Brazil - Defense and Security: Modernization of defense systems to drive expenditure (Strategy, Performance and Risk Analysis)
The aircraft category is a key growth driver of the Brazilian defense and security industry and accounted for 34.3% of capital expenditure in 2016. It was followed by the C4ISR electronics and IT category which accounted for 19.2%. Modernization initiatives increased the accountability of these segments and investments in highly fighter aircraft, submarines, and C4ISR will drive capital expenditure.
MarketLine’s premium reports provide a comprehensive overview of each market within a country’s defense industry; benchmark key performance indicators against regional and global peers; review industry trends and drivers; evaluate the competitive landscape and innovation potential of singular markets; and conduct data-driven SWOT analysis to ascertain a structured assessment of the performance of each territory represented.Key Highlights
Sporting events to fuel homeland security expenditure:
Brazil’s desire to host international sporting events boosts the country’s spending on homeland security. Significant investment in command and control centers, training, and security equipment such as mobile police stations, boats, cameras, anti-bomb systems, video-walls, radio communications, media intelligence monitoring, video-monitoring and cybersecurity software have all contributed. Homeland security spending stood at US$3.9 billion in 2016 and will post a forecast-period CAGR of 3.9% to reach US$4.8 billion in 2021.
Demand for low-cost and quality defense systems to stimulate exports:
Brazil’s defense exports to less developed neighboring countries such as Argentina, Chile and Colombia are growing. Exports recorded a CAGR of 28.6%, from US$31.0 million in 2011 to US$109.0 million in 2016, owing to a demand for higher quality but low-cost systems. The government has announced plans to increase loans to defense firms to further promote arms exports.
Submarines, frigates and corvettes to drive capital expenditure growth in the naval segment:
The naval ships category reported a capital expenditure of US$1.7 billion in 2016 and will post a forecast-period CAGR of 5% to reach US$2.1 billion in 2021. Submarines and submersibles accounted for 42.8% of Brazil’s naval ships CAPEX in 2016. Robust investments in corvettes, frigates, and amphibious ships will drive the naval vessels and MRO market in the Latin American region.
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