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

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

Summary

Ukraine’s total defense expenditure is anticipated to be US$34 billion cumulatively over the forecast period. As a part of the ongoing military reforms, the Ukrainian Ministry of Defense plans to restructure and reform the fighting capability of its armed forces to the western model of network centric maneuver warfare by 2020. The country’s government is also attempting to reorganize the country’s armed forces and bring it up to NATO standards. Although progress has been sluggish, the country is steadily transforming its military strategy and operational command and control from the Soviet model to modern western NATO standards.Ukraine is still faced with a festering, well-funded and equipped insurgency movement within the country that threatens to transform into a long drawn, high attrition battle. The swift capitulation of Ukrainian armed forces during the battle of Crimea and the subsequent losses suffered during the battle in Shakhtarsk Raion, Battle of Horlivka, and Battle of Debaltseve have highlighted the military deficiencies of the Ukrainian Armed Forces, further reinforced by Ukraine’s continued inability to dislodge the insurgents from the Donbass region.In 2019, the country allocated US$3.8 billion for defense and its allocations for national defense are expected to increase form US$4.5 billion in 2020 to US$7.1 billion in 2024, reflecting a CAGR of 12.51%. The country is anticipated to allocate cumulative expenditure of US$34 billion over the forecast period. Driven by the need to contain terrorism, narcotics trafficking and even human trafficking, the Ukrainian government is anticipated to significantly invest in overhauling the country’s moribund internal security apparatus. Ukrainian homeland security (HLS) expenditure increased from US$1.7 billion in 2015 to US$3.1 billion in 2019, reflecting a CAGR of 15.89% during 2015-2019. Ukrainian homeland security expenditure is expected to increase from US$3.6 billion in 2020 to US$6.8 billion by 2024, reflecting a CAGR of 17.18% over the forecast period.Ukraine, having inherited a vast defense manufacturing complex from the erstwhile Soviet Union, has access to a relatively competent and self-reliant defense industry base which is capable of meeting most of the country’s basic defense requirements. China accounted for 27% of Ukraine’s exports and was the single largest customer during 2014-2018. Although Ukraine’s relations with Russia have deteriorated, Russia still accounted for the second highest share of Ukrainian defense exports by value at 23.2%.Ever since its independence in 1991, the Ukrainian defense industry has suffered from perpetual underfunding, which has significantly impacted its efficiency. The Ukrainian defense budget for 2019, which is valued at US$3.7 billion, earmarked almost 83.6% of the defense budget for revenue expenses, setting aside just US$621.4 million for capital expenditure, compelling the Ukrainian MoD to adopt crowd funding strategies to fund military procurements. Since 2014, Ukrainians were reported to have donated an average of US$35,000 every day to crowd fund army acquisitions, which has enabled the country to proceed with the procurement of small reconnaissance UAV.The report “Ukrainian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024” offers detailed analysis of the Ukrainian 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 Ukrainian defense industry market size and drivers: detailed analysis of the Ukrainian 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 Ukrainian defense industry
Companies mentioned - Raytheon, Antonov ASTC, RPC Fort, The Kharkiv Morozov Machine Building Design Bureau (KMDB),The Malyshev Plant, AvtoKrAZ Holding Company and Motor Sich.

Scope
  • With one of the highest annual defense expenditure growth rates in the world, 29.3% in 2018, Ukraine mantained a robust growth indefense spending even in 2019, making it an attractive defense market. Between 2015 and 2019, the country’s capital expenditure allocation stood at an average of 18.9% of the total defense budget, and is expected to slightly decline to 17.9% over the forecast period.
  • Overall, Ukraine is projected to spend a total of US$5.1 billion on the acquisition of military hardware between 2020 and 2024.
Reasons to buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Ukrainian 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
  • Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Ukrainian 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: Ukraine Analysis of Defense Budget: 2020 and 2024
    • Table Figure 2: Ukrainian Defense Imports/Exports: 2014 and 2018
  • Market Attractiveness and Emerging Opportunities
    • Table Figure 3: Ukrainian Top Five Prospective Procurements/Developments
    • Current Market Scenario
      • Primary Threat Perception
        • Table Figure 4: Ukrainian National Security Threats
      • Military Doctrine and Strategy
      • Procurement Programs
        • Table Ukrainian Ongoing Development and Procurement Programs, 2019
        • Table Ukrainian Future Procurement Programs, 2019
        • Table Ukrainian Top Defense Procurement Programs by Value (US$ Million), 2019–2024
      • Geopolitical, Social and Economic Scenario
      • Political and Strategic Alliances
        • Table Figure 5: Ukraine's Partnering Countries for Defense Cooperation and Military Training
        • Table Ukraine's Defense Cooperation
        • Table Ukraine's Military Training Exercises
    • Defense Market Size
      • Ukraine's defense expenditure to register a CAGR of 12.51% over 2020– 2024
        • Table Ukrainian Defense Expenditure (UAH Billion and US$ Billion), 2015–2024
        • Table Figure 6: Ukrainian Defense Expenditure (UAH Billion), 2015–2024
        • Table Figure 7: Ukrainian Defense Expenditure (US$ Billion), 2015–2024
      • Threat from Russia, coupled with threats of protracted insurgency in Donbass, will continue to drive Ukrainian defense expenditure
        • Table Ukrainian State Procurement of New and Refurbished Weapons and Military Equipment, 2014–2017
        • Table Ukrainian Restoration and Repairs of Basic Weapons and Military Equipment in Number of Items, 2015–2017
      • The defense budget as a percentage of GDP is expected to be 5% over the forecast period
        • Table Ukrainian GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2015–2024
        • Table Figure 8: Ukrainian GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015–2024
    • Analysis of Defense Budget Allocation
      • The majority of Ukraine's defense budget is earmarked for revenue expenditure
        • Table Ukrainian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015–2024
        • Table Figure 9: Ukrainian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015–2024
      • Capital expenditure forecast to increase at a CAGR of 15.12% over 2020– 2024
        • Table Ukrainian Defense Capital Expenditure, (UAH Billion and US$ Billion), 2015–2024
        • Table Figure 10: Ukrainian Capital Budget Allocation (UAH Billion), 2015–2024
        • Table Figure 11: Ukrainian Capital Budget Allocation (US$ Billion), 2015–2024
      • Per capita defense expenditure expected to increase over the forecast period
        • Table Ukrainian Per-Capita Defense Expenditure (US$), 2015–2024
        • Table Figure 12: Ukrainian Per Capita Defense Expenditure (US$), 2015–2024
    • Homeland Security Market Size and Forecast
      • Ukrainian homeland security market expected to grow at a CAGR of 17.53% over the forecast period
        • Table Ukrainian Homeland Security Expenditure (UAH Billion and US$ Billion), 2015–2024
        • Table Figure 13: Ukrainian Homeland Security Budget (UAH Billion), 2015–2024
        • Table Figure 14: Ukrainian Homeland Security Budget (US$ Billion), 2015–2024
      • Measures to curb illegal activities such as drug trafficking, human trafficking, and organized crime to drive homeland security expenditure over the forecast period
    • Benchmarking with Key Global Markets
      • Ukraine is a small defense spender compared to others in Eastern Europe
        • Table Benchmarking with Key Markets – 2015–2019 vs 2020–2024
        • Table Figure 15: Benchmarking with Key Markets – 2015–2019 vs 2020–2024
      • The US has the largest defense expenditure in the world
        • Table Figure 16: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2019 and 2024
      • Ukrainian defense expenditure expected to reach 3.8% of GDP by 2024
        • 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 Ukrainian Defense Sectors by Value (US$ Million), 2019–2024
      • Transport Aircraft
        • Table Figure 18: Ukraine's Transport Aircraft Market Size (US$ Million), 2019–2024
      • Land-based C4ISR
        • Table Figure 19: Ukraine's Land-based C4ISR Market Size (US$ Million), 2019–2024
      • Naval Vessels MRO – Corvettes
        • Table Figure 20: Ukraine's Corvettes Market Size (US$ Million), 2019–2024
  • Defense Procurement Market Dynamics
    • Table Figure 21: Top Ukrainian Defense Procurements in Terms of Their Supplier Relationships
    • Import Market Dynamics
      • A relatively small defense budget limits Ukraine's defense imports
        • Table Figure 22: Ukrainian Defense Imports TIV Value (US$ Million), 2014–2018
      • Czechia or Czech Republic accounted for 37.5% of Ukrainian defense imports during 2014–2018
        • Table Figure 23: Ukrainian Arms Imports by Country, 2014–2018
      • Armored vehicles accounted for the majority of Ukrainian defense imports
        • Table Figure 24: Ukrainian Defense Imports by Category (%), 2014–2018
    • Export Market Dynamics
      • Ukraine exports a major portion of its domestic defense production
        • Table Figure 25: Ukrainian Defense Exports TIV Value (US$ Million), 2014–2018
      • Russia, China, and Thailand emerged as the largest importers of Ukrainian defense equipment
        • Table Figure 26: Ukrainian Defense Exports by Country (%), 2014–2018
      • Aircraft, engines and armored vehicles were the most exported defense goods
        • Table Figure 27: Ukrainian Defense Exports by Category (%), 2014–2018
  • Industry Dynamics
    • Five Forces Analysis
      • Table Figure 28: Industry Dynamics – Porter's Five Forces Analysis
      • Bargaining Power of Supplier: Low-Medium
      • Bargaining Power of Buyer: Low
      • Barrier to Entry: Medium to High
      • Intensity of Rivalry: Low to Medium
      • Threat of Substitution: High
  • Market Entry Strategy
    • Market Regulation
      • Defense sector liberalization bodes well for domestic defense industry
    • Market Entry Route
      • Budgeting Process
        • Table Ukrainian Budget Formation Timetable
    • Procurement Policy and Process
      • Joint development of defense goods provides investors with a market entry opportunity
      • Foreign investors can enter the industry through direct sales
    • Key Challenges
      • Table Figure 29: Ukraine Market Challenges
      • Small defense budget offers equipment manufacturers limited investment potential
      • Lack of necessary infrastructure impedes growth of domestic defense industry
      • Corruption and a lack of transparency discourages investors from entering the market
  • Competitive Landscape and Strategic Insights
    • Competitive Landscape Overview
      • Table Competitive Landscape of the Ukrainian Defense Industry
      • Table Top Defense Suppliers in the Ukrainian Defense Industry By Value (US$ Million), 2019–2024
      • Ukrainian Market Share Analysis, 2019–2024
        • Table Figure 30: Ukrainian Market Share Analysis (%), 2019–2024
      • Domestic companies fulfill the majority of Ukrainian defense requirements
    • Key Foreign Companies
      • Raytheon: Overview
      • Raytheon: Products
        • Table Raytheon – Products
      • Raytheon: Recent Announcements and Strategic Initiatives
      • Raytheon: Alliances
        • Table Raytheon – Alliances
    • Key Public Companies
      • Antonov ASTC: Overview
      • Antonov ASTC: Products and Services
        • Table Antonov ASTC – Products and Services
      • Antonov ASTC: Recent Announcements and Strategic Initiatives
      • Antonov ASTC: Alliances
        • Table Antonov ASTC – Alliances
      • Antonov ASTC: Recent Contract Wins
        • Table Antonov ASTC – Recent Contract Wins
      • RPC Fort: Overview
      • RPC Fort: Products
        • Table RPC Fort – Products
      • RPC Fort: Alliances
        • Table RPC Fort – Alliances
      • RPC Fort: Recent Contract Wins
        • Table RPC Fort – Recent Contract Wins
      • KMDB: Overview
      • KMDB: Products
        • Table KMDB – Products
      • KMDB: Recent Announcements and Strategic Initiatives
      • KMDB: Recent Contract Wins
        • Table KMDB – Recent Contract Wins
      • Malyshev Plant: Overview
      • Malyshev Plant: Products
        • Table Malyshev Plant – Products
      • Malyshev Plant: Recent Announcements and Strategic Initiatives
      • Malyshev Plant: Recent Contract Wins
        • Table Malyshev Plant – Recent Contract Wins
      • AvtoKrAZ Holding Company: Overview
      • AvtoKrAZ Holding Company: Products
        • Table AvtoKrAZ Holding Company – Products
      • AvtoKrAZ Holding Company: Recent Announcements and Strategic Initiatives
      • AvtoKrAZ Holding Company: Recent Contract Wins
        • Table AvtoKrAZ Holding Company – Recent Contract Wins
      • Motor Sich: Overview
      • Motor Sich: Products and Services
        • Table Motor Sich – Products and Services
      • Motor Sich: Recent Announcements and Strategic Initiatives
      • Motor Sich: Alliances
        • Table Motor Sich – Alliances
      • Motor Sich: Recent Contract Wins
        • Table Motor Sich – Recent Contract Wins
  • Business Environment and Country Risk
    • Economic Performance
      • GDP Per Capita
        • Table Figure 31: Ukrainian GDP Per Capita, 2015–2025
      • GDP, Current Prices
        • Table Figure 32: Ukrainian GDP, Current Prices (US$ Billion), 2015–2025
      • Exports of Goods and Services (LCU Billion)
        • Table Figure 33: Ukrainian Exports of Goods and Services (LCU Billion), 2005–2014
      • Imports of Goods and Services (LCU Billion)
        • Table Figure 34: Ukrainian Imports of Goods and Services (LCU Billion), 2005–2014
      • Local Currency Unit per US Dollar
        • Table Figure 35: Local Currency per US$, 2015–2024
      • Market Capitalization of Listed Companies
        • Table Figure 36: Ukrainian Market Capitalization of Listed Companies (US$ Billion), 2005–2012
      • Market Capitalization of Listed Companies (% of GDP)
        • Table Figure 37: Ukrainian Market Capitalization of Listed Companies (% of GDP), 2005–2012
      • Government Cash Surplus/Deficit as a Percentage of GDP
        • Table Figure 38: Ukrainian Government Cash Surplus/Deficit as a Percentage of GDP, 2005–2012
      • Goods Exports as a Percentage of GDP
        • Table Figure 39: Ukrainian Goods Exports as a Percentage of GDP, 2005–2014
      • Goods Imports as a Percentage of GDP
        • Table Figure 40: Ukrainian Goods Imports as a Percentage of GDP, 2005–2014
      • Services Imports as a Percentage of GDP
        • Table Figure 41: Ukrainian Services Imports as a Percentage of GDP, 2005–2014
      • Service Exports as a Percentage of GDP
        • Table Figure 42: Ukrainian Service Exports as a Percentage of GDP, 2005–2014
      • Foreign Direct Investment
        • Table Figure 43: Ukrainian Foreign Direct Investment, Net (BoP, current US$ Billion), 2005–2014
      • Net Foreign Direct Investment as a Percentage of GDP
        • Table Figure 44: Ukrainian Net Foreign Direct Investment as a Percentage of GDP, 2005–2014
      • Mining, Manufacturing, Utilities Output (LCU Billion)
        • Table Figure 45: Ukrainian Mining, Manufacturing, Utilities Output (LCU Billion), 2005–2014
  • Appendix
    • Disclaimer

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