In a significant defense industry milestone, the Albanian government has granted its state enterprise KAYO full authorization to manufacture and market military weapons, ammunition, and equipment, aiming to reestablish a sustainable domestic arms production ecosystem. The decision, approved by the Council of Ministers, is designed to expand national defense capacity and reduce reliance on foreign suppliers.
Under the policy, KAYO will manage both production and sales operations, either independently or via subsidiaries, supplying Albania’s defense institutions and other public agencies. The government has also mandated that all security-related organizations must consult KAYO before opening public tenders, ensuring the state-owned firm receives priority for local defense contracts.
If KAYO is unable to deliver within a 30-day period, agencies are permitted to resume traditional procurement procedures. However, once production is available, direct negotiations between KAYO and the requesting authority are authorized to streamline contract finalization and accelerate defense procurement timelines.
This reform aligns with Albania’s broader efforts to revitalize its dormant defense manufacturing base. The government has initiated projects to modernize Cold War-era arms facilities, including Polican’s munitions factory and the Gramsh weapons plant, known historically for assembling Kalashnikov rifles. In parallel, Tirana’s partnership with NATO’s Support and Procurement Agency focuses on upgrading ammunition storage and logistics infrastructure, ensuring compliance with NATO standards while strengthening Albania’s role in the regional defense supply chain.
