Despite the pandemic, Česká zbrojovka Group has big goals. The company wants to become a world leader in the production of small arms and reach sales figures of one billion euros by the end of 2025. It is a realistic goal, though, as the combined sales of CZG and Colt already exceed half a billion euros. The company has managed to keep its production running thanks to strict anti-epidemic measures, introduced in mid-March last year. Although some initial transport issues occurred last spring, as global trade was taken by surprise by the pandemic, the company has since managed to steady its exports as well.
"We see opportunities for further growth in contracts from both the military and law enforcement as well as the civilian market, where the demand for CZ products is really high. We also expect to get positive outcomes from the future cooperation between CZG and Colt in R&D and innovation," says Lubomír Kovařík, president and chairman of the board of directors of CZG – Česká zbrojovka Group.
Admission to the stock exchange and an opportunity for investors
"By entering the Prague Stock Exchange last year, we pursued two goals. We wanted to achieve maximum transparency to strengthen our credibility with our partners, particularly in international markets. On top, we were looking to raise funds to implement our growth plans and give investors the opportunity to take part," the company president explains his vision. The company's long-term goal is to strengthen its position in the United States and build or acquire production capacity in the US market. CZG plans to use the stock yields from the Prague Stock Exchange to finance the 100% acquisition of the iconic American manufacturer Colt as well as its Canadian subsidiary Colt Canada Corporation.
Strong domestic position and export to 90 countries
CZG delivers its products to more than 90 countries all over the world. In 2020, revenues in the US accounted for a total of 66% of the Group's total revenues for that year.
In the field of small arms and military & law enforcement accessories, NATO and the EU are priority markets for Česká zbrojovka, and its main partner are the Czech military & law forces (the Czech Army, the Czech Police and the Prison Service). This long-term relationship is based on a customer-oriented approach and a quality product range.
Česká zbrojovka has also had a long-term cooperation with the armed forces of Slovakia and Hungary, and the latter also involves technology transfer. Other armed forces contracts include Poland, Romania, Brazil or Thailand. "Our Bren 2 assault rifles are also used by the most prestigious anti-terrorist unit of the French gendarmerie GIGN or national park rangers in Kenya, where our weapons help protect wild animals and fight poachers," says Lubomír Kovařík.
APAC on the rise
The CZG holding has seen significant sales growth particularly in the Asia-Pacific (APAC) region. Singapore is a very attractive customer for example. "They always demand the highest quality and are also eager to pay for it. Public tenders for armament purchase for armed forces are conducted in a fully transparent manner and user testing plays a major role there. Singapore's military & law enforcement forces have a high reference value, as they are among the best in the region, and it is possible to say that they set the trend in armaments and equipment," comments Lubomír Kovařík. The company’s biggest contract in this market so far was the supply of nearly two thousand CZ P-07 handguns for the local Ministry of Interior in 2016 and 2017.
Indonesia is another strong market in the region, as the country regularly invests heavily in the armament of its military & law enforcement forces. Every year, CZ products are supplied mainly to the services of the Ministry of Interior.
"However, it is Thailand who has long been our biggest customer in the region. Last year we delivered goods worth more than 170 million CZK to the market, and we are also in negotiations for some of the largest business opportunities for the military & law enforcement," the chairman reveals. "We see a huge potential in India, as we are launching cooperation with local partners in a technology transfer project there. We have also supplied ten thousand CZ P-10 C pistols to the police in Malaysia, which was our largest delivery in these markets to date. Last but not least, the Philippines is the fastest growing market in the region for us, thanks to both the civilian sector and security forces. But that is not all – just a few examples of our activities in APAC," Mr. Kovařík sums up.
Client as a co-creator
"As the first company in the world in our field, we launched a fully functional configurator that allows several hundred thousand combinations of sporting weapon settings based on individual wishes and preferences of the end customer. Each weapon is a unique piece, manufactured in our plant. During the covid-19 pandemic, when retail stores are closed, the configurator has become our main distribution channel in the Czech Republic," the chairman explains.
Česká zbrojovka, a subsidiary of CZG, launched the project of the online weapon configurator in October 2019. Any customer who holds a firearms license can assemble a sports weapon exactly according to their needs and add unique accessories in terms of functionality and design. Any individual changes which the customer incorporates into the design are instantly displayed in the preview together with the price. After the order is finished, the configured weapon is assembled directly in Česká zbrojovka and shipped to the customer within two weeks. This new service is now available in the Czech Republic, Slovakia, Poland and Germany, with more countries in the pipeline.
Customers respond well to innovation
Despite the difficult times for the global economy hit by the pandemic, the company has managed to keep the flow of innovation into the market. "I see this as one of the most important factors of our success. Through innovation we met our 2020 plans to produce and sell the highest number of weapons in the company's history," Lubomír Kovařík emphasizes. "We have reaped the rewards of our long-term investment in R&D, use of state-of-the-art technologies and cooperation with universities and research institutions." Česká zbrojovka Group regularly invests around 100 million CZK a year in R&D, with around a hundred employees taking part in these activities.
CARDAM, a joint venture of Česká zbrojovka Group, the Institute of Physics of the Czech Academy of Sciences and the company Beneš and Lát, plays a key role here. In addition, Česká zbrojovka has collaborated with a number of other research institutes, universities and secondary schools, to whose students the company provides scholarships, assigns topics for MA and BA theses and offers internship programmes.
Digitization is accelerating
The company is also benefitting from the use of advanced digital technologies in recent years, including virtual development of new products and their simulation or production planning and management. "The pandemic has accelerated the digitization process. Last year, we started our own virtual streaming studio, which allows us to launch new products using a combination of pre-recorded and live inputs as well as a digital stage. This has been an important step, with all trade fairs cancelled and travel restrictions in place," Mr. Kovařík concludes.
The main manufacturing company of the CZG holding headquartered in Uherský Brod.
Subsidiary wholly owned by CZG. It specializes in the international trade of military equipment and materiel. It also provides financing, training and support services throughout the entire life cycle of the products and technologies delivered.
CZ-USA based in Kansas City, USA, owned by CZG, mainly imports its products from the Group’s manufacturing facility in the Czech Republic, but also imports CZ-USA Field Sport shotguns from Turkey.
CZG acquired the US handgun manufacturer Dan Wesson with the aim of expanding its handgun portfolio with revolvers and the popular 1911-type pistol model. Thanks to its long history and specialization in revolvers, Dan Wesson is considered an upmarket brand in the US.
The modern indoor complex for sport shooting in Quimper, France. Its aim is to promote the shooting sport and raise awareness about gun safety. The project started in cooperation with Eric Grauffel, seven-time world champion and legend of practical dynamic shooting. The Academy hosts various events, competitions and courses bringing together the world’s best shooters and the high-end products of Česká zbrojovka.
Spuhr i Dalby AB
Spuhr is an internationally renowned Swedish manufacturer of optical mounting solutions for weapons. The CZG holding has been its minority shareholder since last May.
Zbrojovka Brno is a firearms manufacturer with a rich production history. It mainly supplies hunting rifles and provides customised solutions for the Group's clients, using the CZ online weapon configurator.
A unique research and development centre which provides applied research and development services, complete engineering solutions for creating new applications and manufacturing processes, and assists companies in applying knowledge and know-how in the new area of additive design and manufacturing. CARDAM is a joint venture of the Institute of Physics of the Academy of Sciences of the Czech Republic and the industrial companies Beneš and Lát and CZG.
4M Systems' activities include the design, production and sale of tactical equipment for armed forces, such as the military, police, customs, prison service and border guards. 4M Systems enhances the Group's ability to offer its customers a wider range of products in complex orders and complete rearmaments.
Written by Jana Jenšíková and Věra Vortelová
Photo: archive of CZG