Indonesian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Indonesian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

Indonesian defense expenditure is forecast to value US$8.2 billion in 2020 and is expected to grow at a CAGR of 3.39% during the forecast period to value US$9.4 billion in 2024. Over the next few years, Indonesia wants to be recognized as a major regional military power. The economy has been growing at an average rate of 5.51% historically, and this has fueled growth in the defense expenditure.

The Indonesian MoD is expected to increase its capital expenditure from US$2.3 billion in 2019 to US$3.1 billion in 2024 in an effort to modernize its armed forces and support existing projects. Various procurements, which have led to the increase in capital budget allocation, include NASAMS ground based air defense system, Bell 412EPI, Airbus H225M helicopters, TPE331 turboprop engines, Type 209 submarines, Sukhoi Su-30MK2s aircraft, Su-27 SKM, and Su-35 “Flanker” fighters, AS565 Panther anti-submarine warfare (ASW) helicopters, Chang Bogo-class conventional submarines, two landing ship tanks (LSTs), AH-64 Apache Longbow gunship helicopters, and German Leopard tanks.

Over the forecast period, the country is expected to invest in infrastructure construction, multi-role aircraft, naval vessels such as submarines and frigates, cyber security, border security, unmanned aerial vehicles, radar systems, and computer network defense capabilities, which will drive the growth in its expenditure.

With a population of over 265 million and 17,000 islands to protect, homeland security has gained prominence in Indonesia over the last decade with expenditure expected to increase from US$7.7 billion in 2019 to US$9.4 billion in 2024 at a CAGR of 3.39%. Increasing defense expenditure will support the Indonesian government's commitment to address the increasing threat of terrorism, and to manage piracy and illegal fishing, illegal immigration, etc.

Indonesia has often been regarded as one of the most attractive defense markets in Southeast Asia as it deals with terrorism, illegal fishing, piracy, drug smuggling and other crimes. The country is one of the fastest-growing defense markets in South Asia and has historically relied on foreign OEMs (original equipment manufacturers) to strengthen its defense capabilities. The country imports its tanks from Germany and frigates, corvettes, submarines etc. from the Netherlands, the UK, and Germany. Indonesia imports all of its fighter aircraft including F-16 and F-5 fighter jets from the US and Sukhoi jets from Russia.

The report Indonesian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024, offers detailed analysis of the Indonesian 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.

Companies mentioned: PT Dirgantara Indonesia, PAL Indonesia, PT Pindad, Dok & Perkapalan, PT Dahana, PT Multiintegra, PT SOG Indonesia

Scope

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

  • The Indonesian defense industry market size and drivers: detailed analysis of the Indonesian 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.
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years.
  • Market opportunities:list of the top ten defense investment opportunities over the next 5 years.
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Indonesian defense industry.
Reasons to buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Indonesian 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 Indonesian defense industry covering sections including demand drivers, key trends and latest industry contracts.


  • Introduction
    • What is this Report About?
    • Definitions
    • Summary Methodology
    • About GlobalData
  • Executive Summary
    • Table Figure 1: Indonesia Defense Budget: 2020 and 2024
    • Table Figure 2: Indonesian Defense Imports/Exports: 2014 and 2018
  • Market Attractiveness and Emerging Opportunities
    • Table Figure 3: Indonesia's Top Three Prospective Procurements/Developments
    • Current Market Scenario
      • Primary threat perception
        • Table Figure 4: Indonesian National Security Threats
      • Military Doctrine & Strategy
      • Procurement Programs
        • Table Indonesian Ongoing Procurement Programs
        • Table Indonesian Future Procurement Programs
      • Top Procurement Programs by Value (US$ Million) 2019-2024
        • Table Indonesia - Top Defense Procurement Programs by Value (US$ Million), 2019-2024
      • Geopolitical, Social and Economic Scenario
      • Political & Strategic Alliances
        • Table Figure 5: Indonesia's Partnering Countries for Defense Cooperation and Military Training
    • Defense Market Size Historical and Forecast
      • Indonesian defense budget is expected to reach US$11.1 billion by 2024, at a CAGR of 6.52%
        • Table Indonesia - Defense Expenditure (IDR Trillion and US$ Billion), 2015-2024
        • Table Figure 6: Indonesian Defense Expenditure (IDR Trillion), 2015-2024
        • Table Figure 7: Indonesian Defense Expenditure (US$ Billion), 2015-2024
      • Defense expenditure is driven by the modernization of the armed forces, indigenization, territorial disputes, and natural disasters
      • Defense budget as a percentage of GDP expected to increase over the forecast period
        • Table Indonesia - GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
        • Table Figure 8: Indonesian GDP Growth vs. Defense Expenditure as Percentage of GDP, 2015-2024
    • Analysis of Defense Budget Allocation
      • Capital expenditure share of defense budget is expected to increase to an average of 34.5% over the forecast period
        • Table Indonesian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
        • Table Figure 9: Indonesian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
      • Capital expenditure to increase over the forecast period
        • Table Indonesian - Defense Capital Expenditure (IDR Trillion and US$ Billion), 2015-2024
        • Table Figure 10: Indonesia - Defense Capital Expenditure (IDR Trillion), 2015-2024
        • Table Figure 11: Indonesia - Defense Capital Expenditure (US$ Billion), 2015-2024
      • Per capita defense expenditure expected to increase during the forecast period
        • Table Indonesian Per Capita Defense Expenditure (US$), 2015-2024
        • Table Figure 12: Indonesian Per Capita Defense Expenditure (US$), 2015-2024
    • Homeland Security Market Size and Forecast
      • Homeland security expenditure is expected to grow at a CAGR of 7.97% during the forecast period
        • Table Indonesia - Homeland Security Expenditure (IDR Trillion and US$ Billion), 2015-2024
        • Table Figure 13: Indonesian Homeland Security Budget (IDR Trillion), 2015-2024
        • Table Figure 14: Indonesian Homeland Security Budget (US$ billion), 2015-2024
      • Border security and terrorism will drive the homeland security market over the forecast period
    • Benchmarking with Key Global Markets
      • Indonesia's defense budget expected to register rapid 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
      • Indonesian defense expenditure is relatively small compared to other Asian countries
        • Table Figure 16: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2019 and 2024
      • The Indonesian defense budget as a percentage of GDP is expected to slightly decrease during 2020-2024
        • Table Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
    • Market Opportunities: Key Trends and Growth Stimulators
      • Top Defense Sectors by Value (US$ Million) - Projection over 2019-2024
        • Table Top Indonesian Defense Sectors by Value (US$ Million), 2019-2024
      • Physical Security
        • Table Figure 18: Physical Security Market (US$ Million), 2019-2024
      • C4SIR-Land Based
        • Table Figure 19: C4ISR-Land Based Security Market Size (US$ Million), 2019-2024
      • Maritime and Border Security - Maritime Surveillance and Detection
        • Table Figure 20: Maritime Surveillance and Detection Market Size (US$ Million), 2019-2024
  • Defense Procurement Market Dynamics
    • Table Figure 21: Top Indonesia Defense Procurements in Terms of Supplier Relationships
    • Import Market Dynamics
      • Defense imports expected to increase during forecast period
        • Table Figure 22: Indonesian Defense imports TIV Value (US$ Million), 2014-2018
      • Indonesia plans to diversify arms imports
        • Table Figure 23: Indonesian Defense Imports by Region (%), 2014-2018
      • Aircraft and ships constitute the majority of Indonesian defense imports
        • Table Figure 24: Indonesian Defense Imports by Category (%), 2014-2018
    • Export Market Dynamics
      • Indonesia does not possess significant defense export capability
  • Industry Dynamics
    • Five Forces Analysis
      • Table Figure 25: Industry Dynamics - Porter's Five Forces Analysis
      • Bargaining power of supplier: Low
      • Bargaining power of Buyer: Medium
      • Barrier to entry: Medium
      • Intensity of rivalry: Low
      • Threat of Substitution: High
  • Market Entry Strategy
    • Market Regulation
      • Defense investment policy conducive to both domestic and foreign investment
        • Table Offset Regulations in Indonesia
      • New procurement policy to support small and medium enterprises
      • Indonesia to launch formal offset policy
    • Market Entry Route
      • Budget Process
        • Table Indonesia Budgeting Process (Sample Graphical Representation)
      • Procurement Policy & Process
      • Foreign defense suppliers enter the Indonesian defense market primarily through joint ventures
      • Strategic partnerships and military collaborations an easier way to access the Indonesian defense market
    • Key Challenges
      • Table Figure 26: Key Challenges in the Indonesian Defense Market
      • US Sanctions affecting the market
      • Limited budget for capex deters investment
      • Lack of defense infrastructure
      • Corruption impedes the growth of the Indonesian defense industry
  • Competitive Landscape and Strategic Insights
    • Competitive landscape Overview
      • Table Top Defense Suppliers in Indonesian Defense Industry - By Value (US$ Million) 2019- 2024
      • Indonesia Market Share Analysis
        • Table Figure 27: Indonesia Market Share Analysis, 2018
        • Table Competitive Landscape of the Indonesian Defense Industry
    • Key Public Sector Companies
      • PT Dirgantara Indonesia: overview
      • PT Dirgantara Indonesia: major products and services
        • Table PT Dirgantara Indonesia-Major Products & Services
      • PT Dirgantara Indonesia: recent announcements and strategic initiatives
      • PT Dirgantara Indonesia: alliances
        • Table PT Dirgantara Indonesia - Alliances
      • PT Dirgantara Indonesia: recent contract wins
        • Table PT Dirgantara Indonesia - Recent Contract Wins
      • PAL Indonesia: overview
      • PAL Indonesia: major products
        • Table PAL Indonesia - Major Products
      • PAL Indonesia: recent announcements and strategic initiatives
      • PAL Indonesia: Alliances
        • Table PAL Indonesia - Alliances
      • PAL Indonesia: Recent Contract Wins
        • Table PAL Indonesia - Recent Contract Wins
      • PT Pindad: overview
      • Major Products
        • Table PT Pindad - Major Products
      • PT Pindad: recent announcements and strategic initiatives
      • PT Pindad: alliances
        • Table PT Pindad - Alliances
      • PT Pindad: Recent Contract Wins
        • Table PT Pindad - Recent Contract Wins
      • Dok & Perkapalan: Overview
      • Dok & Perkapalan: Major Products
        • Table Dok & Perkapalan - Major Products
      • Dok & Perkapalan: recent announcements and strategic initiatives
      • Dok & Perkapalan: alliances
        • Table Dok & Perkapalan - Alliances
      • Dok & Perkapalan: Recent Contract Wins
        • Table Dok & Perkapalan - Recent Contract Wins
    • Key Private Sector Companies
      • PT Dahana: overview
      • PT Dahana: products
        • Table PT Dahana - Major Products
      • PT Dahana: recent announcements and strategic initiatives
      • PT Dahana: alliances
        • Table PT Dahana - Alliances
      • PT Dahana: recent contract wins
        • Table PT Dahana - Recent Contract Wins
      • PT Multiintegra: overview
      • PT Multiintegra: products
        • Table PT Multiintegra - Major Products
      • PT Multiintegra: recent announcements and strategic initiatives
      • PT Multiintegra: Recent Contract Wins
        • Table PT Multiintegra - Recent Contract Wins
      • Radar and Communications Systems: overview
      • Radar and Communications Systems: products
        • Table Radar and Communications Systems - Major Products
      • Radar and Communications Systems: recent announcements and strategic initiatives
      • Radar and Communications Systems: alliances
        • Table Radar and Communications Systems - Alliances
      • PT SOG Indonesia: overview
      • PT SOG Indonesia: products and services
        • Table PT SOG Indonesia - Major Products & Services
      • PT SOG Indonesia: recent announcements and strategic initiatives
      • PT SOG Indonesia: alliances
        • Table PT SOG Indonesia - Alliances
  • Business Environment and Country Risk
    • Economic Performance
      • GDP Per Capita
        • Table Figure 28: Indonesian GDP Per Capita, 2015-2025
      • GDP, Current Prices
        • Table Figure 29: Indonesian GDP, Current Prices (US$ Billions), 2015-2025
      • Exports of Goods and Services, Current Prices
        • Table Figure 30: Indonesian Exports of Goods and Services, Current Prices (LCU Trillion), 2005-2014
      • Imports of Goods and Services, Current Prices
        • Table Figure 31: Indonesian Imports of Goods and Services, Current Prices (LCU Trillion), 2005-2014
      • Gross National Disposable Income (US$ Bn)
        • Table Figure 32: Indonesian Gross National Disposable Income (US$ Billion), 2005-2012
      • Local Currency Unit per US Dollar
        • Table Figure 33: Local Currency Unit per US$ - Exchange Rate, 2015-2024
      • Market Capitalization of Listed Companies
        • Table Figure 34: Indonesian Market Capitalization of Listed Companies (US$ Billion), 2005-2012
      • Market Capitalization of Listed Companies (% of GDP)
        • Table Figure 35: Indonesian Market Capitalization of Listed Companies (% of GDP), 2005-2012
      • Government Cash Surplus/Deficit as % of GDP
        • Table Figure 36: Indonesian Government Cash Surplus/Deficit as % of GDP, 2005-2009
      • Goods Exports as % of GDP
        • Table Figure 37: Indonesia's Goods Exports as % of GDP, 2005-2014
      • Goods Imports as % of GDP
        • Table Figure 38: Indonesia's Goods Imports as % of GDP, 2005-2014
      • Service Imports as % of GDP
        • Table Figure 39: Indonesia's Service Imports as % of GDP, 2005-2014
      • Service Exports as % of GDP
        • Table Figure 40: Indonesia's Service Exports as % of GDP, 2005-2014
      • Foreign Direct Investment (US$ Billion)
        • Table Figure 41: Indonesian Foreign Direct Investment (US$ Billion), 2005-2014
      • Net Foreign Direct Investment as % of GDP
        • Table Figure 42: Indonesian Net Foreign Direct Investment as % of GDP, 2005-2014
      • Mining, Manufacturing, Utilities Output (LCU Tn)
        • Table Figure 43: Indonesian Mining, Manufacturing, Utilities Output (LCU Tn), 2005-2014
  • Appendix
    • About GlobalData
    • 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