Pakistan Ordnance Factories’ (POF) track to competitive growth (Part 2)

This is a three-part series discussing Pakistan Ordnance Factories’ (POF) development and long-term commercial engagement plans. Part one offers a broad overview, especially of 2016, in POF’s activities and the Government of Pakistan’s focus on steering the company to be commercially competitive. It also examines POF’s memoranda-of-understanding (MoU) with Czech and Polish companies and the relevance of those MoUs to POF’s plans. Part two studies POF’s letters-of-understandings with Fiocchi, CSG, and PSG in relation to its hopes for commercial viability. Part-three concludes with an overview of POF’s new product catalogue, which will comprise of licensed off-the-shelf and domestic designs.

Linking Pakistan Ordnance Factories (POF) to other Supply Chains

In tandem with memoranda-of-understanding (MoU), which constitute inked contracts, POF also signed four letters-of-understanding (LoU) with Italian, Czech, and Polish companies during the 2016 International Defence Exhibition and Seminar (IDEAS). In Pakistan, these LoUs are firm commitments to seriously negotiate contracts, which would be finalized as MoUs.

The LoUs and the specific details of goals of these LoUs can be found The Nation.

The first LoU was with Italian ammunition maker Fiocchi for a ‘working group’ to examine one another’s production facilities and propose avenues of collaboration. Under the LoU, POF and Fiocchi agreed to earnestly study potential avenues of co-production and joint-export.

For example, POF will utilize Fiocchi for its small arms ammunition needs, while Fiocchi will source “brass, brass strips and GMCS (i.e. gliding metal clad steel)” from POF for “the manufacturing of small arms ammunition.” POF is working to become one of Fiocchi’s suppliers (and vice-versa).

The second LoU signed by POF was with Czechoslovak Group (CSG). POF will acquire technology from CSG in munitions production, most notably 155 mm base bleed artillery shells. In turn, CSG will procure both ammunition and components from POF.

The third LoU was between POF and Česká Zbrojovka (CZ):

“[POF and CZ] declared that they would intensively negotiate the delivery of complete technology for the production of small arms to … POF. Mutual interest refers to gradual launching of production in Pakistan, ranging from light assembly to maximum localization of production. Within this cooperation, transfer of technology as well as technical support, including technical training of … personnel for [POF] is expected.”

Specifics of this LoU will be discussed in part three.

The fourth LoU was signed with Polska Grupa Zbrojeniowa S.A (PGZ). In this LoU, POF and PGZ “would intensively negotiate [for] collaboration in the field of ammunitions procurement, supplies and related technology to … POF.” Like the LoU with CZ, PGZ will be providing technology and expertise to POF, enabling POF to gradually produce whatever it is acquiring for PGZ locally.

Italy, Poland, and the Czech Republic have essentially risen as POF’s marquee partners for technology, both in terms specific small arms and ammunition products and underlying manufacturing capacities. In addition, these countries, especially Italy and the Czech Republic, have committed themselves to helping POF in its efforts for self-sustaining commercial activity. For POF, this is a valuable bridge in terms of long-term export growth, which could be had by expanding the catalogue of products and services these firms draw from POF. Indirectly, POF could have access to the European and North American markets.