South African Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

South African Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

South African Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

The South African defense budget is anticipated to value US$4.3 billion by 2024, growing at a CAGR of 3.10%. South Africa’s military expenditure stands at US$3.6 billion in 2019 and is anticipated to grow from US$3.8 billion in 2020 to value US$4.3 billion in 2024, registering a CAGR of 3.10% over the forecast period. The growth will primarily be fueled by the country’s active participation in peacekeeping operations governed by the UN (United Nations), African Union, and the Southern African Development Community (SADC).During 2015-2019, the capital expenditure allocation averaged 28.9% and is anticipated to marginally increase to an average of 29.6% over the forecast period. Consequently, over the forecast period, revenue expenditure is also expected to remain nearly the same at an average of 70.4%. During 2015-2019, the defense budget as a percentage of GDP is expected to decrease marginally from an average of 1.03% to 0.91% over 2020-2024. The country’s per capita defense expenditure is expected to increase from US$64 in 2020 to US$67.9 in 2024.South African homeland security expenditure is expected to value US$7.4 billion in 2020 and is anticipated to grow at a CAGR of 4.50% to reach US$8.8 billion in 2024. This expenditure is primarily driven by South Africa’s focus on enhancing its defense capabilities to counter high violent crime rates and rising threats of global terrorism. The HLS budget is anticipated to be invested into the procurement of surveillance equipment such as CCTV and biometric identification systems.South African defense imports declined drastically from 2014 to 2015, and there were no imports from 2016 to 2018. The country sourced the majority of its defense equipment from Russia, which accounted for 96.2% of total imports during 2014-2018. The other major country from which South Africa imported military equipment during that period is the UK. During 2014-2018, the South African defense export market increased significantly, with the market reaching its highest value in 2018. The US was the largest importer of South African defense goods, accounting for 21.2% of total defense exports, whilst the UAE and India accounted for the country’s second and third largest shares with 20.5% and 9.7%, respectively.The report “South African Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024” offers detailed analysis of the South African 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 South African 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 South African 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 South African 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: Denel, Ansys Limited, Reutech, Saab Grintek, IVEMA, Aerosud, Global Armour, Milkor, Paramount Advanced Technologies, Tellumat Defense

    Scope
    • South Africa’s military expenditure stands at US$3.6 billion in 2019 and is anticipated to grow from US$3.8 billion in 2020 to value US$4.3 billion in 2024, registering a CAGR of 3.10% over the forecast period.
    • The growth will primarily be fueled by the country’s active participation in peacekeeping operations governed by the UN (United Nations), African Union, and the Southern African Development Community (SADC). As a result of these missions, the government will seek higher expenditure for the defense sector.
    • The country also seeks to replace its aging military equipment and improve border security and surveillance, which are expected to help drive defense expenditure over the forecast period.
    Reasons to buy
    • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the South African 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 The South African 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: South African Defense Budget: 2020 and 2024
      • Table Figure 2: South African Defense Imports/Exports: 2014 and 2018
    • Market Attractiveness and Emerging Opportunities
      • Table Figure 3: South Africa's Top Prospective Procurements/Developments
      • Current Market Scenario
        • Primary Threat Perception
          • Table Figure 4: South African National Security Threats
        • Military Doctrine and Strategy
        • Procurement Programs
          • Table South Africa – Ongoing Development and Procurement Programs
          • Table South Africa – Future Procurement Programs
        • Top Procurement Programs by Value (US$ Million), 2019–2024
          • Table South Africa – Defense Procurement Programs by Value (US$ Million), 2019–2024
        • Social, Political and Economic Environment and Support for Defense Projects
        • Political and Strategic Alliances
          • Table Figure 5: South Africa Partnering Countries for Defense Cooperation and Military Training
      • Defense Market Size Historical and Forecast
        • South African defense expenditure expected to grow at a CAGR of 3.10% over the forecast period
          • Table South African Defense Expenditure (ZAR Billion and US$ Billion), 2015–2024
          • Table Figure 6: South African Defense Expenditure (ZAR Billion), 2015–2024
          • Table Figure 7: South African Defense Expenditure (US$ Billion), 2015–2024
        • Modernization initiatives, peacekeeping missions, and border security to drive defense expenditure
        • Military expenditure as a percentage of GDP is anticipated to increase over the forecast period
          • Table South African GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015– 2024
          • Table Figure 8: South African GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015– 2024
      • Analysis of Defense Budget Allocation
        • Capital expenditure share to remain constant over the forecast period
          • Table South African Defense Budget Split Between Capital and Revenue Expenditure (%), 2015–2024
          • Table Figure 9: South African Defense Budget Split Between Capital and Revenue Expenditure (%), 2015–2024
        • Capital expenditure anticipated to increase at a CAGR of 4.10% over the forecast period
          • Table South African Defense Capital Expenditure (ZAR Billion & US$ Billion), 2015–2024
          • Table Figure 10: South African Defense Capital Expenditure (ZAR Billion), 2015–2024
          • Table Figure 11: South African Defense Capital Expenditure (US$ Billion), 2015–2024
        • Others segment accounted for the largest percentage share of the overall defense budget
          • Table South African Defense Budget Share (%) Split by Services (Army, Air Force, Navy and Other), 2015–2024
          • Table Figure 12: South Africa – Defense Expenditure Allocation (%), 2015–2024
        • Army expenditure to grow at a modest pace over the forecast period
          • Table South African Defense Budget Allocations in ZAR Billion – Breakdown by Services (Army, Air Force, Navy and Others), 2015–2024
          • Table Figure 13: South African Defense Expenditure in ZAR Billion – Breakdown by Services (Army, Air Force, Navy and Others) 2015–2024
          • Table South African Defense Budget Allocations in US$ Billion – Breakdown by Services (Army, Air Force, Navy and Others), 2015–2024
          • Table Figure 14: South African Defense Budget in US$ Billion – Breakdown by Services (Army, Air Force, Navy and Others), 2015–2024
        • Per-capita defense expenditure expected to increase over the forecast period
          • Table South African Per-Capita Defense Expenditure (US$), 2015–2024
          • Table Figure 15: South African Per-Capita Defense Expenditure (US$), 2015–2024
      • Homeland Security Market Size and Forecast
        • Homeland security expenditure to grow at a CAGR of 4.50% over the forecast period
          • Table South African Homeland Security Expenditure (ZAR Billion & US$ Billion), 2015–2024
          • Table Figure 16: South African Homeland Security Budget (ZAR Billion), 2015–2024
          • Table Figure 17: South African Homeland Security Budget (US$ Billion), 2015–2024
        • Homeland security expenditure to be driven by the rising threat of global terrorism and high violent crime rates
      • Benchmarking with Key Global Markets
        • South African defense expenditure expected to remain low compared to leading spenders
          • Table Benchmarking with Key Markets – 2015–2019 vs 2020–2024
          • Table Figure 18: Benchmarking with Key Markets – 2015–2019 vs 2020–2024
        • The country will continue to be a small player in the global defense market
          • Table Figure 19: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2019 and 2024
        • South African defense expenditure as a percentage of GDP is lower than the majority of leading defense spenders
          • Table Figure 20: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
      • Market Opportunities: Key Trends and Growth Stimulators
        • Top 10 Defense Market Categories by Value (US$ Million) – 2019–2024
          • Table South Africa – 10 Leading Defense Market Categories by Value (US$ Million), 2019– 2024
        • Airborne C4ISR
          • Table Figure 21: Airborne C4ISR Market Size (US$ Million), 2019–2024
        • Physical Security
          • Table Figure 22: Physical Security Market Size (US$ Million), 2019–2024
        • Infantry Fighting Vehicles
          • Table Figure 23: Infantry Fighting Vehicles: Market Size (US$ Million), 2019–2024
    • Defense Procurement Market Dynamics
      • Table Figure 24: South Africa – Defense Procurements in Terms of Supplier Relationships, 2019
      • Import Market Dynamics
        • Defense imports expected to remain constant over the forecast period
          • Table Figure 25: South African Defense Imports Trend (TIV Values), 2014–2018
        • Russia dominated South Africa's defense imports
          • Table Figure 26: South African Defense Imports by Country (%), 2014–2018
        • Satellites were the main defense import
          • Table Figure 27: South African Defense Imports by Category (%), 2014–2018
      • Export Market Dynamics
        • Defense export value increased significantly during 2014–2018
          • Table Figure 28: South Africa Defense Exports Trend (TIV Values), 2014–2018
        • The US accounted for the largest share of South African defense exports
          • Table Figure 29: South African Defense Exports by Country (%), 2014–2018
        • Armored vehicles accounted for the majority of the country's defense exports
          • Table Figure 30: South African's Defense Exports by Category (%), 2014–2018
    • Industry Dynamics
      • Five Forces Analysis
        • Table Figure 31: Industry Dynamics – Porter's Five Forces Analysis
        • Bargaining Power of Supplier: Low
        • Bargaining Power of Buyer: Medium
        • Barrier to Entry: Medium
        • Intensity of Rivalry: High
        • Threat of Substitution: Medium
    • Market Entry Strategy
      • Market Regulation
        • Offset policy ensures support for local companies
          • Table Methodology for Offset Credits
        • FDI is channeled into benefitting local business
      • Market Entry Route
        • Budgeting Process
          • Table Figure 32: The South African Budgeting Process
        • Procurement policy and process
        • Foreign OEMs find alternative routes into the market
        • Joint ventures and collaborations provide market entry opportunities
      • Key Challenges
        • Table Figure 33: Key Challenges in the South African Defense Market
        • Corruption and lack of transparency pose an obstacle for market entry
        • Lack of relevant defense policy
        • Lack of transparency
    • Competitive Landscape and Strategic Insights
      • Competitive Landscape Overview
        • Table Competitive Landscape of the South African Defense Industry
        • South African Market Share Analysis, 2018
          • Table Figure 34: South African Market Share Analysis, 2018
          • Table South Africa – Top Defense Suppliers by Value (US$ Million), 2019–2024
      • Key Public Sector Companies
        • Denel: Overview
        • Denel: Products and Services
          • Table Denel – Products and Services
        • Denel: Recent Announcements and Strategic Initiatives
        • Denel: Alliances
          • Table Denel – Alliances
        • Denel: Recent Contract Wins
          • Table Denel – Recent Contract Wins
        • Ansys Limited: Overview
        • Ansys Limited: Products
          • Table Ansys Limited – Products
        • Ansys Limited: Alliances
          • Table Ansys Limited – Alliances
        • Ansys Limited: Recent Contract Wins
          • Table Ansys Limited – Recent Contract Wins
        • Ansys Limited: Financial Analysis
          • Table Figure 35: Ansys – Revenue Trend Analysis (2014–2018)
          • Table Figure 36: Ansys – Operating Income Trend Analysis (2014–2018)
          • Table Figure 37: Ansys – Net Income Trend Analysis (2014–2018)
      • Key Private Sector Companies
        • Reutech: Overview
        • Reutech: Products and Services
          • Table Reutech – Products and Services
        • Reutech: Recent Announcements and Strategic Initiatives
        • Reutech: Alliances
          • Table Reutech – Alliances
        • Reutech: Recent Contract wins
          • Table Reutech – Recent Contract Wins
        • Saab Grintek: Overview
        • Saab Grintek: Products and Services
          • Table Saab Grintek – Products and Services
        • Saab Grintek: Recent Announcements and Strategic Initiatives
        • Saab Grintek: Alliances
          • Table Saab Grintek – Alliances
        • Saab Grintek: Recent Contract Wins
          • Table Saab Grintek – Recent Contract Wins
        • IVEMA: Overview
        • IVEMA: Products and Services
          • Table IVEMA – Products and Services
        • IVEMA: Recent Contract Wins
          • Table IVEMA – Recent Contract Wins
        • Aerosud: Overview
        • Aerosud: Products and Services
          • Table Aerosud – Products and Services
        • Aerosud: Recent Announcements and Strategic Initiatives
        • Aerosud: Alliances
          • Table Aerosud – Alliances
        • Aerosud: Recent Contract Wins
          • Table Aerosud – Recent Contract Wins
        • Global Armour: Overview
        • Global Armour: Products and Services
          • Table Global Armour – Products and Services
        • Global Armour: Recent Announcements and Strategic Initiatives
        • Global Armour: Alliances
          • Table Global Armour – Alliances
        • Global Armour: Recent contract wins
          • Table Global Armour – Recent Contract Wins
        • Milkor (Pty) Ltd: Overview
        • Milkor (Pty) Ltd.: Products
          • Table Milkor (Pty) – Products
        • Milkor (Pty) Ltd.: Recent Announcements and Strategic Initiatives
        • Milkor (Pty) Ltd.: Recent Contract Wins
          • Table Milkor (Pty), Ltd. – Recent Contract Wins
        • Paramount Advanced Technologies: Overview
        • Paramount Advanced Technologies: Products
          • Table Paramount Advanced Technologies – Products
        • Paramount Advanced Technologies: Recent Announcements and Strategic Initiatives
        • Paramount Advanced Technologies: Recent Contract Wins
          • Table Paramount Advanced Technologies – Recent Contract Wins
        • Tellumat Defense: Overview
        • Tellumat Defense: Products
          • Table Tellumat Defense – Products
        • Tellumat Defense: Recent Announcements and Strategic Initiatives
        • Tellumat Defense: Alliances
          • Table Tellumat Defense – Alliances
        • Tellumat Defense: Recent Contract Wins
          • Table Tellumat Defense – Recent Contract Wins
    • Business Environment and Country Risk
      • Economic Performance
        • GDP Per Capita
          • Table Figure 38: South African GDP Per Capita (US$), 2015–2025
        • GDP, Current Prices
          • Table Figure 39: South African GDP Current Prices (US$ Billion), 2015–2025
        • Local Currency Unit per US$
          • Table Figure 40: South African LCU per US$ 2015–2024
        • Exports of Goods and Services (LCU Billion)
          • Table Figure 41: South African Exports of Goods and Services (LCU Billion), 2005–2014
        • Imports of Goods and Services (LCU Billion)
          • Table Figure 42: South African Imports of Goods and Services (LCU Billion), 2005–2014
        • Gross National Disposable Income (US$ Billion)
          • Table Figure 43: South African Gross National Disposable Income (US$ Billion), 2005–2014
        • Goods Exports as a Percentage of GDP
          • Table Figure 44: South African Good Exports (% of GDP), 2005–2014
        • Goods Imports as a Percentage of GDP
          • Table Figure 45: South African Good Imports (% of GDP), 2005–2014
        • Government Cash Surplus/Deficit as a Percentage of GDP
          • Table Figure 46: South African Goods Balance (% GDP), 2005–2012
        • Services Imports as a Percentage of GDP
          • Table Figure 47: South African Service Imports (% of GDP), 2005–2014
        • Services Exports as a Percentage of GDP
          • Table Figure 48: South African Service Exports (% of GDP), 2005–2014
        • Foreign Direct Investments
          • Table Figure 49: South African Foreign Direct Investment, Net (BoP, Current US$ Billion), 2005–2014
        • Net Foreign Direct Investments as a Percentage of GDP
          • Table Figure 50: South African Net Foreign Direct Investments (% of GDP), 2005–2014
        • Market Capitalization of Listed Companies (US$ Billion)
          • Table Figure 51: South African Market Capitalization of Listed Companies (US$ Billion), 2005–2012
        • Market Capitalization of Listed Companies as a Percentage of GDP
          • Table Figure 52: South African Market Capitalization of Listed Companies (% of GDP), 2005–2012
        • Mining, Manufacturing, and Utilities Output
          • Table Figure 53: South African Mining, Manufacturing, and Utilities Output (US$ Billion), 2005–2014
    • Appendix
      • Disclaimer

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