KAYO (Albania)

KAYO is a state-owned Albanian defense and security company established in 2024. Headquartered in Tirana, the company was created to revitalize Albania's military industry by inheriting and modernizing the production capacities of the Mjekës Explosives Plant, Gramsh Mechanical Plant, and Poliçan Mechanical Plant.[1]

History

Albania has inherited from the past a military industry which today does not exercise or meet many standards for modern production.[2][3] In May 2024, the Albanian Parliament presented a draft law on the creation of a state-owned company for arms production, aiming to reactivate the arms industry in Albania. Earlier in April 2024, the Minister of Defence preceded the reawakening of the military industry in Albania.[4] During his speech in parliament, the government's strategy to attract foreign investors to reinvigorate the country's three idle production sites in Polican, Elbasan and Gramsh was revealed. [5]

The three production sites were built in 1962 to supply the state's armed forces with ammunition, cannons, aviation bombs and mortar shells. With the restructuring of the Albanian military forces following the collapse of the communist regime in 1990, demand for the plants' production fell drastically, leading to the end of production.[6]

The idea of reopening arms production facilities was first articulated during a summit in Tirana focused on Ukraine. President Volodymyr Zelensky highlighted the need for armament production for Kyiv.[7]

In August 2024, the government allocated 150 million lek (approximately €1.5 million) as initial capital for KAYO, as part of a broader 440 million lek package for the restructuring of the defense sector.[8]

On 9 April 2025, KAYO signed a memorandum of understanding with Italian shipbuilder Fincantieri to jointly explore naval infrastructure development, ship construction, and training initiatives. The agreement was signed in Durrës in the presence of the Albanian and Italian defense ministers.[9]

International Collaboration

Strategic Partnership with Fincantieri

On April 8, 2025, KAYO signed a Memorandum of Understanding (MoU) with the Italian shipbuilding company Fincantieri The agreement, signed in Durrës in the presence of Albanian Prime Minister Edi Rama and Italian Defense Minister Guido Crosetto, aims to develop Albania's naval defense infrastructure.[10]

The key goals of the partnership include:

  • Constructing and maintaining both military and civilian vessels.
  • Implementing professional training programs to build domestic expertise in shipbuilding.
  • Creating a sustainable shipbuilding ecosystem in the Adriatic region.

This collaboration is part of a wider strategy to strengthen industrial cooperation between Albania and Italy and position Albania as a future naval industry hub in the Mediterranean.

Engagement with International Defense Investors

As of March 2025, KAYO had received 21 expressions of interest from international defense companies seeking to invest in Albania's emerging defense industry. The proposals cover a wide range of sectors, including:

  • Production of ammunition and artillery systems.
  • Development of military drones and other advanced defense technologies.
  • Establishment of joint ventures for research, production, and export.

Negotiations are ongoing with five of these companies, highlighting KAYO's role as a facilitator of foreign investment in the defense sector.[11]

Collaboration with Timak

In April 2025, KAYO entered into a collaboration with the Albanian private firm Timak to establish a production hub focused on military and emergency vehicles. The facility is expected to produce:

  • Armored and non-armored vehicles for military and police use.
  • Firefighting and emergency response vehicles.
  • Military uniforms and support equipment.

This initiative aims to meet national needs and expand Albania's capacity to contribute to international defense markets while ensuring environmental and safety compliance.[12]

References

  1. ^ KAYO SH.A – About Us
  2. ^ Faktoje (2 May 2024). "Weapon production line for Ukraine? Albania with eyes towards the West". en.Faktoje.al. Retrieved 14 April 2025.
  3. ^ Nacional, Radio (4 April 2025). "Building Defense Capacities in Albania in the Context of Global Political Uncertainties: A Strategic and Geopolitical Analysis". RADIO NACIONAL. Retrieved 14 April 2025.
  4. ^ "What is known so far about the state company for the production of weapons 'Made in Albania'". Telegrafi. 7 June 2024. Retrieved 5 January 2025.
  5. ^ "Albania to set up state weapons company as it seeks to revive arms industry". www.intellinews.com. 25 July 2024. Retrieved 14 March 2025.
  6. ^ Hodo, Genta (17 April 2024). "Albania plans to reopen weapon production plants | Albania Politics News | SeeNews". seenews.com. Retrieved 14 March 2025.
  7. ^ "Albania to resume arms production and sales after decades long break". Albanian Times. 27 July 2024. Retrieved 5 January 2025.
  8. ^ "Albania eyes the military industry, the Government allocates millions for KAYO". Telegrafi. 2 September 2024. Retrieved 16 April 2025.
  9. ^ Bosworth, Alan (10 April 2025). "Fincantieri/Kayo signs MoU to support the development of Albanian naval sector". Baird Maritime / Work Boat World. Retrieved 16 April 2025.
  10. ^ Fincantieri signs memorandum of understanding with KAYO
  11. ^ SCAN TV – Military Industry in Albania
  12. ^ Albanian Times – Edi Rama Unveils Military Equipment Hub Plan
  • This article reflects developments as of May 2025.*
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