Russia’s Message to Estonia Behind the Milrem Arson: Stop Supporting Ukraine or We Will Attack Your Facilities

The Tallinn facility of Estonia’s leading defence industry company Milrem Robotics was damaged in a fire on August 15 now believed to have been arson, and likely an act of sabotage masterminded by Russian special services. Three suspects have been detained in Latvia and a court granted applications to arrest two of them. Milrem is one of only two Western manufacturers supplying unmanned ground vehicles to Ukraine, and Russia has twice raised a bounty on the capture of a THeMIS at the front. Damage was limited because a local resident reported suspicious activity and alerted the emergency centre at 1:45 am. As far as is known, this is the first such incident involving a defence industry company in Estonia, and KAPO is urging companies to strengthen both physical and digital security.

Key Developments This Week

  • Milrem: work continues: CEO Kuldar Väärsi says the fire has no significant impact on operations or client deliveries, and that over 150 THeMIS unmanned ground vehicles will be in Ukraine by the end of this year. If the investigation confirms Milrem was targeted for its activities, he says it will only strengthen their resolve
  • The pattern, not an escalation: Reserve officer Ilmar Raag argues the arson fits the established pattern of Russian hybrid attacks on the logistics of European aid to Ukraine, executed by people recruited online rather than trained saboteurs. Comparable incidents have hit a Czech drone and optics maker, a Lithuanian supplier to Kyiv, Bulgaria’s EMCO and the KNDS Ammo plant near Rome
  • Estonian-owned shopping centre struck in Kryvyi Rih: Russian drones hit Ukraine’s largest shopping centre in the city on August 21, killing 16 and wounding 140, with a second drone striking the roof half an hour later in what Zelenskyy called a repeat attack on rescue workers. Estonian investors including Rauno Teder have put $60 million into the centre
  • SSD 2027 gains a Nordic pavilion: NORDSEC and the Finnish Operations Center signed an MoU to run a joint Finnish–Norwegian pavilion at Supply Security & Defence Expo 2027 in Riga on 16–17 June. Exponaut also signed an MoU with the Estonian Force Transformation Command, with Mall Kikas and Madis Laas meeting Commander Ivo Peets
  • Wolfram Europa and Harmattan AI: Estonia’s Wolfram Europa will integrate European-designed effectors into Harmattan AI’s autonomous systems, in a signing witnessed in Tallinn by Defence Minister Hanno Pevkur. CEO Magnus-Valdemar Saar framed it as a fully European capability, from autonomous mission systems to integrated effects
  • SAF Tehnika turns loss into profit: The Latvian radio communication equipment manufacturer reported quarterly revenue of €14.17m, 2.7 times higher than a year ago, and a €2.69m net profit against a €0.75m loss. Full-year revenue rose 97% to €51.46m, with defence a key customer and Latvian production capacity being expanded
  • Latvia considers Super Tucanos: The Latvian Air Force is evaluating Embraer’s A-29 Super Tucano, which Air Force Commander Colonel Viesturs Masulis describes not as a classic aircraft but as air-based air defence against slow-flying targets and drones. The government has allocated more than a billion euros to air defence
  • €40m of Estonian defence products to Ukraine: Estonia has supplied over €50m in military aid this year, more than €40m of it products from Estonian defence industry, reaching at least 0.28 percent of GDP by year end. The 2027 aid package will be announced shortly
  • DALO Industry Days sets records: Scandinavia’s largest defence exhibition, held in Herning on August 19–20, drew a record 1,244 exhibitors from 28 nations and 21,095 participants, up from more than 14,000 last year. All three Baltic states exhibited, with national pavilions and companies from Lithuania, Latvia and Estonia
  • Broswarm joins the ESA incubator: Lithuanian deeptech and defence company Broswarm was accepted into the European Space Agency Business Incubation Centre in Lithuania, where it will push high-precision GNSS positioning beyond what conventional UAV systems deliver — the accuracy that determines how well it can image what lies underground
  • Eastern allies court Washington: NATO’s eastern members are preparing to offer to cover a larger share of the costs of US troops on their territory, to be put to US Deputy Secretary of Defence Elbridge Colby in Brussels on August 27, in an effort to head off a reduction in the US military presence in the region
  • Rail Baltica funding fight: Lithuanian PM Mindaugas Sinkevičius says the Baltic states must fight together for EU funding in the 2028–34 budget through the Connecting Europe Facility. The project’s total cost is now put at €23.8 billion against a 2017 estimate of €5.8 billion, with completion pushed back to 2030

Defence Industry Dimension

The Milrem arson marks the moment the war’s industrial dimension arrived on Estonian soil. Attacks on the chain supplying Ukraine have until now struck factories in the Czech Republic, Lithuania, Bulgaria and Italy; the message Ilmar Raag reads in the Tallinn fire — stop supporting Ukraine or we will attack your facilities — puts every Estonian defence manufacturer on notice that visibility in Ukraine now carries a security cost at home. The rest of the week reads as an answer to it rather than a retreat from it: Wolfram Europa deepening European effector cooperation with Harmattan AI, SAF Tehnika nearly doubling revenue on defence demand, Latvia weighing airborne counter-drone capability, and Baltic companies out in force at a record DALO Industry Days. With NORDSEC and the Finnish Operations Center already planning a joint pavilion in Riga, the regional industrial base is consolidating faster than the pressure against it is mounting.