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Malaysia Defence and Security Report 2016

Malaysia Defence and Security Report 2016

BMI View: Demand for military equipment is strong in Malaysia. The country faces threats from Islamistextremist groups, militants in southern Philippines, organised crime, piracy, and regional tensions overmaritime disputes. Meanwhile, many of its neighbours are investing heavily in raising their own defencecapabilities. Much of the armed forces' equipment is outdated and needs to be replaced, although spendingis limited by budget constraints amid the government's fiscal consolidation efforts. This will mean that someprocurement programmes will need to be postponed or cancelled, however, the current size of the budgetdoes allow the defence ministry to carry on with acquisitions of equipment deemed critical for strengtheningnaval, air and counterterrorism capabilities. Such equipment will need to be sourced from abroad, due tolocal companies' lack of advanced technological capabilities across these segments.

Latest Developments

In March 2016, it was reported that the local Boustead Naval Shipyard (BNS) had laid down the keelfor the first of the Malaysian navy's six Second Generation Patrol Vessel/Littoral Combat Ships orderedunder a USD2.2bn contract in 2014.

Prime Minister Razak confirmed that procurement programmes deemed vital to the strengthening ofMalaysian air power and naval capabilities will be maintained, despite a decline in the overall defencebudget. These specifically include: the six Second Generation Patrol Vessel/Littoral Combat Ships fromBNS; four Airbus 1400M Atlas transport aircraft; 257 Deftech AV8 Gempita armoured vehicles; and therecently ordered Starstreak ground-based air-defence missile system from Thales.

In February 2016, media reported that Malaysia would purchase another 20 M134D Miniguns fromDillon Aero for its Deftech AV4 vehicles on order from Thailand-based Chaiseri.

Also in February, the US' MD Helicopters announced it would supply the Malaysian army air corps withsix of its MD 530G light scout attack helicopters equipped with a 'custom weapons package'communications systems and electro-optic systems. The order makes Malaysia the launch customer forthe product.


BMI Industry View
Table: Headline Defence Expenditure Forecasts (Malaysia 2015-2020)
SWOT
Defence Industry SWOT
Industry Forecast
Defence Expenditure
Table: Defence Expenditure (Malaysia 2014-2019)
Table: Defence Expenditure (Malaysia 2020-2025)
Defence Trade
Imports
Exports
Industry Risk Reward Index
Defence Industry Risk Reward Index
Table: Asia Pacific - Defence Industry Risk Reward Index
Rewards
Risks
Market Overview
Defence Market Overview
Domestic Defence Sector
Domestic Defence Market
Armed Forces Overview
Armed Forces
Table: Armed Forces Personnel (Malaysia 2008-2013)
Table: Malaysian Armed Forces - International Deployments
Security Overview
Domestic Threats
Regional Threats
International Threats
Company Profile
Airbus Group
AIROD
Composite Technology Research Malaysia (CTRM)
Deftech
Malaysia Marine And Heavy Engineering (MMHE)
SME Ordnance
Methodology
Risk/Reward Index Methodology
Sector-Specific Methodology
Table: Defence Risk/Reward Index Indicators
Weighting
Table: Weighting of Defence Risk Reward Index

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