HELSINKI/VILNIUS — Ukrainian defense companies are expanding production in Europe through separate agreements to manufacture Ukrainian-designed drones in Finland and ammunition in Lithuania.
Airlogix Plans Drone Production in Finland
Ukrainian drone manufacturer Airlogix signed a Letter of Intent with Finnish company Innokas on August 19, 2026, to establish production of Ukrainian-designed unmanned aerial systems in Finland. The agreement was signed at the DALO Industry Days defence exhibition in Denmark by Airlogix Chief Investment and Financial Officer Oleksandr Androshchuk and Innokas CEO Janne Kostamo.
The partnership is part of the Build with Ukraine initiative, which aims to expand production of Ukrainian unmanned systems in Europe and increase supplies to Ukraine’s defence forces.
Airlogix will provide its technologies and engineering solutions, while Innokas will handle localization, industrial scaling and manufacturing of regulated products in Finland. The companies plan to develop the legal, technical and production framework and are considering establishing a joint venture.
No production capacity, investment amount or operational timeline has been announced. Finnish reports have indicated that facilities could be located in the Oulu region, although this remains unconfirmed. A government-level technology transfer agreement would also be required before production begins.
Airlogix was founded in Kyiv in 2020 and initially developed civilian cargo drones before shifting to military systems after Russia’s full-scale invasion in 2022. Its main product is the Gor (GOR) tactical reconnaissance UAV, which company data lists as having up to four hours of flight time, a 3,500-metre operating altitude, 260 km flight distance and around 80 km tactical range. The UAV is used by Ukrainian forces for artillery adjustment and target detection.
In July 2026, Airlogix also agreed with Czech PBS Group to localize production of PBS turbine engines in Ukraine for drones used by Ukraine’s defence forces. The company is also working with Canada’s Sentinel Research and Development to produce and supply drones to Ukraine under an agreement between the Canadian and Ukrainian defence ministries.
DEMZ to Build Ammunition Plant in Lithuania
Separately, Ukrainian defense company DEMZ (Dnipro Electromechanical Plant) signed an investment agreement with Lithuania on August 14, 2026. Lithuanian Economy Minister Edvinas Grikšas and DEMZ chief Jevhen Muzykin signed the agreement in Vilnius.
DEMZ will manufacture ammunition and components at two locations. Metal shell components will be produced at existing facilities in the Alytus Industrial Park, while a new assembly plant will be built near Balbieriškis in the Prienai district, on a roughly 30.6-hectare site in Ąžuolai village.
Construction is scheduled to begin in autumn 2026, with production expected to start by the end of 2027. The project is expected to create up to 450 jobs, and its products will meet NATO standards.
Initial supplies are intended for the Ukrainian Armed Forces, with potential later supplies to NATO countries and other allies. The exact investment value has not been disclosed. Lithuania’s Ministry of Defence has also signed a related memorandum of understanding with DEMZ.
DEMZ employs about 4,000 people and shifted to military production after 2022.
The two agreements reflect Ukraine’s broader effort to expand defense production through partnerships and manufacturing facilities in European countries, increasing industrial capacity while strengthening defense-industrial cooperation with European partners.
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