Tatra Defense Vehicle became an important part of the Czech defence industry, although it was established only three years ago. It belongs to the Czechoslovak Group of Michal Strnad and is exceptional as it is the first new arms industry enterprise established in the Czech Republic in the last thirty years. We can even say that it is the first completely new facility to produce ground military equipment in our country since the end of World War II. And the company´s armoured vehicles will be delivered to the Czech military already this autumn. Service tests of the new Pandur II vehicles are under way, and the Czech military should be thus richer by a total of twenty special vehicles: six command vehicles and fourteen of the communication version.
Tatra Defense Vehicle (TDV) belongs to the Czechoslovak Group engineering holding and is located in the Kopřivnice industrial grounds near the facilities of Tatra Trucks, the automaker, with which it also cooperates. Despite its short existence, TDV is a prosperous company that focuses on modern military ground equipment, supplies its products to the Army of the Czech Republic and cooperates with major world arms companies.
The price of the first large military order for twenty wheeled armoured personnel carriers is two billion Czech crowns, VAT included; of course, VAT goes back to the national budget, nevertheless it is a business worth 1.7 billion CZK, VAT excluded. This means that the company next year – when the largest part of the supply of special Pandur II vehicles to the Czech military is to take place – will be in an excellent economic condition, and that is only four years after it has been established from scratch. Mr. Tomáš Mohapl is the executive director of TDV.
How did you get this job? Being the head of an arms producing company, especially the newest in the country, is not the very usual career that can be planned in advance...
That's an interesting question for me, no one has asked me that yet. Well, I worked for 11 years in a group of companies that cooperated with CSG holding, so I was addressed directly. I was attracted by this interesting business field and the modern technology, that I can be in contact with here. I always liked good technology. I first worked in Excalibur Army for a year and a half and through this sister company I came to TDV. I have worked here for a year, i.e. I joined TDV two years after the company´s constitution.
How many countries do you supply military equipment to?
We at the moment focus primarily on the Czech Republic because of two major projects: Pandur II and TITUS. We do not trade with foreign counties or companies directly, but we cooperate with the CSG holding members within the Land Systems division, such as the Excalibur Army who has many years of experience with foreign projects. It is logical, because the companies of the holding closely cooperate with each other, and it would not be efficient to create a separate foreign trade organization for each of them.
How many countries use the Pandur vehicles produced by your company?
Pandur vehicles are used in several countries, but those vehicles have not been produced by us yet. In 2015, the CSG holding signed a strategic partnership agreement with the General Dynamics European Land Systems (GDELS). Thanks to this agreement our TDV holds a licence to produce the Pandurs, and it intitles us to deliver to selected markets, e.g. Central and Eastern Europe or certain regions of Asia. So, the Pandur vehicles produced here will serve the Czech military, and recently we have together with the Excalibur Army won a contract to deliver Pandur II armoured vehicles to Indonesia, together with the cooperating company, have managed to win a large contract to deliver the Pandur II armoured vehicles to Indonesia, so we are currently heading to this market. We already have a number of vehicles in our production hall finished. And, of course, there are talks going on with other countries where we would like to deliver, but this is subject to a trade secret.
Now, the service testing of two new Pandur special armoured vehicles – the communication and command types – for the Czech military is under way. How long do such tests take, what is being tested and what have been the results so far?
We started in the autumn last year with the site tests. Once the tests were over, follow-up testing followed, and that is normally done under the supervision of state institutions. This means an official assessment whether the vehicle meets the technical requirements of the military. We finished the procedure in June. Outcome: fully compliant. Most of the systems worked very well, only minor details needed some fine tuning. At the beginning of September, the last phase of the tests will be completed, i.e. the service tests. Once these will have been evaluated, which should be still in September, we can start with the production.
How many vehicles in total are we talking about?
Four vehicles we have already made: two communication or signalling if you like, and two command vehicles. The vehicle accommodates two operators, a driver and a commander, and a lot of the top-of-the-art electronic technology. There is a total of twenty vehicles under the contract, so we will start producing the remaining sixteen as soon as the final tests give us the green light. But we do not expect any major problems, so we already have made the vehicle bodies. There should be no changes, since this is a matter of primary protection for the crew and the prescribed explosion test has been passed successfully. The body withstood. In fact, we cannot modify the body significantly, and there is no reason to do so either.
We also started the production of components, where, as with the body, we do not expect any changes. The only thing we have not started yet is the assembly of complete vehicles, because some of the special systems may be modified. After all, these are two vehicle types, that are equipped with state-of-the-art technology, and the military may still have some demands, i.e. something might suit them better. Such things happen.
So, the entire contract should be available when?
Well, there will be several shipments. This year we will hand over the first four vehicles, always two of the two mentioned types, and we will be able to deliver the remaining sixteen vehicles next year.
Do they also have to be tested?
No. The approval procedure will be completed in September, then the serial production and the handover of vehicles will follow.
How many employees does TDV have, and what are the main professions or specializations of your staff?
Currently we have eighty-three (83) employees, and we also employ some external people when it comes to specific projects. We also make use of labour agency workers. Sometimes, as an exception, we borrow, so to speak, specialists from CSG holding when we need fast assistance in a project; this way we do not have to hire more core employees.
When it comes to employee structure, we can say we develop design a lot, that is why we have less operators than we have white-collar people. In our development department, there are thirteen designers, and I would like to have even more. I would like to reinforce this department, because there is the TITUS project ahead, and there is plenty of work.
Let me ask here: Where do you get the designers of armoured vehicles? It is a very specific field of expertise, not taught at school. Or do they teach somewhere how to design a tank?
I am always trying to have a mixed team, several older, more experienced people and larger number of young staff members whose carrier is still ahead of them. Then the younger ones can learn from the senior designers and developers and can gain their own experience this way.
You mean, the experieced ones know their trade and the young ones bring new ideas?
We cannot say it like that. Since we produce under a licence, we enjoy the support of our partners: GDELS (General Dynamics European Land Systems) and Nexter Systems. That means a large part of the design has been created by these companies. On the other hand, the new Pandur vehicles for the Czech military have been almost completely remodified by us. Of course, the chassis is the same as originally designed by GDELS, but the superstructure is ours, and it is completely new. We improved significantly the mine protection, there is a better ballistic protection, modern electronic equipment… We may say in a more approachable manner that these Pandurs for the Czech military are something like a mobile computing and data centres. They are also equipped with a 10-metre telescopic pole meaning the chassis must have hydraulic stabilization that the combat Pandurs do not have.
What is the guarantee for the Pandur vehicle? I mean, if it does not collide with Skoda Fabia on a highway…
The older types not yet produced by us – the Czech military were buying them from somewhere else, for a higher price than for what we sell them, by the way – well, their guarantee expired already. A consideration should be made whether to modernize these vehicles or overhaul them. Those vehicles have been in operation for 10 years now. Just imagine the development of technologies, both the hardware and the software, over those ten years.
Well, concerning the accident of Pandurs near Tábor… We repaired them last year based on an order placed by the Ministry of Defence.
Let me say a few more words in that regard. The media laughed that one small car can destroy so many armoured vehicles, and by the way it was not Škoda Fabia, it was an MPV of another brand. But we must realize that armoured vehicles have their bodies welded. The armour plate steel is very hard to be able to resist projectile penetration, and at the same time it shows low resilience to breakage. On top of that there are no crumple zones as we know them from standard personal vehicles, they cannot have such zones as the armour steel material does not allow it.
During the accident the armour plates crushed against each other and due to the non-existing crumple zones and the low breakage resilience of the armour steel the vehicle bodies cracked. Such a steel armour body cannot be re-welded or repaired to be able to guarantee the necessary ballistic resistance, on top of that, the Pandurs of the Czech military are amphibious, that means they have to be completely waterproof. It was necessary for that reason to build completely new bodies and equip them anew to be able to guarantee their functionality and usability in combat situations. What I am trying to say is that in case of contamination for example, it would be too late to find out, that the chemical filters are out of their place and thus not tight and functional.
By the way, in combat deployment such an accident would not occur, since the Pandurs would simply go over the automobile, destroying it, and nothing would happen to the armoured vehicles, maybe the paint on the bottom of the chassis would have to be retouched. Simply the motorcar would be shredded including its passengers. Paradoxically, it was not the automobile that destroyed the Pandurs in the „battle at Tábor“ as the media describe it, on the other hand it was the soldiers who at a cost of significant damage to the Pandurs saved lives of people travelling in that automobile. Of course, that is not so funny from the media perspective. This much I wanted to say regarding the famous Pandur accident.
Who do you consider to be your main competitor?
We have nobody like that in the Czech Republic, but there are quite a few worldwide. On the other hand, we have teamed up with really strong partners. For example, regarding the project for the eight-wheel combat vehicle (Pandur II), we teamed up with a European subsidiary of the American company General Dynamics, which is one of the largest arms companies in the world. And concerning the production of a six-wheel armoured vehicle, we teamed up with the Nexter and Tatra Truck Kopřivnice, and also with the Retia and Eldis of Pardubice.
You have only existed for three years, and I assume that revenue associated with the large contract of the twenty vehicles is going to start coming only gradually, as you deliver the vehicles. What did you live up to now?
To put it in simple terms, in the beginning we were repairing old technologies. For example, we did repairs of T-72 tanks. The present of our company lies in the production of the Pandur vehicles and the future lies in the TITUS program.
TDV was actually established as a new production facility within the Czechoslovak Group holding. Why did it come into being?
TDV was established as a completely new greenfield company mainly due to insufficient production capacities of the arms industry in the Czech Republic. We must realize that most of the military technology production was transferred to Slovakia due to a political decision made after the World War II, only a few production facilities remained in Bohemia and mainly the development took place here. After 1989 there was a decline in arms production and export, and so there was no need to expand production capacities in the Czech Republic. However, this has changed in recent years. Moreover, currently the older military technology life expires, and the possibilities of its modernization have been exhausted, so the new technology must come to the fore.
And this is also related to the role of the TDV within the holding. For example, the Excalibur Army has traditionally focused on the repair and modernization of existing and proven ground military technology, which fully used its capacities. The need for new projects and cooperation with foreign manufacturers of defence technology brought about the need to expand production and development capacities. That is why the TDV was founded, but it does not stand alone, of course we have synergic relations with other holding companies and cooperate with them on many projects. Today we largely focus on the production and development of new wheeled armoured vehicles, and that represents our future.
What is your financial standing and what are the prospects regarding the economic results next year?
At the beginning, of course, our owners invested a lot in our business, we were hiring employees… However, we were profitable already last year, when we achieved very good results: EBIDTA was over fifty million crowns and sales were around 340 million crowns. I consider this a decent economic result. So, that is a path from zero to profit within three years. Even though within the framework of the ongoing project of special Pandurs, the Czech military will not be invoiced until next year. In the following years we will complete the project of Pandurs for the Army of the Czech Republic and we are already working on the production preparation of 62 armoured vehicles based on the TITUS platform.
As far as I know, in addition, you are also working on the project of light combat vehicles of the Gepard series. What are they, if you can tell?
They are intended to be used by special and airborne units and have the potential to replace the outdated versions of Land Rover Defender 110 and 130 used in the Czech military. The basis of the novelty is the proven Toyota Land Cruiser 70 Series chassis, which offers much greater potential and performance than the original Defender, which is no longer produced by the way. The Dajbych company is the integrator of the project, regarding it, we have developed special consoles, brackets and mounts for the specified equipment and gear that we also install.