00:00Υπότιτλοι AUTHORWAVE
00:30Υπότιτλοι AUTHORWAVE
01:00Υπότιτλοι AUTHORWAVE
01:29Numbers that are easy to refer to is a public study that was presented by a British research institute back in March 2005 and they stated that Russia can make available 5 million artillery shells per annum.
01:413.5 is newly produced and roughly 1.5 is from either stockpiles or donations from the Russian allies.
01:47The same article presented that the European production capacity, including the UK but excluding the US, is 720,000 shells.
01:54So you have a 6x difference on Russian capacity versus European capacity.
01:59And the whole NATO philosophy of deterrence is to make sure that both parties have somewhat equal strength to prevent the other from attacking the other.
02:06And well, time will tell if this delta continues growing, the risk of the conflict will increase unless we can be on par.
02:13Give us a sense right now of how reliant Europe is on TNT and explosives produced in other parts of the world.
02:22Europe only has one TNT manufacturer today, located in Poland, named Nitrogen, controlled by the Polish state.
02:29And they're doing a great job, but they produce far from enough capacity.
02:32So if you go one step up in the ammunition production chain, you have a lot of manufacturers of ammunition.
02:37So you've got BAE in the UK, you've got NEXTER and KNDS in France, you've got Rhein-Mathal, NAMU, etc.
02:44All of these are reliant on explosives, but barely none of them produce their own explosive.
02:49So during time of peace, they could rely on Poland to supply them.
02:52Now they cannot.
02:53And so the vast majority of TNT currently used in Europe is coming outside of NATO countries.
02:58In many cases, Far East Asia.
02:59What kind of risks does that carry, in your opinion, that there is a reliance on producers outside of Europe?
03:05Countless.
03:07So only if we go back to the COVID pandemic, we saw that the UK was producing a vaccine, but they were applying an export ban to it.
03:15If something would happen in Poland, I am very certain there would be an export ban on TNT.
03:20Same goes for the Asian country that is currently exporting.
03:23If there will be a conflict, well, in their proximity, there will be an export ban to it.
03:27On top of that, in order to transport explosives from Asia, you need to go around the Horn of Africa,
03:33because the Suez Channel is closed due to the conflict in Yemen and the boats being attacked.
03:37So the lead time is more than two months, if the ship even reaches your ports.
03:42On top of that, you have the political risk and you have uncertain agendas from the countries that you're buying from.
03:47And you specifically, you're, I understand, hoping to be at full production capacity by around 2027.
03:54Give us a sense of what your production capacity could be as Sweden ballistics and how much of a role you can play in kind of ramping up the amount of explosives that Europe actually produces.
04:04So our environmental permit is for 4,500 metric tons and one artillery shell holds roughly 10 kilograms per shell.
04:12So easily calculated, roughly 400,000, 450,000 shells.
04:15It's far from matching the Russian capacity.
04:17We would need 10 of these manufacturing plants to be on par with 5 million shells coming out of Russia, but it's a major contribution.
04:23Now, we know that there's a big push in Europe right now to ramp up investment in defense.
04:29We have the Rearm Europe plan, which could release as much as 800 billion euros by 2030.
04:35How do you see Sweden ballistics contributing to this plan?
04:39And are you confident that all of these will work and can actually undo decades of underinvestment in this sector?
04:47Well, ready is very hard to define because nobody knows what the world will look like five years from now.
04:51In terms of the safe funding, it already has a requirement that 65% of the cost of components should be manufactured within Europe.
04:59In order to have EU manufactured components, we play a part in that puzzle.
05:03The industry is asked to take huge commercial and financial risk to ramp up production,
05:09while the actual procurement orders from the armed forces in the member states are not coming in as fast.
05:15So I think the risk profile is suboptimal right now.
05:19The industry needs to carry a lot of risk, which is a benefit as a new player in the industry,
05:23because we don't have the same shareholders to care for, cater for, and we don't have the same stock price that we consider on a quarterly basis.
05:30My job here is to make sure that we prevent the future conflict, and making short-term profit is not high on my agenda.
05:38Some would say, well, this big portion in investment in the defense sector is going to benefit big corporations and entrepreneurs like yourself.
05:48But do you think also that the benefits can spill over to the local economy?
05:53Will it create more jobs and so on?
05:55100%.
05:55So I'm going to take this number with a pinch of salt,
05:59but I read a number that the European member states are spending 200 billion euros every year on defense material.
06:04More than 60% of that is purchased from American producers.
06:07If those components were to be manufactured in the EU, we would create more than 10 million jobs.
06:12So there is a real measurable opportunity, which also comes with the benefit of our improved security.
06:18You say on the website of Sweden Ballistics that the company is dedicated to strengthening NATO's resilience and preventing military conflicts
06:28through the production of defensive capabilities, which is something you've explained to us.
06:32Some would argue that the idea of an explosives factory is not compatible with the idea of preventing conflicts.
06:40How do you see it?
06:41I think we can look at the results of history.
06:44So NATO is, what, 75 years old now?
06:47And it's the most successful preventive defensive alliance in the history of the world.
06:51So no NATO country has been invaded since its creation.
06:55So the likelihood of these ornaments actually being used, I would say, is quite small.
07:00And that's the whole purpose.
07:01So the risk of going into a conflict is higher if you have a difference in the production capacity with your aggressor.
07:09Another reason why I'm doing this is if you look at the global crises, environments, climate, starvation,
07:14none of them will be solved in a state of war.
07:17So the fundamentals to addressing climate is to make sure there is no war.
07:22Because if there is a war, there will be no resources allocated to solve the big problems.
07:26So I see this as kind of a step zero.
07:29This needs to be stable to solve the big problems.
07:32But my ambition is to repurpose any cash flow that this business generates
07:36into further strengthening our resilience and preventing the conflict.
07:39So as long as we have a world where there is a conflict in our proximity,
07:43I would like to make sure that it stays in our proximity and not at home.
07:46Great. Well, Jochen, thank you so much for joining us on The Big Question.
07:49Thank you for having me.
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