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Future of the Argentina Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

1. Introduction
1.1. What is this Report about?
1.2. Definitions
1.3. Summary Methodology
1.4. About Strategic Defence Intelligence
2. Executive Summary
3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary threat perception
3.1.2. Military Doctrine & Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Social, Political and Economic Environment & Support for Defense Projects
3.1.6. Political & Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Argentina defense expenditure is expected to reach US$10.5 billion by 2022
3.2.2. Falkland Islands dispute, modernization of armed forces and contributions to international peacekeeping missions are the main factors driving Argentina defense expenditure
3.2.3. Defense expenditure as a percentage of GDP to increase marginally over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Argentina defense budget split between capital and revenue expenditure
3.3.2. Capital expenditure to increase at a CAGR of 10.58% over 2018-2022
3.3.3. Argentina revenue expenditure is projected to reach US$32.5 billion cumulatively over forecast period
3.3.4. Per capita defense expenditure is expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Argentina homeland security expenditure anticipated to increase at a CAGR of 13.66% over forecast period
3.4.2. Treat of terrorism, Human and drug trafficking to drive homeland security expenditure
3.4.3. Argentina is considered at some risk of terrorism
3.4.4. Argentina faces some-level threat from foreign terrorist organizations
3.4.5. Argentina has a terrorism index score of “0.5”
3.5. Benchmarking with Key Global Markets
3.5.1. Argentine defense expenditure to increase at a CAGR of 13.75% during the forecast period
3.5.2. Argentine defense expenditure is one of the largest in Latin American countries
3.5.3. Argentina’s defense budget as a percentage of GDP to reach 1.2% by 2022
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Submarine
3.6.2. Multi-Role Aircraft
3.6.3. Transport Aircraft
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Argentine defense imports anticipated to increase during the forecast period
4.1.2. The US was a major arms supplier to Argentina during 2012-2016
4.1.3. Aircraft accounts for the majority of Argentine arms imports
4.2. Export Market Dynamics
4.2.1. Argentina has negligible arms exports
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of Buyer: Medium
5.1.2. Bargaining power of Supplier: Medium to low
5.1.3. Barrier to entry: Medium
5.1.4. Intensity of rivalry: Medium to high
5.1.5. Threat of Substitution: Low
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset policy aids development of domestic defense industry
6.1.2. Open foreign direct investment policy
6.2. Market Entry Route
6.2.1. Budget Process
6.2.2. Procurement Policy and Process
6.2.3. Foreign Military Sales is an effective entry route for foreign defense companies
6.2.4. Joint product development and military collaborations provide market entry opportunities
6.3. Key Challenges
6.3.1. Small defense budget and limited technological capability limits market entry for foreign companies
6.3.2. Corruption in the Argentine defense sector hinders its growth
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Domestic Public Companies
7.2.1. Fábrica Argentina de Aviones: Overview
7.2.2. Fábrica Argentina de Aviones: Products
7.2.3. Fábrica Argentina de Aviones: Recent announcements and strategic initiatives
7.2.4. Fábrica Argentina de Aviones: Alliances
7.2.5. Fábrica Argentina de Aviones: Recent contract wins
7.2.6. Astillero Río Santiago: Overview
7.2.7. Astillero Río Santiago: Products
7.2.8. Astillero Río Santiago: Recent announcements and strategic initiatives
7.2.9. Astillero Río Santiago: Alliances
7.2.10. CITEDEF: Overview
7.2.11. CITEDEF: Products and services
7.2.12. CITEDEF: Recent announcements and strategic initiatives
7.2.13. INVAP SE: Overview
7.2.14. INVAP SE: Products
7.2.15. INVAP S.E.: Recent announcements and strategic initiatives
7.2.16. INVAP S.E.: Alliances
7.2.17. Dirección General de Fabricaciones Militares: Overview
7.2.18. Dirección General de Fabricaciones Militares: Products
7.2.19. Dirección General de Fabricaciones Militares: Recent announcements and strategic initiatives
7.2.20. Dirección General de Fabricaciones Militares: Alliances
7.2.21. Tandanor: Overview
7.2.22. Tandanor: Services:
7.2.23. Tandanor: recent announcements and strategic initiatives
7.2.24. Tandanor: Recent contract wins
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita
8.1.2. GDP, Current Prices
8.1.3. Exports of goods and services
8.1.4. Imports of goods and services
8.1.5. Gross national disposable income
8.1.6. Local Currency Unit per US$
8.1.7. Market Capitalization of Listed Companies
8.1.8. Market Capitalization of Listed Companies (% of GDP)
8.1.9. Goods exports as % of GDP
8.1.10. Goods imports as % of GDP
8.1.11. Service Imports as % of GDP
8.1.12. Service Exports as % of GDP
8.1.13. Foreign Direct Investment
8.1.14. Net foreign direct investment as % of GDP
8.1.15. Mining, Manufacturing, Utilities Output
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Argentina Land Forces Strength
Table 2: Argentina Navy Strength
Table 3: Argentina Air Force Strength
Table 4: Argentina Ongoing Procurement Programs
Table 5: Argentina Future Procurement Programs
Table 6: Argentina Defense Expenditure (ARS Billion & US$ Billion), 2013-2022
Table 7: Argentina GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2013-2022
Table 8: Argentina Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 9: Argentina Defense Capital Expenditure (ARS Billion & US$ Billion), 2013-2022
Table 10: Argentina Defense Revenue Expenditure (ARS Billion & US$ Billion), 2013-2022
Table 11: Argentina Per-Capita Defense Expenditure (US$), 2013-2022
Table 12: Argentina Homeland Security Expenditure (ARS Billion & US$ Billion), 2013-2022
Table 13: Terrorism Index, 2017
Table 14: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022
Table 15: Offset Regulations in Argentina
Table 16: Argentina Budget Preparation Process
Table 17: Competitive Landscape of the Argentine Defense Market
Table 18: Fábrica Argentina de Aviones - Product Focus
Table 19: Fábrica Argentina de Aviones - Alliances
Table 20: Fábrica Argentina de Aviones - Recent Contract Wins
Table 21: Astillero Río Santiago - Product Focus
Table 22: Astillero Río Santiago - Alliances
Table 23: CITEDEF- Product and Services
Table 24: INVAP SE - Product Focus
Table 25: INVAP S.E. - Alliances
Table 26: Dirección General de Fabricaciones Militares - Product Focus
Table 27:Dirección General de Fabricaciones Militares - Alliances
Table 28: Tandanor - Services portfolio
Table 29: Tandanor - Recent Contract Wins
List of Figures
Figure 1: Argentina Defense Expenditure (ARS Billion), 2013-2022
Figure 2: Argentina Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Argentina GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 4:Argentina Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Argentina Defense Capital Expenditure (ARS Billion), 2013-2022
Figure 6: Argentina Defense Capital Expenditure (US$ Billion), 2013-2022
Figure 7: Argentina Defense Revenue Expenditure (ARS Billion), 2013-2022
Figure 8:Argentina Defense Revenue Expenditure (US$ Billion), 2013-2022
Figure 9: Argentina Per Capita Expenditure (US$), 2013-2022
Figure 10: Argentina Homeland Security Budget (ARS Billion), 2013-2022
Figure 11: Argentina Homeland Security Budget (US$ Billion), 2013-2022
Figure 12: Terrorism Heat Map, 2017
Figure 13: Terrorism Index, 2017
Figure 14: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022
Figure 15: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2017 and 2022
Figure 16: Benchmarking with Large Defense Spenders as % of GDP - 2017
Figure 17: Submarines Market Size (US$ Million), 2017-2027
Figure 18: Multi-Role Aircraft Market Size (US$ Million), 2017-2027
Figure 19: Transport Aircraft Market Size (US$ Million), 2017-2027
Figure 20: Argentine Defense Imports , 2012-2016
Figure 21: Argentine Defense Imports by country (%), 2012-2016
Figure 22: Argentine defense Imports by Category, 2012-2016
Figure 23: Industry Dynamics - Porter’s Five Forces Analysis
Figure 24: Argentina GDP Per Capita, 2015-2025
Figure 25: Argentina GDP, Current Prices (US$ Billion), 2015-2025
Figure 26: Argentina Exports of goods and services (LCU Billion), 2005-2014
Figure 27: Argentina Imports of goods and services (LCU Billion), 2005-2014
Figure 28: Argentina Gross National Disposable Income (US$ billion), 2005-2013
Figure 29: Local Currency per US$, 2015-2024
Figure 30: Argentina Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 31: Argentina Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 32: Argentina Goods Exports as % of GDP, 2005-2014
Figure 33: Argentina Goods Imports as % of GDP, 2005-2014
Figure 34: Argentina Service Imports as % of GDP, 2005-2014
Figure 35: Argentina Service Exports as % of GDP, 2005-2014
Figure 36: Argentina Foreign Direct Investment (US$ Billion), 2006-2014
Figure 37: Argentina Net foreign direct investment as % of GDP, 2006-2014
Figure 38: Argentina Mining, Manufacturing, Utilities Output (US$ Billion), 2005-2014

Future of the Argentina Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Summary

Argentine defense budget values US$5.9 Billion in 2017, and registered a CAGR of 5.14% during the historic period. The on-going modernization and procurement programs of the armed forces, the Falkland Islands territorial dispute with the UK, and participation in peacekeeping missions drove Argentine defense expenditure during 2013-2017. With this trend expected to continue over the forecast period, the country is projected to cumulatively spend US$42.3 Billion during 2018-2022. As a percentage of GDP, the country’s defense expenditure is expected to average 1.1% during the forecast period, compared to 0.9% recorded in the historic period.

Argentina’s defense capital expenditure valued US$1.5 Billion in 2017, and recorded a CAGR of 3.72% during 2013-2017. Capital expenditure is projected to grow at a CAGR of 10.58% during the forecast period to value US$2.3 Billion in 2022. This is primarily due to the procurement of advanced defense equipment and focus on increasing the indigenous defense manufacturing capabilities.

Aircraft accounted for the largest share of imports during 2012-2016, with the US being the largest supplier. Argentina’s domestic defense capabilities are restricted to the manufacture of trainer aircraft, transport aircraft, submarines, and small arms. Aircraft accounted for 72% of Argentina’s arms imports, followed by sensors and engines. In addition, rising capital expenditure allocations and the need to modernize its weapons arsenal are expected to increase defense imports during the forecast period.

Argentina’s defense exports were negligible during the historic period as the domestic companies, which are primarily involved in the manufacturing of trainer aircraft, UAVs, small arms, and submarines, are less sophisticated compared to other global partners. However, the country is increasing its efforts to reduce its dependency and is encouraging joint agreements and projects to boost its indigenous market.

Over the forecast period the country plans to acquire some fighter aircraft to fill in the void created by the decommissioning of Mirage fighters in 2015. The Argentine Air Force has evinced interest in acquiring 20 units of either J-20 or JF-17/FC-10 Thunder aircraft for the role. Similarly the Argentine Navy has shown interest in acquiring five units of Chinese P18 corvettes.

The report “Future of the Argentina Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of Argentina 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 -
- Argentina defense industry market size and drivers: Detailed analysis of Argentina defense industry during 2018-2022, 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. It also details the key challenges faced by defense market participants within the country.
- Porter’s Five Force analysis of Argentina 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 over the next 10 years.
- Competitive landscape and strategic insights: Analysis of the competitive landscape of Argentina 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 in this report: Fábrica Argentina de Aviones SA (FAdeA), Astillero Río Santiago, The Institute of Scientific and Technological Research for the Defense (CITIDEF), INVAP SE, Dirección General de Fabricaciones Militares (DGFM) and Tandanor.

Scope

- The Argentine defense budget values US$5.9 billion in 2017, and registered a CAGR of 5.14% during the historic period. The on-going modernization and procurement programs of the armed forces, the Falkland Islands territorial dispute with the UK, and participation in peacekeeping missions drove Argentine defense expenditure during 2013-2017. With this trend expected to continue over the forecast period, the country is projected to cumulatively spend US$42.3 billion during 2018-2022.
- During 2013-2017, an average of 26.6% of the country’s defense budget was allocated to capital expenditure, while an average of 73.4% was reserved for revenue expenditure. Over the forecast period 2018-2022, the share of capital expenditure is expected to average 23.2%, while the remaining 76.8% will be assigned to revenue expenditure, which will continue to comprise the majority of the nation‘s defense budget.
- The MoD is expected to invest in submarines, multi-role aircraft and transport aircraft.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of Argentinan 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 Argentina defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts


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