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

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

Summary

Finland is a geo-strategically vital base due to its vicinity to Russia. The political and military development in Russia significantly influences the country’s security. The Baltic Sea is a predominant logistic transport corridor for Finland, and Russia’s rising interests in this area is likely to impact the security of the country. The Finnish annual defense budget stands at US$3 Billion in 2017, and is expected to grow at a CAGR of 1.96% over the forecast period, to reach US$3.3 Billion in 2022.

The country’s capital expenditure is expected to marginally increase from US$0.8 Billion in 2017 to US$0.9 Billion in 2022, registering a CAGR of 2.19% during the forecast period. The Finnish Defence Ministry is expected to procure fighters and multi-role aircraft, Maintenance, Repair and Operations (MRO) for multi-role aircraft, naval vessels MRO, and aircraft simulators. Furthermore, during the forecast period, Finland is expected to allocate as much as 73.4% of its defense budget towards revenue expenditure, which will be used to pay pension allowances to retired military personnel, salaries, training and other administrative activities.

During 2013-2017, Finland’s Homeland Security (HLS) expenditure was driven by the continuing problems of illicit drug trading and human trafficking across its eastern border with Russia, along with cyber-crimes. However, with much of the illegal migration from the Middle Eastern countries now subsiding, the country’s homeland security expenditure is anticipated to marginally decline over the forecast period. The expenditure is anticipated to increase at a CAGR of 11.27% during the forecast period, from US$1.6 Billion in 2017, to an estimated US$2.8 Billion in 2022.

The report “Future of the Finland Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers insights into the market opportunities and entry strategies adopted by foreign OEMs (Original Equipment Manufacturers) to gain a market share in the Finnish defense industry.

In depth this report provides the following analysis -
- Provides detailed analysis of the current industry size and growth expectations during 2018-2022, including highlights of the key growth stimulants. It also benchmarks the industry against key global markets, and provides a detailed understanding of emerging opportunities in specific areas.
- Analysis of imports and exports, together with their implications and impact on the Finnish defense industry.
- Five forces analysis to identify various power centers in the industry, and how these are expected to develop in the future.
- Analysis of possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
- Analysis of the competitive landscape of the defense industry in Finland, providing an overview of key defense companies, (both domestic and foreign), together with insights such as key alliances, strategic initiatives and a brief financial analysis.
- This report covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics and political and social risk.

Companies mentioned in this report: Hanwha Techwin, Babcock International, Lockheed Martin, Boeing, United Shipbuilding Corp., Saab

Scope

- Finland’s total defense expenditure stands at US$3 billion in 2017, and is expected to grow at a CAGR of 1.96% over the forecast period, to reach US$3.3 billion in 2022. Finnish defense expenditure is primarily driven by participation in peacekeeping initiatives, the soldier modernization program and the procurement of advanced technology equipment. Finland is an active participant in the crisis management programs mandated by the United Nations (UN). The Finnish defense industry is expected to focus its expenditure on Leopard 2A6 main battle tanks, multi-role aircraft, cyber security, and C4ISR systems.
- The Finnish Ministry of Defence (MoD) allocated an average of 27.2% to capital expenditure during 2013-2017, and is expected to decrease over the forecast period to reach 26.6%. Currently, due to the austerity measures, the government is focusing on the acquisition of high-quality secondhand equipment to save costs. Its military modernization programs include the procurement of 100 secondhand EX-Danish Leopard 2A6 main battle tanks, air defense missile system, IT Services, C4ISR, soldier combat systems and surveillance system, along with the procurement of littoral ships for the navy and improvements into the coast guard role. Furthermore, under the soldier modernization program, “Warrior 2020”, the army plans to procure communications, automatic mortars, C4I subsystems, lightweight superior ballistic protection and smart munitions systems, in order to create a mobile force. Over 2013-2017, the Finnish defense capital expenditure registered an average of US$0.90 billion. The country’s capital expenditure is expected to marginally increase from US$0.8 billion in 2017 to US$0.9 billion in 2022, registering a CAGR of 2.19% during the forecast period. The Finnish Defence Ministry is expected to procure fighters and multi-role aircraft, Maintenance, Repair and Operations (MRO) for multi-role aircraft, naval vessels MRO, and aircraft simulators.
- The MoD is expected to invest in fighters and Multi-role aircraft, fighters & multi-role aircraft MRO and aircraft simulators.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Finnish 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 Finnish 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 and Strategy
3.1.3 Military Fleet Size
3.2 Procurement Programs
3.2.1 Ongoing procurement programs
3.2.2 Future procurement programs
3.2.3 Social, political and economic environment and support for defense projects
3.2.4 Political and strategic alliances
3.3 Defense Market Size Historical and Forecast
3.3.1 Finnish defense budget to grow at a CAGR of 1.96% during 2018-2022
3.3.2 Modernization programs, international peacekeeping missions, and a perceived security threat from Russia are the main factors driving Finnish defense expenditure
3.4 Analysis of Defense Budget Allocation
3.4.1 Defense expenditure as a percentage of GDP to reach 1.1% by 2022
3.4.2 Revenue expenditure allocation expected to increase during the forecast period
3.4.3 Capital expenditure expected to grow at a CAGR of 2.19% over the forecast period
3.4.4 Per capita defense expenditure expected to increase during the forecast period
3.5 Homeland Security Market Size and Forecast
3.5.1 Homeland security expenditure is expected to grow at a CAGR of 11.27% during the forecast period
3.5.2 Homeland security expenditure in Finland is mainly driven by organized crimes and maritime security threats
3.5.3 Finland considered a moderate risk country for terror activities
3.5.4 Finland faces moderate level of threat from foreign terrorist organizations
3.5.5 Finland faces minimal threat from terrorists
3.6 Benchmarking with Key Global Markets
3.6.1 Finnish defense budget to increase at a CAGR of 1.96% during 2018-2022
3.6.2 Finnish defense expenditure is small compared to the leading spenders
3.6.3 Finland trails European states in defense spending
3.7 Market Opportunities: Key Trends and Drivers
3.7.1 Fighters and Multi-Role Aircraft
3.7.2 Fighters and Multi-Role Aircraft MRO
3.7.3 Aircraft Simulators
4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Defense imports are expected to increase during the forecast period
4.1.2 European countries including Italy, Sweden, and France were the major suppliers to Finland during 2012-2016
4.1.3 Aircraft, missiles and sensors constitute the majority of Finnish arms imports
4.2 Export Market Dynamics
4.2.1 Finnish exports decline over the period 2013-2016
4.2.2 EU countries account for the majority of Finnish defense exports
4.2.3 Armored vehicles are the largest exported defense hardware
5 Industry Dynamics
5.1 Bargaining power of supplier: low to high
5.2 Bargaining power of buyer: high
5.3 Barrier to entry: medium
5.4 Intensity of rivalry: low to high
5.5 Threat of substitution: low to high
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 The government encourages offsets in order to develop a domestic defense industrial base
6.1.2 Finnish defense sector is open to foreign direct investments
6.2 Market Entry Route
6.2.1 Budgeting Process
6.2.2 Procurement Policy and Process
6.2.3 Partnerships with domestic defense firms offer attractive market entry route
6.2.4 Foreign OEMs gain industry access through joint R&D programs
6.2.5 Foreign military sales to Finland
6.2.6 Collaborations provide market entry opportunities
6.3 Key Challenges
6.3.1 The Finnish Government prefers Nordic and European countries for defense trade
6.3.2 Defense budget deficit may lead to a reduction in the overall military budget
7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.2 Key Foreign Companies
7.2.1 Elektrobit Corporation: overview
7.2.2 Elektrobit Corporation: products
7.2.3 Elektrobit Corporation: recent announcements and strategic initiatives
7.2.4 Elektrobit Corporation: alliances
7.2.5 Elektrobit Corporation: recent contract wins
7.2.6 Kiitokori Oy: overview
7.2.7 Kiitokori Oy: products
7.2.8 Kiitokori Oy: recent announcements and strategic initiatives
7.2.9 Millog Oy: overview
7.2.10 Millog Oy: products and services
7.2.11 Millog Oy: recent announcements and strategic initiatives
7.2.12 Millog Oy: alliances
7.2.13 Millog Oy: recent contract wins
7.2.14 Nammo Lapua Oy: overview
7.2.15 Nammo Lapua Oy: products and services
7.2.16 Nammo Lapua Oy: recent announcements and strategic initiatives
7.2.17 Nammo Lapua Oy: recent contract wins
7.2.18 Patria: overview
7.2.19 Patria: products and services
7.2.20 Patria: recent announcements
7.2.21 Patria: Recent Contract Wins
7.2.22 Patria: alliances
7.2.23 Patricomp Oy: overview
7.2.24 Patricomp Oy: products and services
7.2.25 Patricomp Oy: recent announcements and strategic initiatives
7.2.26 Patricomp Oy: recent contract wins
7.2.27 Temet Oy: overview
7.2.28 Temet Oy: products
8 Business Environment and Country Risk
8.1 Economic Performance
8.1.1 GDP per capita at constant prices
8.1.2 GDP at current prices (US$)
8.1.3 Exports of goods and services (current Local Currency Units (LCU) billion)
8.1.4 Imports of goods and services (current LCU billion)
8.1.5 Gross national disposable income (US$ billion)
8.1.6 LCU per US$ (period average)
8.1.7 Market capitalization of listed companies (US$ billion)
8.1.8 Market capitalization of listed companies (% of GDP)
8.1.9 Government cash surplus/deficit as a percentage of GDP (LCU)
8.1.10 Goods exports as a percentage of GDP
8.1.11 Goods imports as a percentage of GDP
8.1.12 Services imports as a percentage of GDP
8.1.13 Service exports as a percentage of GDP
8.1.14 Foreign direct investment, net (Balance of Payments (BoP), current US$ billions)
8.1.15 Net foreign direct investment as % of GDP
8.1.16 Mining, Manufacturing, Utilities Output (LCU billion)
9 Appendix
9.1 Contact Us
9.2 About SDI
9.3 Disclaimer
List of Tables
Table 1: Finnish Army Strength
Table 2: Finnish Navy Strength
Table 3: Finnish Air Force Strength
Table 4: Finnish Ongoing Procurement Programs
Table 5: Finnish Future Procurement Programs
Table 6: Finnish Defense Expenditure (EUR Billion and US$ Billion), 2013-2022
Table 7: Finnish GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 8: Finnish Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 9: Finnish Defense Capital Expenditure (EUR Million and US$ Billion), 2013-2022
Table 10: Finnish Per Capita Defense Expenditure (US$), 2013-2022
Table 11: Finnish Homeland Security Expenditure (EUR Billion and US$ Billion), 2013-2022
Table12: Terrorism Index, 2017
Table 13: Benchmarking with Key Markets: 2013-2017 vs. 2018-2022
Table 14: Offset Regulations in Finland
Table 15: Offset multiplier categories
Table 16: Finnish Budget Formation Timetable:
Table 17: Competitive Landscape in Finnish Defense Market
Table 18: Elektrobit Corporation - Product Focus
Table 19: Elektrobit Corporation - Alliances
Table 20: Elektrobit Corporation - Recent Contract Wins
Table 21: Kiitokori Oy- Product Focus
Table 22: Millog Oy - Product Focus
Table 23: Millog Oy - Alliances
Table 24: Millog Oy - Recent Contract Wins
Table 25: Nammo Lapua Oy - Product Focus
Table 26: Nammo Lapua Oy - Recent Contract Wins
Table 27: Patria - Product Focus
Table 28: Patria- Recent Contract Wins
Table 29: Patria- Alliances
Table 30: Patricomp Oy - Product Focus
Table 31: Patricomp Oy - Recent Contract Wins
Table 32: Temet Oy - Product Focus
List of Figures
Figure 1: Finnish Defense Expenditure (EUR bn), 2013-2022
Figure 2: Finnish Defense Expenditure (US$ bn), 2013-2022
Figure 3: Finnish GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 4: Finnish Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Finnish Capital Budget Allocation (EUR Billion), 2013-2022
Figure 6: Finnish Capital Budget Allocation (US$ Billion), 2013-2022
Figure 7: Finnish Per Capita Defense Expenditure (US$), 2013-2022
Figure 8: Finnish Homeland Security Budget (EUR Billion), 2013-2022
Figure 9: Finnish Homeland Security Budget (US$ 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 Defense Spenders (US$ Billion), 2017-2022
Figure 14: Benchmarking with Large Defense Spenders as % of GDP - 2017
Figure 15: Fighters and Multi-Role Aircraft (US$ Million), 2017-2027
Figure 16: Fighters and Multi-Role Aircraft MRO (US$ Million), 2017-2027
Figure 17: Aircraft Simulation Systems (US$ Million), 2017-2027
Figure 18: Finnish Defense Imports (US$ million), 2012-2016
Figure 19: Finnish Defense Imports by Country (%), 2012-2016
Figure 20: Finnish Defense Imports by Category, 2012-2016
Figure 21: Finnish Defense Export Trend (US$ Million), 2012-2016
Figure 22: Finnish Defense Exports by Country (%), 2012-2016
Figure 23: Finnish Defense Exports by Category, 2012-2016
Figure 24: Industry Dynamics - Porter’s Five Forces Analysis
Figure 25: Finnish GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 26: Finnish GDP at Current Prices (US$ Billion), 2015-2025
Figure 27: Finnish Exports of Goods and Services (LCU Billion), 2005-2014
Figure 28: Finnish Imports of Goods and Services (LCU Billion), 2005-2014
Figure 29: Finnish Gross National Disposable Income (US$ Billion), 2005-2013
Figure 30: Finland LCU per US$, 2015-2024
Figure 31: Finnish Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 32: Finnish Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 33: Finnish Government Cash Surplus/Deficit as % of GDP (LCU), 2005-2012
Figure 34: Finland - Goods Exports as a % of GDP (%), 2005-2013
Figure 35: Finland- Goods Imports as a % of GDP (%), 2005-2013
Figure 36: Finnish Services Imports as a % of GDP (%), 2005-2013
Figure 37: Finnish Service Exports as a % of GDP (%), 2005-2013
Figure 38: Finland - Foreign Direct Investment, net (BoP, current US$ billion), 2005-2013
Figure 39: Finland- Net Foreign Direct Investment as a % of GDP, 2005-2013
Figure 40: Finnish Mining, Manufacturing, Utilities Output (LCU billion), 2005-2014

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