In his explanation, Nufi emphasized that the Albanian government is pursuing a “holding” model for the development of the defense industry through KAYO, which operates in partnership with both domestic and international private capital.

According to the minister, the state‑owned company KAYO has been mandated to act as a coordinating and licensing structure for the defense industry, rather than as the primary manufacturer itself.

He emphasized that the model being implemented aligns with established international practices, relying on strategic partnerships to build and expand production capacities.

From its inception, KAYO was conceived not as a direct manufacturing enterprise retaining only limited responsibilities to be exercised independently. Its primary purpose has been to function as a holding company, co‑producing alongside private partners with industry expertise and the financial capacity to invest in the sector.

By collaborating with KAYO, which is wholly owned by the Ministry of Defense, the government seeks to advance Albania’s defense industry and produce military equipment for the Armed Forces, national security structures, and for potential export.

The minister emphasized that this model has not been invented in Albania.

He said: “There is a certain prejudice regarding the company’s operations, yet it is an international model that functions in other countries as well. The objective is to mobilize private, rather than state, capital for the establishment of an industry. The defense sector is among the most complex fields in which a government or group of businesses can operate, as it requires strict oversight and entails additional legal guarantees. The production and sale of arms are always regulated within the framework of state‑to‑state relations.”

The minister noted that the state‑owned company KAYO operates independently, while its licensing authority is also distinct.

He stated: “Albania is not a country unfamiliar with military production, as we have historically been engaged in arms manufacturing. The purpose of KAYO has been to establish a network for the defense industry, directly connected to our obligations within NATO.”

The minister noted that rising global tensions, including the war raging in Ukraine and developments in the Middle East, have heightened the importance of arms and munitions production.

Nufi emphasized that, in this context, KAYO aims to ensure a stable supply for the Armed Forces and security structures, while reducing reliance on imports, in line with Albania’s NATO commitments.

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