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Future of the Egyptian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020

Future of the Egyptian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020

Summary

The Egyptian defense market will be driven by threats from Israel and Ethiopia, modernization of the armed forces, maritime security and the ongoing volatile political scenario. In addition, the capital expenditure allocation is anticipated to average 16.8% of the total defense budget during 2016–2020 and defense equipment procurements are expected to be in the areas of fighters and multi-role aircraft, diesel electrical submarines and corvettes.

Key Findings

During 2011–2015, Egyptian defense expenditure registered a growth rate of 6.11%, increasing from US$4.4 billion in 2011 to US$5.6 billion in 2015

Military expenditure is anticipated to register a CAGR of 5.27% during 2016–2020, to value US$7.3 billion in 2020

Lack of transparency, corruption, political uncertainty and internal instability impose challenges for the Egyptian defense market

Demand for equipment is mainly expected to revolve around fighters and multi-role aircraft, diesel electric submarines, and corvettes during 2016–2020

Synopsis

Strategic Defence Intelligence’s report - Future of the Egyptian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020 offers detailed analysis of the industry with market size forecasts from 2016–2020. This report will also analyze factors that influence demand in the industry, key market trends, and challenges faced by industry participants. In particular, it provides an in-depth analysis of the following:

Defense industry market size and drivers: detailed analysis of the defense industry during 2016–2020, including highlights of the demand drivers and growth stimulators. 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 the army, navy, and air force. It also details the key challenges faced by defense market participants within the country

Porter’s Five Force analysis of the defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, 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 from 2015 to 2025

Competitive landscape and strategic insights: including an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Reasons To Buy

Identify and track the global defense market and make regional comparisons to effectively target new revenue streams

Understand the importance of being led by the defense ministries in the military procurement market and define your strategies with insight on what your customers really want by analyzing recent orders, technical specifications, and the country’s expected investment pattern during 2016–2020

Make correct business decisions based on detailed analysis of the defense industry from 2016–2020,which includes the total competitive landscape of the sector with detailed profiles of the top domestic and foreign defense manufacturers along with information about their products, alliances, recent contract wins, and financial analysis

Determine prospective investment areas by gaining an in-depth understanding of the industry in terms of market opportunities Channel resources by identifying various military requirements that are expected to generate revenues across different sectors during 2016–2020


1 Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. SDI Terrorism Index
1.5. About Strategic Defence Intelligence
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1. Defense Market Size Historical and Forecast
3.1.1. Egyptian defense expenditure expected to cumulatively value US$32.9 billion over the forecast period
3.1.2. Perceived threats, military modernization, a strained relationship with Ethiopia, peacekeeping operations, and domestic turbulence expected to drive the country's defense expenditure
3.1.3. Defense expenditure as a percentage of GDP is expected to decline during 2016-2020
3.2. Analysis of Defense Budget Allocation
3.2.1. Capital expenditure allocation is expected to increase over the forecast period
3.2.2. Egypt to allocate US$9.0 billion cumulatively towards defense capital expenditure over the forecast period
3.2.3. Per capita defense expenditure to increase over the forecast period
3.3. Benchmarking with Key Global Markets
3.3.1. Egyptian defense expenditure expected to grow at a faster pace during 2016-2020
3.3.2. Egypt has a relatively small defense budget
3.3.3. Egypt allocates 1.9% of its GDP for defense
3.3.4. Egypt faces a substantial threat from foreign terrorist organizations
3.3.5. Egypt experienced high terror activity during the historic period
3.4. Market Opportunities: Key Trends and Growth Stimulators
3.4.1. Fighters & Multi-role Aircraft
3.4.2. Diesel Electric Submarines
3.4.3. Corvettes
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports driven by regional security dynamics
4.1.2. The US was the leading supplier of arms to Egypt in the historic period
4.1.3. Aircraft and air defense systems dominate defense imports
4.2. Export Market Dynamics
4.2.1. Defense exports from Egypt negligible during the historic period
5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: High
5.1.2. Bargaining power of buyer: Low
5.1.3. Barrier to entry: medium to high
5.1.4. Intensity of rivalry: low to medium
5.1.5. Threat of substitution: medium
6 Market Entry Strategy
6.1. Market Regulation
6.1.1. Egypt has not disclosed any offset obligation
6.1.2. Defense procurements lack legitimate procurement laws
6.2. Market Entry Route
6.2.1. Government-to-government agreements are the preferred market entry route for foreign OEMs
6.2.2. Technology transfer and license manufacturing agreements provides an attractive market entry route
6.3. Key Challenges
6.3.1. Lack of transparency and corruption in Egyptian
defense establishment
6.3.2. Political uncertainty and internal instability discourages foreign participation
6.3.3. Stalled EU military aid may affect the defense industry
7 Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. Egyptian Defense Industry is predominantly state-run
7.2. Key Domestic Companies
7.2.1. Abu Zaabal Tank Repair Factory: overview
7.2.2. Abu Zaabal Tank Repair Factory: products and services
7.2.3. Abu Zaabal Tank Repair Factory: recent announcements and strategic initiatives
7.2.4. Arab Organization for Industrialization-Engine Factory: overview
7.2.5. Arab Organization for Industrialization-Engine Factory: products and services
7.2.6. Arab Organization for Industrialization-Aircraft Factory: overview
7.2.7. Arab Organization for Industrialization-Aircraft Factory: products and services
7.2.8. Arab Organization for Industrialization-Sakr Factory: overview
7.2.9. Arab Organization for Industrialization- Sakr Factory: products and services
7.2.10. Arab Organization for Industrialization-Kader Factory: overview
7.2.11. Arab Organization for Industrialization-Kader Factory: products and services
7.2.12. Arab Organization for Industrialization-Electronics Factory: overview
7.2.13. Arab Organization for Industrialization-Electronics Factory: products and services
7.2.14. Arab British Dynamic Company: overview
7.2.15. Arab British Dynamics Company: products and services
7.2.16. Helwan Factory for Developed Industries: overview
7.2.17. Helwan Factory for Developed Industries: products and services
8 Business Environment and Country Risk
8.1. Demographics & Social Statistics
8.1.1. Population - Rural
8.1.2. Population - Urban
8.2. Economic Performance
8.2.1. Gross Domestic Product per Capita
8.2.2. Gross Domestic Product (current US$ billion)
8.2.3. Exports of Goods & Services
8.2.4. Imports of Goods & Services
8.2.5. Gross National Disposable Income
8.2.6. Manufacturing Output (US$ Billion)
8.2.7. Consumer Price Index
8.2.8. Wholesale Price Index
8.2.9. LCU per USD (period average)
8.2.10. LCU per EUR (period average)
8.2.11. Lending Rate
8.2.12. Deposit Rate
8.2.13. Real Interest Rate (%)
8.2.14. Market Capitalization of Listed Companies (US$ Bn)
8.2.15. Market capitalization of listed companies (% of GDP)
8.2.16. Total Government cash surplus/deficit (LCU Bn)
8.2.17. Government cash surplus/deficit as % of GDP (LCU)
8.2.18. International reserves, including gold (USD Bn)
8.3. Energy and Utilities
8.3.1. Total Conventional Thermal Electricity Net Generation (Billion Kilowatt hours)
8.3.2. Hydroelectricity Net Generation (Billion Kilowatt hours)
8.3.3. Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts)
8.3.4. Proved Reserves of Natural Gas (Trillion Cubic Feet)
8.3.5. Total Petroleum Consumption (Thousand Barrels Per Day)
8.3.6. Crude Oil Proved Reserves (Billion Barrels)
8.4. Infrastructure Quality and Availability
8.4.1. Rail lines (total route-km)
8.4.2. Air transport, freight (million ton-km)
8.4.3. Overall construction
8.5. Mineral
8.5.1. Mining, Manufacturing, Utilities Output (US$ Bn)
8.6. Technology
8.6.1. Patents Granted
8.7. Telecommunication
8.7.1. Telephone lines (In Mn)
8.7.2. Telephone lines Penetration Rate (per 100 people)
9 Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Egyptian Defense Expenditure (US$ Billion), 2011–2015
Table 2: Egyptian Defense Expenditure (US$ Billion), 2016–2020
Table 3: Egyptian Defense Expenditure (in EGP billion), 2011–2015
Table 4: Egyptian Defense Expenditure (in EGP billion), 2016–2020
Table 5: Egypt’s GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2011–2015
Table 6: Egypt’s GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2016–2020
Table 7: Egyptian Defense Budget Allocation for Capital and Revenue Expenditure (%), 2011–2015
Table 8: Egyptian Defense Budget Allocation for Capital and Revenue Expenditure (%), 2016–2020
Table 9: Egypt’s Capital Expenditure Split by Allocated Capital Expenditure and US FMF (US$ Billion), 2011–2015
Table 10: Egypt’s Capital Expenditure Split by Allocated Capital Expenditure and US FMF (US$ Billion), 2016–2020
Table 11: Egyptian Defense Expenditure as Per-Capita Defense Spend (US$), 2011–2015
Table 12: Egyptian Defense Expenditure as Per-Capita Defense Spend (US$), 2016–2020
Table 13: Benchmarking with Key Markets, 2011–2015 vs. 2016–2020
Table 14: SDI Intelligence Terrorism Index
Table 15: Abu Zaabal Tank Repair Factory – Product Focus
Table 16: Arab Organization for Industrialization-Engine Factory – Product Focus
Table 17: Arab Organization for Industrialization-Aircraft Factory – Product Focus
Table 18: Arab Organization for Industrialization-Sakr Factory – Product Focus
Table 19: Arab Organization for Industrialization-Kader Factory – Product Focus
Table 20: Arab Organization for Industrialization-Electronics Factory – Product Focus
Table 21: Arab British Dynamics Company – Product Focus
Table 22: Helwan Factory for Developed Industries– Product Focus
List of Figures
Figure 1: Egyptian Defense Expenditure (US$ Billion), 2011–2015
Figure 2: Egyptian Defense Expenditure (US$ Billion), 2016–2020
Figure 3: Egyptian Defense Expenditure (in EGP billion), 2011–2015
Figure 4: Egyptian Defense Expenditure (in EGP billion), 2016–2020
Figure 5: Egypt’s GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2011–2015
Figure 6: Egypt’s GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2016–2020
Figure 7: Egyptian Defense Budget Allocation for Capital and Revenue Expenditure (%), 2011–2015
Figure 8: Egyptian Defense Budget Allocation for Capital and Revenue Expenditure (%), 2016–2020
Figure 9: Egypt’s Capital Expenditure Split by Allocated Capital Expenditure and US FMF (US$ Billion), 2011–2015
Figure 10: Egypt’s Capital Expenditure Split by Allocated Capital Expenditure and US FMF (US$ Billion), 2016–2020
Figure 11: Egyptian Defense Expenditure as Per-Capita Defense Spend (US$), 2011–2015
Figure 12: Egyptian Defense Expenditure as Per-Capita Defense Spend (US$), 2016–2020
Figure 13: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020
Figure 14: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2015 and 2020
Figure 15: Countries with the Largest Defense Expenditure as a Percentage of GDP (%), 2015
Figure 16: SDI Terrorism Heat Map, 2015
Figure 17: SDI Terrorism Index, 2015
Figure 18: Fighters & Multi-role Aircraft Market Size (US$ Million), 2015–2015
Figure 19: Diesel Electric Submarines Market Size (US$ Million), 2015–2025
Figure 20: Corvettes (US$ Million), 2015–2025
Figure 21: Egyptian Defense Import Trend, 2010–2014 (TIV values)
Figure 22: Egyptian Defense Imports by Country (%), 2010–2014
Figure 23: Egyptian Imports by Weapons Type (%), 2010–2014
Figure 24: Egyptian Defense Industry Dynamics
Figure 25: Egyptian Population – Rural (In Millions), 2016–2025
Figure 26: Egyptian Population – Urban (In Millions), 2016–2025
Figure 27: Egyptian GDP per Capita (In US$), 2016–2025
Figure 28: Egyptian GDP, (Current Prices US$ (In Billions), 2016–2025
Figure 29: Egyptian Exports of Goods & Services (current prices, US$ Billion), 2004–2013
Figure 30: Egyptian Imports of Goods & Services (current prices, US$ Billion), 2004–2013
Figure 31: Egyptian Gross National Disposable Income (US$ Billion), 2002–2011
Figure 32: Egyptian Manufacturing Output (US$ Billion), 2003–2012
Figure 33: Egyptian Consumer Price Index, 2016–2025
Figure 34: Egyptian Wholesale Price Index, 2003–2012
Figure 35: Egyptian LCU per USD (period average), 2016–2025
Figure 36: Egyptian LCU per EUR (period average), 2016–2025
Figure 37: Egyptian Lending Rate (%), 2003–2012
Figure 38: Egyptian Deposit Rate (%), 2003–2012
Figure 39: Egyptian Real Interest Rate (%), 2003–2012
Figure 40: Egyptian Market Capitalization of Listed Companies (US$ Billion), 2003–2012
Figure 41: Egyptian Market capitalization of listed companies (% of GDP), 2003–2012
Figure 42: Egyptian Total Government cash surplus/deficit (LCU Bn), 2003–2012
Figure 43: Egyptian Government cash surplus/deficit as % of GDP (LCU), 2002–2011
Figure 44:International reserves, including gold (USD Bn), 2003–2012
Figure 45: Egyptian Total Conventional Thermal Electricity Net Generation (Billion Kilowatt hours), 2002–2011
Figure 46: Egyptian Hydroelectricity Net Generation (Billion Kilowatt hours), 2003–2012
Figure 47: Egyptian Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts), 2001–2010
Figure 48: Proved Reserves of Natural Gas (Trillion Cubic Feet), 2005–2014
Figure 49: Egyptian Total Petroleum Consumption (Thousand Barrels Per Day), 2003–2012
Figure 50: Egyptian Crude Oil Proved Reserves (Billion Barrels), 2005–2014
Figure 51: Egyptian Rail lines (total route-km), 2003–2012
Figure 52: Egyptian Air transport, freight (million ton-km), 2003–2012
Figure 53: Egyptian Overall construction (US$ Billion), 2006–2014
Figure 54: Egyptian Mining, Manufacturing, Utilities Output (US$ Bn), 2003–2012
Figure 55: Egyptian Patents Granted, 2004–2013
Figure 56: Telephone lines (In Mn), 2003–2012
Figure 57: Egyptian Telephone lines Penetration Rate (per 100 people), 2003–2012

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