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# Poland Backs €293 Million Defense Manufacturing Expansion at Three PGZ Companies
- URL: https://www.adriadefense.com/poland-backs-eur293-million-defense-manufacturing-expansion-at-three-pgz-companies/
- Published: 2026-10-29T06:00:00.000Z
- Updated: 2026-10-29T06:00:01.000Z
- Description: Poland's PGZ announces €293 million in investments at Jelcz, Rosomak and Bumar-Łabędy, supported by €87.6 million in potential tax relief.
- Author: AdriaDefense Desk
- Tags: Poland, PGZ, CEE, Industry, armored vehicles

Poland has announced approximately €293 million in planned defense manufacturing investments across three companies belonging to the state-owned Polska Grupa Zbrojeniowa (PGZ), covering military vehicle production, armored vehicle components and industrial modernization.

The investments, announced on October 28 in Racibórz by Finance and Economy Minister Andrzej Domański, involve Jelcz, Rosomak and Zakłady Mechaniczne Bumar-Łabędy. The government has approved investment support worth up to €87.6 million through corporate income tax exemptions, while the projects are expected to create more than 220 new jobs.

The initiative is part of Poland's broader effort to expand domestic military manufacturing capacity and strengthen its defense industry supply chains as demand for military vehicles and equipment continues to grow across Europe.

## Jelcz and Rosomak to Expand Production at Former Rafako Site

Jelcz will invest approximately €106.5 million in a new manufacturing facility in Racibórz, using industrial infrastructure previously operated by the bankrupt engineering company Rafako. The investment will support the production of heavy military vehicles and associated components.

According to details presented during the announcement, Jelcz is targeting annual production capacity of approximately 700 military vehicles at the site. The company expects to begin initial assembly operations before the end of 2026, although full-scale production will require further development of the facilities.

Rosomak will invest approximately €25.4 million to establish an integrated production line for welding armored vehicle hulls at the same industrial complex. The new capability is intended to strengthen Poland's domestic production of components for the Rosomak wheeled armored personnel carrier, with production expected to begin in 2027.

The Racibórz investments will reuse existing industrial halls and infrastructure, creating opportunities for local manufacturers and suppliers to participate in Poland's growing military vehicle production network.

## Bumar-Łabędy to Invest €161 Million in Armored Vehicle Manufacturing

The largest individual investment will be undertaken by Bumar-Łabędy, which plans to allocate approximately €161.4 million to modernize and expand its production infrastructure in Gliwice.

The program includes upgrades to manufacturing facilities and industrial technologies needed to increase the company's capabilities in armored vehicle production. The investments are also intended to support Poland's efforts to expand domestic industrial participation in the K2 main battle tank program.

Bumar-Łabędy plays an important role in Poland's armored vehicle industry, including the maintenance, modernization and production of tracked military platforms. Expanding its industrial infrastructure could allow the company to assume a greater share of manufacturing activities as Poland develops its domestic armored vehicle supply chain.

The latest investments come as PGZ strengthens its international industrial partnerships. As [AdriaDefense reported on October 28](https://www.adriadefense.com/uk-and-poland-sign-defence-plan-to-expand-missile-drone-and-ammunition-production/), Poland and the United Kingdom have also agreed to deepen cooperation in missile, drone and ammunition manufacturing.

## Tax Incentives to Support Defense Industry Investment

The investment support was approved through the Katowice Special Economic Zone under the Polish Investment Zone framework. Rather than providing direct cash grants, the mechanism allows eligible companies to benefit from corporate income tax exemptions linked to qualifying investments.

The three companies' combined projects represent approximately €293 million in planned capital expenditure, supported by potential tax relief of up to €87.6 million.

Poland expanded the eligibility of its investment support framework in July 2025 to include additional defense manufacturing activities, including weapons, ammunition and explosives production. Depending on the location and company size, eligible projects can receive tax advantages covering between 15% and 70% of qualifying investment costs.

The government expects the latest projects to generate at least 220 additional jobs while supporting industrial development in Silesia. For PGZ and its subsidiaries, the expansion represents another step toward increasing domestic manufacturing capacity, reducing dependence on imported components and strengthening Poland's position within European defense supply chains.