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Milipol’s Decline: From Private Arms Trade Success to State Control and Financial Strain
Background: Milipol’s Rise in the Hungarian Arms Trade
Milipol, formerly a dominant force in Hungary’s arms trade, experienced a significant decline in profitability after being nationalized. The company, once a highly successful private entity, regularly secured lucrative government contracts, including a framework agreement in 2020 for military ammunition procurement worth HUF 2 billion (approximately $2.7 million USD as of October 28,2025). Despite initial success, concerns over potential cartel activity led the government to attempt to block Milipol’s victory in that tender. 24.hu reported on these suspicions.
Founded by Herbert székely,a former advisor to János Fenyő (who was murdered in 1998),and Ferenc Ecsedi,a confidant of Sándor Csányi,Milipol established itself as a key player in supplying the Hungarian national defense and police forces.in 2022,the company reported a profit of HUF 2.2 billion (approximately $3.0 million USD as of October 28, 2025).
Milipol held NATO supplier certification and maintained exclusive distribution agreements with approximately 90 foreign arms manufacturers.
Nationalization and Transfer of Control
The Hungarian government ultimately transferred ownership of Milipol from the Ministry of National Economy (NGM) to the Ministry of National Defense (HM). This move followed a period of declining profits after the company came under state control. However, even during the transfer process, the NGM attempted to extract HUF 650 million (approximately $885,000 USD as of October 28, 2025) from the company. 24.hu detailed this last-minute financial maneuver.
Financial Impact of State Ownership
The shift to state ownership appears to have negatively impacted Milipol’s financial performance. The significant drop in profits raises questions about the efficiency and strategic direction of the company under government control. Further investigation is needed to determine the specific factors contributing to this decline, including potential changes in procurement practices or operational inefficiencies.
