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

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

Summary

Belgium’s arms imports are expected to be at high levels due to procurement plans for new fighter aircraft, refueling aircraft, and military transport aircraft. Aircraft, naval vessels, armored vehicles, and sensors accounted for most defense imports. Defense companies based in neighboring European countries such as France, Germany, Switzerland, as well as the US and Portugal, have been the main arms suppliers to Belgium.

The country’s budget allocation for defense capital expenditure is expected to increase from 22.3% in 2017 to 23.2% in 2022. Capital expenditure over the forecast period is expected to increase at a CAGR of 7.65% from US$590.4 Million in 2017 to US$850.4 Million in 2022, owing to the significant uptick in procuring defense equipment to replace outdated ones.

Belgium’s revenue expenditure is expected to increase marginally from US$2.1 Billion in 2017 to US$2.8 Billion in 2022. Opportunities related to the procurement of defense equipment in Belgium are expected to be in areas such as multi-role aircraft, multi-role aircraft MRO, transport aircraft, missiles, and arms and ammunitions.

The Belgian government’s austerity measures and focus on reducing public debt have been the primary reasons for the decline in the defense budget from US$3.5 Billion in 2013 to US$2.6 Billion in 2017, reflecting a CAGR of -7.08%. Over the forecast period, the country’s defense budget is expected to recover and register a CAGR of 6.82%, increasing from US$2.8 Billion in 2018 to US$3.7 Billion by 2022.

Belgium’s homeland security (HLS) expenditure witnessed a declining CAGR of -0.07% during the historic period, from US$3.6 Billion in 2013 to US$3.5 Billion in 2017. Stimulated by the efforts to combat the rising incidences of cyber-crimes, terrorism and drug trafficking, the HLS budget is anticipated to increase over the coming years at a projected CAGR of 8.03%, from US$3.8 Billion in 2018 to US$5.2 Billion in 2022.

The report “Future of the Belgium Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Belgian defense industry with market size forecasts covering the next five years.

In particular, this report provides the following analysis -
- The Belgian defense industry market size and drivers: Detailed analysis of the Belgian 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.
- 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 the Belgian 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: FN Herstal,Sonaca SA, Cockerill Maintenance & Ingénierie SA, SABCA Group, Esterline Belgium BVBA, Asco Industries, Mecar SA, Thales Belgium, Northrop, Grumman Corp., Airbus Helicopters.

Scope

- The Belgian government’s austerity measures and focus on reducing public debt have been the primary reasons for the decline in the defense budget from US$3.5 billion in 2013 to US$2.6 billion in 2017, reflecting a CAGR of -7.08%. Although the budget is projected to remain low over the next three years, an expected economic upturn in the second half of the decade will lead to an increase in the defense budget from 2018 onwards. On a cumulative basis, expenditure over 2018-2022 is expected to be US$16.2 billion, higher than US$15 billion spent during the historic period.Commitment towards operations with NATO allies and the continuation of ongoing military hardware procurement programs are expected to drive the country’s military expenditure.The country’s defense expenditure is expected to focus on the procurement of equipment to augment its air defense capabilities, enhancing operational capabilities of the current fleet of naval vessels, and communications and surveillance systems over the next five years.
- The Belgian Ministry of Defence (MoD) allocated an average of 22.3% to capital expenditure during 2013-2017, and is expected to increase marginally over the forecast period to reach an average of 22.9%. Opportunities related to the procurement of defense equipment in Belgium are expected to be in areas such as multi-role aircraft, multi-role aircraft MRO, transport aircraft, missiles, and arms and ammunitions.
- The MoD is expected to invest in fighters and Multi-role aircraft, fighters & multi-role aircraft MRO 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 the Belgian 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 Belgian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts


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
3.1.4.1. Ongoing procurement programs
3.1.4.2. Future 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. Belgian defense expenditure is expected to increase at a CAGR of 6.82% over the forecast period
3.2.2. Equipment procurement plans and joint operations expected to drive defense expenditure over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Belgium’s defense expenditure as a percentage of GDP expected to decrease
3.3.2. Share of capital expenditure to average 22.9% over the forecast period
3.3.3. Capital expenditure expected to increase at a CAGR of 7.65% over 2018-2022
3.3.4. Per capita defense expenditure set to decrease over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Belgian homeland security expenditure expected to increase at a CAGR of 8.03% over the forecast period
3.4.2. Drug trafficking and cyber security are the main homeland security concerns
3.4.3. Belgium falls under “some risk” of terrorism category
3.4.4. Belgium faces some level of threat from foreign terrorist organizations
3.4.5. Belgium has a terrorism index score of 1.2
3.5. Benchmarking with Key Global Markets
3.5.1. Belgian defense budget expected to increase at a higher rate than other European countries over the forecast period
3.5.2. Belgian defense expenditure is low compared to other European nations
3.5.3. Belgium allocates a comparatively low share of GDP for defense
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Fighters & Multi-role Aircraft
3.6.2. Fighters and Multi-Role Aircraft MRO
3.6.3. Transport Aircraft
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports are expected to recover over the forecast period
4.1.2. Belgium sourced most its arms imports from its neighbors
4.1.3. Aircraft and armored vehicles dominate military hardware imports
4.2. Export Market Dynamics
4.2.1. Arms exports to increase during the forecast period
4.2.2. Belgian arms exports expected to reach new markets over the forecast period
4.2.3. Aircraft and ships are the main exported defense products
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: low to medium
5.1.2. Bargaining power of buyer: medium
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: low to high
5.1.5. Threat of substitution: low to medium
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset policy aids development of domestic defense industry
6.1.2. Belgium permits 100% FDI in defense industry
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy & Process
6.2.3. Joint weapons development program, a viable market entry route
6.2.4. Subsidiaries provide market entry opportunities
6.2.5. Acquisition of domestic companies enables entrance to market
6.3. Key Challenges
6.3.1. Stringent offset policy discourages foreign OEMs from entering the industry
6.3.2. Limited defense budget discourages investors from market entry
6.3.3. Preference for EU companies poses a challenge for non-European companies
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. FN Herstal: overview
7.2.2. FN Herstal: products
7.2.3. FN Herstal: recent announcements and strategic initiatives
7.2.4. FN Herstal: alliances
7.2.5. FN Herstal: recent contract wins
7.2.6. Sonaca SA: overview
7.2.7. Sonaca SA: products and services
7.2.8. Sonaca SA: recent announcements and strategic initiatives
7.2.9. Sonaca SA: alliances
7.2.10. Sonaca SA: recent contract wins
7.2.11. Cockerill Maintenance & Ingénierie SA: overview
7.2.12. Cockerill Maintenance & Ingénierie SA: products and services
7.2.13. Cockerill Maintenance & Ingénierie SA: recent announcements and strategic initiatives
7.2.14. Cockerill Maintenance & Ingénierie SA: alliances
7.2.15. Cockerill Maintenance & Ingénierie SA: recent contract wins
7.2.16. SABCA Group: overview
7.2.17. SABCA Group: products and services
7.2.18. SABCA Group: recent announcements and strategic initiatives
7.2.19. SABCA Group: alliances
7.2.20. SABCA Group: recent contract wins
7.2.21. Esterline Belgium BVBA: overview
7.2.22. Esterline Belgium BVBA: products and services
7.2.23. Esterline Belgium BVBA: recent announcements and strategic initiatives
7.2.24. Esterline Belgium BVBA: alliances
7.2.25. Esterline Belgium BVBA: recent contract wins
7.2.26. Asco Industries: overview
7.2.27. Asco Industries: products and services
7.2.28. Asco Industries: recent announcements and strategic initiatives
7.2.29. Asco Industries: alliances
7.2.30. Asco Industries: recent contract wins
7.3. Key Foreign Companies
7.3.1. Mecar SA: overview
7.3.2. Mecar SA: products
7.3.3. Mecar SA: recent announcements and strategic initiatives
7.3.4. Mecar SA: alliances
7.3.5. Mecar SA: recent contract wins
7.3.6. Thales Belgium: overview
7.3.7. Thales Belgium: products
7.3.8. Thales Belgium: recent announcements and strategic initiatives
7.3.9. Thales Belgium: alliances
7.3.10. Thales Belgium: recent contract wins
7.3.11. Northrop Grumman Belgium: overview
7.3.12. Northrop Grumman Belgium: products and services
7.3.13. Northrop Grumman Belgium: recent announcements and strategic initiatives
7.3.14. Northrop Grumman Belgium: recent contract wins
7.3.15. Airbus Helicopters: overview
7.3.16. Airbus Helicopters: products and services
7.3.17. Airbus Helicopters: recent announcements and strategic initiatives
7.3.18. Airbus Helicopters: alliances
7.3.19. Airbus Helicopters: recent contract wins
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. Gross Domestic per Capita
8.1.2. Gross Domestic Product, current US$
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 as a % of GDP
8.1.9. Government Cash Surplus/Deficit as % of GDP
8.1.10. Goods Exports as a % of GDP
8.1.11. Goods Imports as a % of GDP
8.1.12. Services Imports as a % of GDP
8.1.13. Services Exports as a % of GDP
8.1.14. Foreign direct investment, net (BoP, current US$ Bn)
8.1.15. Net foreign direct investment as % of GDP
8.1.16. Mining, Manufacturing, Utilities Output
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Belgian Army Strength
Table 2: Belgian Navy Strength
Table 3: Belgian Air Force Strength
Table 4: Belgian Ongoing Procurement Programs
Table 5: Belgian Future Procurement Programs
Table 6: Belgian Defense Expenditure (EUR Billion & US$ Billion), 2013-2022
Table 7: Belgian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 8: Belgian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 9: Belgian Defense Capital Expenditure (EUR Million & US$ Million), 2013-2022
Table 10: Belgian Per Capita Defense Expenditure (US$), 2013-2022
Table 11: Belgian Homeland Security Expenditure (EUR Billion & US$ Billion), 2013-2022
Table 12: Terrorism Index, 2017
Table 13: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Table 14: Offset Regulations in Belgium
Table 15: Belgian Budget Formation Timetable:
Table 16: Belgian Participation in International Defense Development Programs
Table 17: Competitive Landscape of the Belgian Defense Industry
Table 18: FN Herstal- Product focus
Table 19: FN Herstal- Alliances
Table 20: FN Herstal- Recent Contract Wins
Table 21: Sonaca SA- Product focus
Table 22: Sonaca SA- Alliances
Table 23: Sonaca SA - Contracts
Table 24: Cockerill Maintenance & Ingénierie SA- Product focus
Table 25: Cockerill Maintenance & Ingénierie SA- Alliances
Table 26: Cockerill Maintenance & Ingénierie SA- Recent Contract Wins
Table 27: SABCA Group- Product focus
Table 28: SABCA Group- Alliances
Table 29: SABCA Group- Recent Contract Wins
Table 30: Esterline Belgium BVBA- Product focus
Table 31: Esterline Belgium BVBA- Alliances
Table 32: Esterline Belgium BVBA- Recent Contract Wins
Table 33: Asco Industries- Product focus
Table 34: Asco Industries- Alliances
Table 35: Asco Industries- Recent Contract Wins
Table 36: Mecar SA- Product focus
Table 37: Mecar SA- Alliances
Table 38: Mecar SA- Recent Contract Wins
Table 39: Thales Belgium - Product focus
Table 40: Thales Belgium- Alliances
Table 41: Thales Belgium- Recent Contract Wins
Table 42: Northrop Grumman Belgium - Product focus
Table 43: Northrop Grumman Belgium- Recent Contract Wins
Table 44: Airbus Helicopters- Product focus
Table 45: Airbus Helicopters - Alliances
Table 46: Airbus Helicopters - Recent Contract Wins
List of Figures
Figure 1: Belgian Defense Expenditure (EUR Billion), 2013-2022
Figure 2: Belgian Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Belgian GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Figure 4: Belgian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Belgian Defense Capital Expenditure (EUR Million), 2013-2022
Figure 6: Belgian Defense Capital Expenditure (US$ Million), 2013-2022
Figure 7: Belgian Per Capita Defense Expenditure (US$), 2013-2022
Figure 8: Belgian Homeland Security Budget (EUR Billion),2013-2022
Figure 9: Belgian Homeland Security Budget (US$ Billion), 2013-2022
Figure 10: Terrorism Heat Map, 2017
Figure 11: Terrorism Index, 2017
Figure 12: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Figure 13: Benchmarking with World’s Largest and Top Regional Defense Spenders (US$ Billion), 2017 and 2022
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017
Figure 15: Belgian Multi-role Aircraft Market Size (US$ Million), 2017-2027
Figure 16: Belgian Aircraft MRO Market Size (US$ Million), 2017- 2027
Figure 17: Belgian Transport Aircraft Market Size (US$ Million), 2017- 2027
Figure 18: Belgium Defense Import Trend, 2012-2016 (TIV values in US$ Mn)
Figure 19: Belgium Defense Imports by Country (%), 2012-2016
Figure 20: Belgium Defense Imports by Category (%),2012-2016
Figure 21: Belgium Defense Exports Trend (TIV Values in US$ Mn), 2012-2016
Figure 22: Belgium Defense exports by Country (%), 2012-2016
Figure 23: Belgium Defense Exports by Category (%), 2012-2016
Figure 24: Industry Dynamics Porter’s Five Forces Analysis
Figure 25: Belgium GDP per capita, 2015-2025
Figure 26: Belgium Gross Domestic Product (current US$ Bn), 2015-2025
Figure 27: Belgium Exports of goods and services (current LCU Bn), 2005-2014
Figure 28: Belgium Imports of goods and services (current LCU Bn), 2005-2014
Figure 29: Belgium gross national disposable income (US$ Bn), 2005-2013
Figure 30: Belgium LCU per US$, 2015-2024
Figure 31: Belgium Market Capitalization of listed Companies (US$ Bn), 2005-2012
Figure 32: Belgium Market Capitalization of listed companies as a % of GDP, 2005-2012
Figure 33: Belgium Government cash Surplus/deficit as a % of GDP, 2005-2012
Figure 34: Belgium Goods Exports as a % of GDP, 2005-2014
Figure 35: Belgium Goods Imports as a % of GDP,2005-2014
Figure 36: Belgium Services Imports as a % of GDP, 2005-2014
Figure 37: Belgium Services Exports as a % of GDP, 2005-2014
Figure 38: Belgium Foreign direct investment, net (BoP, current US$ Bn), 2007-2014
Figure 39: Belgium Net foreign direct investment as % of GDP, 2005-2014
Figure 40: Belgium Mining, Manufacturing, Utilities Output (LCU Bn), 2005-2014

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