooperated both with the Ministry of Defense and the National Guard of Ukraine.
This all gives a good reason to look optimistically in the future.
Keeping momentum high
PCO S.A. has assessed its collaborative experience with Ukrainian partners and found great promises in further cooperation between Polish and Ukrainian defense manufacturers. This cooperation can bring mutual benefits along with an opportunity for bilateral synergy. Great potential is held in expanded and extended cooperation with both State-owned and privately-run defense manufacturers, which are more flexible and willing to undertake innovation projects that can be promptly adjusted to specific customer’s needs and requirements.
The areas of cooperation that PCO S.A. sees as most promising in Ukraine are ones that address the provision of new capabilities for Ukraine’s military airplanes and non-military helicopters by ensuring a wider use of night vision aviation goggles like the PNL-3 that is already well-known to Ukrainian users, and the more capable PNL-4 that uses the latest 16-millimeter image intensifier Intens TM equipped with an Auto-Gating capability to provide optimum vision in variable light conditions. Beyond that, it should be noted that the PCO S.A PNL-3M aviator’s goggles has been certified to European Aviation Safety Agency (EASA) standards and is therefore eligible for use with helicopters, including Airbus helicopters. This might be of relevance in view of the forthcoming purchase of 55 x Airbus helicopters by Ukraine’s Ministry of Internal Affairs for use by the State Service for Emergencies, State Border Guard Service, National Guard and National Police of Ukraine. The use of Polish night vision goggles with French-supplied helicopters of the Ukrainian Ministry of Internal Affairs would offer benefits in terms of a higher level of parts commonality and reduced costs and logistical footprint.
The number of devices already sold to Ukraine and maintenance requirements of their operators are such that we can talk of the need of establishing in Ukraine a service center to be responsible for repair and maintenance of PCO S.A. night vision goggles. This would substantially improve the quality of services provided to end users.
For now, it can take several months to repair a device. This is because the repair is done in Poland, and there are some bureaucratic procedures that need to be performed to get the device moved across the border, although the time of repair per se actually does not exceed a few days. Having this service center in Ukraine would improve equipment availability due to shortened servicing times and help improve the quality of the services provided. In this aspect, PCO S.A. is interested in establishing cooperation with a Ukrainian partner (including from among private companies) that would have the appropriate expertise and the will to take up the development of this business. PCO S.A., for its part, is ready to provide specialist training and to ensure the timely delivery of the required replacement parts and materials. Additionally, with an increase in the quantity and the range of the products sold, this service center would be able to expand its business scope to include maintenance, repair and upgrading of the entire range of PCO S.A. products. Beyond that, this Center would provide a high level of service and responsiveness to Ukrainian customers who should have access to all the benefits of using reliable, durable and easy and intuitive to use products by PCO S.A.
Another area wherein our Company has much to offer its Ukrainian partners addresses deliveries of equipment for Soldier systems. I'm talking about night vision goggles, sights and night vision/thermal imaging binoculars. These are the night vision monocular MU-3M, night vision goggles PNL-2ADM, as well as thermal imaging devices like the NPL-1T thermal imaging binocular and SCT-1M thermal imaging gunsight to name a few.
The experience of supplying these devices to the Polish Army and to customers in other countries, as well as of their extensive use suggests they can significantly expand the capability range of combat maneuver infantry squads and improve their effectiveness in combat. It is now indisputable that these devices are must-haves for special operations forces.
In this domain, the first product we are willing to offer our Ukrainian customers is the night vision monocular MU-3M KOLIBER. A current-generation, Soldier’s individual night vision device, the MU-3M KOLIBER is designed to provide situational awareness during night operations. It boasts being the lightest night vision monocular currently available in the global market. When fixed on a weapon, the device can be used as night sight (in cooperation with red-dot and holographic sights). Being compatible with all types of combat helmets, it can be mounted on a helmet bridge and used for night vision by vehicle drivers. The device is fitted with a 16mm image intensification tube. Equipped with modern aspheric lenses, the MU-3M KOLIBER is much shorter than the earlier MU-3 model – the overall length is 97 mm. The MU-3M can work with an infrared ClipIR attachment, thus enabling fused night vision in IR and thermal imaging modes.
It should be noted, for that matter, that soon there will be a demonstration of newer and improved device, the MU-3MS, which will be even smaller, lighter, and easier to use, and will provide expanded capabilities to soldiers performing their missions at night and in special conditions.
It may be noted that PCO S.A. enjoys a wealth of expertise and experience in implementing innovative technology solutions while developing devices for the Polish Future Soldier program, in which we participate as lead partner. With this expertise, we could therefore offer advanced electronics that can interface and communicate with information systems. Beyond that, we could assist in Soldier modernization programs, particularly by providing new camouflage fatigues, individual protective equipment, combat vests, as well as new weapons and ammunition.
As it has always been for PCO S.A., the Company offers optoelectronic devices for application on combat vehicles and tanks, as mentioned above. We are open to close cooperation with a partner who would be able to establish in Ukraine, with our support and with PCO S.A. technologies, a center for upgrading this equipment, taking advantage of local market awareness and end-user proximity.
Ukrainian reforms is key to greater opportunities for all
In Ukraine, there is ongoing process to reform the defense industry complex and bring it up to EU standards. Presidential signature, on July 5, 2018, of the “National Security Foundations” bill and enactment of the 2018-2028 Development Strategy for the Defense Industry Complex give hope for successful transformation of Ukraine’s security and defense sector and for the emergence of a more favorable environment for cooperation with foreign partners, which is key to building up trust and to expanding cooperation into new areas.
Another cause for optimism is the Ukrainian government’s planned lifting of restrictions on State-owned and State-managed defense industries privatization and on foreign investment in these industries, as announced by the Ukrainian National Security and Defense Council Secretary, Oleksandr Turchynov in late June 2018. This, if occurs, is going to give a new boost to Polish-Ukrainian cooperation in defense technology and economy.
Polish companies are interested in cooperation with Ukrainian partners. More significantly, some of them stand ready to step up cooperation by investing financially and technologically in this area. One of key preconditions for this to happen is creation in Ukraine of favorable conditions wherein foreign investors/companies will be granted security assurances for their investment in production growth in Ukraine and the technologies being transferred will be granted copyright protection.
If these conditions are there, then PCO S.A. would be interested to launch collaborative projects with companies of similar expertise, such as State-owned Izyum Instrument and Apparatus Factory (IIAF) or State-owned Photoprylad. Moreover, PCO S.A. stands ready to take part in restructuring and corporization process of Ukrainian defense industries. The Polish defense industry has gone through a lengthy process of reform and transformation; we have built up our own unique experience that could be applied to similar modernization in Ukraine.
Also of interest could be license-based collaboration or Ukrainian companies’ incorporation into the PCO S.A. supply chain, particularly of optics components, which is of interest to the Company in terms of diversifying component sources for PCO S.A. products.
Collaboration with IIAF could be mutually beneficial. PCO S.A. sees this company as being highly promising in view of production capacity and raw materials resources available to it, and it is of interest also as a potential partner in creating new opportunities for the production of modern optoelectronic devices for the two countries’ domestic markets as well as export markets. PCO S.A. is open to any form of collaboration with this enterprise, and estimates that this collaboration could be established without compromising competitive edge of the two companies’ product portfolios. PCO S.A. is willing to negotiate cooperation in whatever areas of common interest can be found, and is interested also in investing in capacity growth of IIAF.
Ukrainian-Polish collaboration in export markets could constitute a separate area of interest, and this potential collaboration looks highly promising. We could develop a good concept for cooperation that would much benefit both parties technologically and commercially. In particular, cooperation with Polish companies would enable Ukrainian partners to expand their presence in the European market, especially in countries keeping significant inventories of ex-Soviet combat vehicles that have become obsolete and therefore need an extensive upgrade and modernization effort. It is important to note that Polish partners can offer Ukrainians the stability and security of cooperation, which are valued so high by defense manufacturers.
Ukraine’s potential partners, including PCO S.A. have long been waiting for changes that would make Ukrainian legislation and legal entities' activities compliant with standards and requirements adopted by EU countries, including Poland. This will enable closer cooperation between Polish and Ukrainian manufacturers, each synergistically strengthening the other and their own countries.
We therefore hope for changes, shared perspectives and that expanded cooperation with Ukrainian partners will soon become part of our track record of accomplished goals and achievements.
Pawel Glica
PCO S.A. (Poland)
Board Member, Commercial Director
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