Kongsberg Gruppen Expanded Global Defense Capacity
The firm is scaling manufacturing in Australia and the U.S. to meet rising demand for defense systems.
Updated on Oct. 3, 2026 in Business Strategy
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Kongsberg Gruppen expanded its defense manufacturing footprint through international acquisitions and new facility construction throughout 2026. This operational pivot follows the February 2026 spinoff of its maritime division, positioning the firm to pursue aggressive growth targets.
Why it matters
Kongsberg aims to capture surging government defense spending, targeting annual revenue of NKr100 billion by 2029. To achieve this scale, the firm is shifting from a reliance on domestic Norwegian production to an international manufacturing model that embeds its supply chain directly within key allied markets.
Kongsberg reported a 31% revenue increase in Q2 2026, supported by an order backlog that reached NKr157 billion at the end of 2025. During the second quarter, the firm deployed NKr3.7 billion toward acquisitions and capacity expansion.
The players
Kongsberg Gruppen
A Norway-based aerospace and defense contractor that specializes in missile systems and integrated defense technology.
Zone 5 Technologies
A developer of specialized defense technologies acquired by Kongsberg to enhance its product portfolio.
Sonatech
A California-based provider of sonar and underwater technology integrated into Kongsberg's defense manufacturing ecosystem.
The details
The strategy relies on vertical integration through localized manufacturing to bypass supply chain bottlenecks and meet government delivery schedules. By acquiring firms like Zone 5 Technologies and California-based Sonatech, Kongsberg is internalizing specialized defense technology while concurrently opening new missile production lines in Australia and the U.S. This geographic diversification allows the firm to fulfill large-scale defense contracts, such as the NKr16 billion order from Poland and the $100 million U.S. Air Force deal, with greater responsiveness.
Timeline
January 2026: Kongsberg signed a NKr16 billion contract with Poland.
February 2026: The company completed the spinoff of its maritime division.
June 2026: The acquisition of Zone 5 Technologies was finalized.
July 2026: A $100 million U.S. Air Force contract was awarded.
September 2026: Kongsberg acquired Sonatech of California.
Market Landscape
Kongsberg's infrastructure investment aligns with a broader industry trend of scaling production to meet the $139 billion in allied investment requirements. This marks a strategic shift from traditional export models toward a localized production presence in major allied nations.
Operators in the defense supply chain should monitor Kongsberg's international expansion as a signal of shifting procurement expectations toward localized, multi-site production. Smaller firms should evaluate if their current capacity can meet increased prime contractor demand for regionalized manufacturing support.
The takeaway
Kongsberg demonstrates that achieving massive scale in defense requires diversifying manufacturing beyond home borders. Monitor your key suppliers' capital expenditure plans to determine if they are investing in the geographic resilience necessary to meet future government contract requirements.
Further reading
For more on how firms scale operations, read our coverage of Business Strategy.
Source note: This article includes information reported by MoneyWeek.
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