Market Research Logo

Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

The Peruvian defense budget is set to register a CAGR of 2.53% over the forecast period and reach US$2.6 billion in 2024. In 2019, Peru’s defense budget is US$2.3 billion registering a CAGR of 0.57% during the historic period. Active participation in peacekeeping missions, narco-terrorism, and defense sector reforms, the persistent threat from insurgent guerrilla organization Shining Path, border conflicts with Chile, and modernization initiatives drove defense expenditure over the historic period. The defense budget as a percentage of GDP is expected to decrease to an average of 0.84% in the forecast period, compared to an average of 1.04% during the historic period.

The capital expenditure allocation is expected to decrease to an average of 5.8% during the forecast period which stood at an average of 9.9% during the historic period. Procurements that are expected to account for capital expenditure over the forecast period include frigates, multi-role aircraft, submarines, and main battle tanks (MBTs), TGS-MIL & TGM MIL, and BTR-82 APC among others. Consequently, the remaining budget will be allocated to personnel salaries, development programs for military personnel, and training.

Peruvian homeland security (HLS) expenditure is US$3.1 billion in 2019 and is expected to grow at a CAGR of 4.44% over the forecast period to reach US$4.0 billion in 2024. The budget of homeland security will be driven by police reforms and modernization, as well as the need to curb cocaine trafficking and organized crime.

Between 2014 and 2018, South Korea emerged as the largest supplier of military hardware to Peru, with a share of 33.9% of total defense imports, followed by Russia and Italy with 21.8% and 14.0% respectively. Aircraft accounted for the majority of defense imports with a share of 39.5% during the period 2014-2018. During the period 2014-2018, Peru acquired 32 Piranha APC, 16 MM-40-3 Exocet anti-ship SSM, 175 Spike-ERanti tank missile and C-27J Spartan transport aircraft. Other ongoing contracts include TGS and TGM MIL Rheinmetall MAN Military Vehicles and the modernization of four HDW 209/1200-class submarines.

The report Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024, offers a detailed analysis of the Peruvian defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following -

  • The defense industry market size and drivers: detailed analysis of the Peruvian defense industry during 2020-2024, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns
  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
  • Porter’s Five Force analysis of the Peruvian defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Peruvian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
Companies mentioned: Los Servicios Industriales de la Marina (SIMA), The Army Ammunition Factory (FAME), Desarrollos Industriales Casanave.

Scope
  • In 2019, Peru’s defense budget is US$2.3 billion registering a CAGR of 0.57% during the historic period. Active participation in peacekeeping missions, narco-terrorism, and defense sector reforms, the persistent threat from insurgent guerrilla organization Shining Path, border conflicts with Chile, and modernization initiatives drove defense expenditure over the historic period.
  • The country’s defense expenditure is anticipated to value US$2.6 billion in 2024 and register a CAGR of 2.53% over the forecast period. The defense budget as a percentage of GDP is expected to decrease to an average of 0.84% in the forecast period, compared to an average of 1.04% during the historic period.
Reasons to buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Peruvian defense industry market trends for the coming five years
  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Peruvian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.


  • Introduction
    • What is this Report About?
    • Definitions
    • Summary Methodology
    • About GlobalData
  • Executive Summary
    • Table Figure 1: Peruvian Defense Budget: 2020 and 2024
    • Table Figure 2: Peruvian Defense Imports: 2014 and 2018
  • Market Attractiveness and Emerging Opportunities
    • Table Figure 3: Peruvian Top Prospective Procurements/Developments
    • Current Market Scenario
      • Primary Threat Perception
        • Table Figure 4: Peruvian National Security Threats
      • Military Doctrine and Strategy
      • Procurement Programs
        • Table Peruvian – Ongoing Development and Procurement Programs (US$ Million), 2014–2019
        • Table Peruvian – Future Procurement Programs
        • Table Peruvian– Top Five Defense Procurement Programs by Value (US$ Million), 2019–2024
      • Geopolitical, social, and economic scenario
      • Political and Strategic Alliances
        • Table Figure 5: Peruvian Partnering Countries for Defense Cooperation and Military Training
    • Defense Market Size Historical and Forecast
      • Defense expenditure to grow at a CAGR of 2.53% over the forecast period
        • Table Peruvian Defense Expenditure (PEN Billion and US$ Billion), 2015–2024
        • Table Figure 6: Peruvian Defense Expenditure (PEN Billion), 2015–2024
        • Table Figure 7: Peruvian Defense Expenditure (US$ Billion), 2015–2024
      • Threat of narco-terrorism, defense reforms and modernization, border disputes, and peacekeeping operations to drive defense expenditure
      • Defense budget as a percentage of GDP is anticipated to average 0.8% during the forecast period
        • Table Peruvian GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015–2024
        • Table Figure 8: Peruvian GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015–2024
    • Analysis of Defense Budget Allocation
      • Revenue expenditure accounts for the majority of the Peruvian defense budget
        • Table Peruvian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015–2024
        • Table Figure 9: Peruvian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015–2024
      • Peruvian defense capital expenditure is expected to grow at a CAGR of 3.14% during the forecast period
        • Table Peruvian Defense Capital Expenditure (PEN Million and US$ Million), 2015–2024
        • Table Figure 10: Peruvian Capital Budget Allocation (PEN Million), 2015–2024
        • Table Figure 11: Peruvian Capital Budget Allocation (US$ Million), 2015–2024
      • Per capita defense expenditure expected to increase during the forecast period
        • Table Peruvian Per Capita Defense Expenditure (US$), 2015–2024
        • Table Figure 12: Peruvian Per Capita Defense Expenditure (US$), 2015–2024
    • Homeland Security Market Size and Forecast
      • Homeland security expenditure is expected to grow at a CAGR of 4.44% during the forecast period
        • Table Peruvian Homeland Security Expenditure (PEN Billion and US$ billion), 2015–2024
        • Table Figure 13: Peruvian Homeland Security Budget (PEN Billion), 2015–2024
        • Table Figure 14: Peruvian Homeland Security Budget (US$ Billion), 2015–2024
      • Measures to prevent cocaine trafficking and organized crime to drive HLS expenditure
    • Benchmarking with Key Global Markets
      • Peruvian defense budget expected to register marginal growth over the forecast period
        • Table Benchmarking with Key Markets – 2015–2019 vs. 2020–2024
        • Table Figure 15: Benchmarking with Key Markets – 2015–2019 vs. 2020–2024
      • Peru's military expenditure is limited compared to countries with the largest defense expenditure
        • Table Figure 16: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2019 and 2024
      • Peru allocates a low percentage of GDP to defense
        • Table Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
    • Market Opportunities: Key Trends and Growth Stimulators
      • Top 10 Defense Sectors by Value (US$ Million) –Projections over 2019–2024
        • Table Top Peru Defense Sectors by Value (US$ Million), 2019–2024
      • Critical Infrastructure Protection (CIP)-Physical Security
        • Table Figure 18: Physical Security-Critical Infrastructure Protection Market Size (US$ Million), 2019–2024
      • Military Transport Aircraft
        • Table Figure 19: Military Transport Aircraft Market Size (US$ Million), 2019–2024
      • Frigates
        • Table Figure 20: Frigates Market Size (US$ Million), 2019–2024
  • Defense Procurement Market Dynamics
    • Import Market Dynamics
      • Defense imports expected to increase during the forecast period
        • Table Figure 21: Peruvian Defense Import Trend, 2014–2018 (TIV values)
      • South Korea to account for the majority of Peru's defense imports during the forecast period
        • Table Figure 22: Peruvian Defense Imports by Country (%), 2014–2018
      • Aircraft and naval vessels are the most imported military hardware
        • Table Figure 23: Peruvian Defense Imports by Category (%), 2014–2018
  • Industry Dynamics
    • Five Forces Analysis
      • Table Figure 24: Industry Dynamics – Porter's Five Forces Analysis
      • Bargaining Power of Supplier: Low to Medium
      • Bargaining Power of Buyer: Medium to High
      • Barriers to Entry: Medium
      • Intensity of Rivalry: Medium to High
      • Threat of Substitution: Medium to High
  • Market Entry Strategy
    • Market Regulation
      • Budgeting process
        • Table Figure 25: Peruvian Budgeting Process
      • Procurement Policy and Process
      • Offset policy aids development of domestic defense industry
        • Table Defense Offset Regulations in Peru
      • Peru allows 100% FDI in the defense industry
    • Market Entry Route
      • The country's biennial defense exhibition provides an attractive entry route
      • Direct selling is the preferred market entry route for foreign OEMs
    • Key Challenges
      • Small defense budget and infrastructure challenge limits the market entry of foreign companies
      • Lack of transparency hampers the growth of the Peruvian defense industry
  • Competitive Landscape and Strategic Insights
    • Competitive Landscape Overview
      • Table Competitive Landscape of the Peruvian Defense Industry
    • Peruvian Market Share Analysis, 2019–2024
      • Table Figure 26: Peruvian Market Share Analysis, 2019–2024
      • Table Top Defense Suppliers in Peruvian Defense Industry By Value (US$ Million), 2019–2024
    • Key Domestic Companies
      • Los Servicios Industriales de la Marina (SIMA): Overview
      • Los Servicios Industriales de la Marina (SIMA): Products and Services
        • Table Los Servicios Industriales de la Marina (SIMA) –Products and Services
      • Los Servicios Industriales de la Marina (SIMA): Recent Announcements and Strategic Initiatives
      • Los Servicios Industriales de la Marina (SIMA): Alliances
        • Table Los Servicios Industriales de la Marina (SIMA) –Alliances
      • Los Servicios Industriales de la Marina (SIMA): Recent Contract Wins
        • Table Los Servicios Industriales de la Marina (SIMA) –Recent Contract Wins
      • The Army Ammunition Factory (FAME): Overview
      • The Army Ammunition Factory (FAME): Products and Services
        • Table The Army Ammunition Factory (FAME) –Product Focus
      • The Army Ammunition Factory (FAME): Recent Announcements and Strategic Initiatives
      • Desarrollos Industriales Casanave: Overview
      • Desarrollos Industriales Casanave: Products and Services
        • Table Desarrollos Industriales Casanave – Product Focus
      • Desarrollos Industriales Casanave: Recent Announcements and Strategic Initiatives
      • Desarrollos Industriales Casanave: Alliances
        • Table Desarrollos Industriales Casanave – Alliances
  • Business Environment and Country Risk
    • Economic Performance
      • GDP Per Capita (US$)
        • Table Figure 27: Peruvian GDP Per Capita (US$), 2015–2025
      • GDP, Current Prices (US$ Billion)
        • Table Figure 28: Peruvian GDP at Current Prices (US$ Billion), 2015–2025
      • Exports of Goods and Services, Current Prices (LCU billion)
        • Table Figure 29: Peruvian Exports of Goods and Services, Current Prices (LCU Billion), 2005–2014
      • Imports of Goods and Services, Current Prices (LCU billion)
        • Table Figure 30: Peruvian Imports of Goods and Services, Current Prices (LCU Billion), 2005–2014
      • Gross National Disposable Income (US$ billion)
        • Table Figure 31: Peruvian Gross National Disposable Income (US$ billion) 2007–2014
      • Local Currency Unit per US$ (Period Average)
        • Table Figure 32: Local Currency Unit per US$, 2015–2024
      • Market Capitalization of Listed Companies (US$ Billion)
        • Table Figure 33: Market Capitalization of Listed Companies in Peru (US$ Billion), 2005–2012
      • Market Capitalization of Listed Companies (% of GDP)
        • Table Figure 34: Market Capitalization of Listed Companies in Peru (% of GDP), 2005–2012
      • Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
        • Table Figure 35: Peruvian Government Cash Surplus/Deficit as a % of GDP (LCU), 2005–2012
      • Goods Exports as a Percentage of GDP
        • Table Figure 36: Peruvian Goods Exports as a % of GDP, 2005–2013
      • Goods Imports as a Percentage of GDP
        • Table Figure 37: Peruvian Goods Imports as a % of GDP, 2005–2013
      • Services Imports as a Percentage of GDP
        • Table Figure 38: Peruvian Services Imports as a % of GDP, 2005–2013
      • Services Exports as a Percentage of GDP
        • Table Figure 39: Peruvian Services Exports as a % of GDP, 2005–2013
      • Foreign Direct Investment, Net (BoP, Current US$ Billion)
        • Table Figure 40: Peruvian Foreign Direct Investment, Net (BoP, Current US$ Billion), 2005–2013
      • Net Foreign Direct Investment as a Percentage of GDP
        • Table Figure 41: Peruvian Net Foreign Direct Investment as a % of GDP, 2005–2013
      • Mining, Manufacturing, Utilities Output LCU Billion
        • Table Figure 42: Mining, Manufacturing, Utilities Output (LCU Billion), 2005–2014
  • Appendix
    • Disclaimer

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report