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 Much of the armed forces' equipment is outdated and needs to be replaced, although spendingis limited by budget constraints amid the government's fiscal consolidation efforts.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.
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.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook