Northrop Grumman (NOC:US) is considering the production of 120-millimeter tank ammunition in Poland to support the increased defense production capacity of the U.S. ally, according to CEO Kathy J. Warden reported the statement on Thursday.

Northrop Grumman's CEO Kathy J. Warden stated, "We are looking at co-production opportunities for 120." While the talks are advanced, the company is still in the process of identifying suitable industrial partners and contract structures.

The consideration is due to the fact that countries geographically close to Russia such as Poland, Finland, and Germany are exploring deals to manufacture U.S. weapons in Europe. This includes negotiating new arms deals, expediting existing contracts, and reevaluating the required munitions volume in light of the war in Ukraine.

Poland, in response to Russia's invasion of Ukraine last year, has committed to a significant increase in defense spending, aiming to allocate 4% of its gross domestic product to defense and double the size of its army. Last year, Poland agreed to acquire more than 360 Abrams tanks from the United States.

Meanwhile, Poland's Mesko, part of the state-owned PGZ armaments group, is in the final stages of negotiating the deal according to the ammunition maker's deputy chief executive, Przemyslaw Kowalczuk. The deal is expected to boost Mesko's production of 120mm ammunition to a minimum of 50,000 to 70,000 rounds annually from the current several thousand.

Warden emphasized Northrop's intention to expand its European business, not only in Poland but also in other nations with similar product lines. She stated, "Germany, Norway, we already have a significant presence in the UK today, we have a presence in Italy and France, so really a broad-based European business."

Prior to the announcement of such intentions, Congressman Josh Gottheimer invested in the defense firm back on September 26, when the stock closed at a price per share of $426.58. Since his trade, the stock has surged nearly 9% in value.