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

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

Summary

Libyan defense industry, valued at US$2.7 Billion in 2017, is anticipated to record a CAGR of 4.88% over the forecast period, to reach US$3.3 Billion by 2022. Libya is focusing on reconstructing and strengthening its security forces after the 2011 revolution, during which the people successfully overthrew one of the longest dictatorial regimes which spanned over four decades. This has resulted in a substantial increase initially in the military expenditure of the country.

Libya’s domestic defense manufacturing capabilities are still underdeveloped, so the country has to rely mainly on foreign imports. Historically, Russia was the primary supplier of defense equipment to Libya during the Gaddafi government and is further increasing efforts to restore its military ties with the new Libyan government. The country lacks the basic required infrastructure, discouraging any foreign manufacturer from entering the market to establish a military base or joint venture project.

Furthermore, the lack of skilled labor followed by the war and volatile internal security situations could dilute the interest of foreign investors willing to invest in Libya.
One of the major security challenges Libya faces is its 2000km Mediterranean coastline and threats from six African neighboring countries along with organized crime prevalent in the border region. The porousness of Libya’s border and its susceptibility to smuggling along, with the circulation of criminals, led to high spending on the country’s homeland security (HLS). However, current instability in the country due to the absence of a central authority, heavily armed populace, stalled disarmament, civil concerns such as domestic violence, terrorism, illegal immigration, cross-border smuggling, weapons proliferation, kidnappings, assassinations, and bombings, has increased, fuelling expenditure on HLS activities over the forecast period.

In February 2011, the UN Security Council (UNSC) imposed an arms embargo relating to the supply of arms and military equipment to and from Libya in response to the use of weapons by Gaddafi’s military forces on civilian protestors. However, in March 2013, a UN resolution lifted the restriction on the procurement of non-lethal military equipment for humanitarian protective use, and the provision of technical and financial assistance, and training to the Libyan government.

The report “Future of the Libyan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of Libya 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 -
- Libya defense industry market size and drivers: Detailed analysis of Libya 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 Libya 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 Libya 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: Lockheed Martin, Finmeccanica and KBP Instrument Design Bureau.

Scope

- The Libyan defense industry, valued at US$2.7 billion in 2017, is anticipated to record a CAGR of 4.88% over the forecast period, to reach US$3.3 billion by 2022. Libya is focusing on reconstructing and strengthening its security forces after the 2011 revolution, during which the people successfully overthrew one of the longest dictatorial regimes which spanned over four decades. This has resulted in a substantial increase initially in the military expenditure of the country.
- During 2013-2017, revenue expenditure accounted for an average of 82.5% of the total Libyan defense expenditure, and the remaining 17.5% was spent on procuring equipment and services. The implementation of budget cuts and reform measures, such as the suspension of new procurement programs resulted in low defense spending over the historic period. The Libyan MoD is trying to procure multi-role and fighter aircraft transport aircraft helicopters, armored vehicles, transport aircraft, battle tanks, radar and imaging systems, and other advanced equipment, which will result in a significant rise in its defense capital expenditure during 2018-2022.
- The MoD is expected to invest in transport helicopters, personel weapons, and soft body armor.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of Libyan 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 Libya 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
3.1.5. Ongoing procurement programs
3.1.6. Future procurement programs
3.1.7. Social, Political and Economic Environment & Support for Defense Projects
3.1.8. Political & Strategic Alliances
3.1.9. Libyan defense budget anticipated to grow at a CAGR of 4.88% during 2018-2022
3.1.10. Rebuilding of the armed forces and replacing aging military equipment are the major factors driving Libyan defense expenditure
3.2. Analysis of Defense Budget Allocation
3.2.1. The majority of Libya’s defense budget is allocated for revenue expenditure
3.2.2. Capital expenditure expected to increase at a CAGR of 5.60% over 2018-2022
3.2.3. Defense expenditure as a percentage of GDP to increase during the forecast period
3.2.4. Per capita defense expenditure set to increase over the forecast period
3.3. Homeland Security Market Size and Forecast
3.3.1. Political stalemate and increased terrorism, border security, and internal disputes form the main components of homeland security expenditure
3.3.2. Libya considered as highly effected country due to terror activities
3.3.3. Libya faces high level of threat from foreign terrorist organizations
3.3.4. Libya faces significant threat from terrorists
3.4. Benchmarking with Key Global Markets
3.4.1. Libyan defense budget expected to register growth over the period 2016-2020
3.4.2. Libyan defense expenditure is small compared to the leading spenders
3.4.3. Libya spent 5% of its GDP on defense in 2017
3.5. Market Opportunities: Key Trends and Drivers
3.5.1. Transport Helicopters
3.5.2. Personnel Weapons
3.5.3. Soft Armor
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. Russia was the leading supplier of arms to Libya during 2012-2016
4.1.3. Missiles constitute the majority of Libyan arms imports
4.2. Export Market Dynamics
4.2.1. Libyan defense exports market is negligible
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: medium to low
5.1.2. Bargaining power of buyer: medium
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: medium
5.1.5. Threat of substitution: low to medium
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Arms Embargo in Libya
6.1.2. Libya has not disclosed any offset policy
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy & Process
6.2.3. Foreign Military Sale (FMS) is the preferred entry route
6.3. Key Challenges
6.3.1. Underdeveloped domestic industry and internal instability discourages foreign participation
6.3.2. Unemployment and scarcity of skilled labor
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Foreign Companies
7.2.1. Lockheed Martin: overview
7.2.2. Lockheed Martin: products and services
7.2.3. Lockheed Martin: recent announcements and strategic initiatives
7.2.4. Lockheed Martin: alliances
7.2.5. Lockheed Martin: recent contract wins
7.2.6. Finmeccanica: overview
7.2.7. Finmeccanica: products and services
7.2.8. Finmeccanica: recent announcements and strategic initiatives
7.2.9. Finmeccanica: alliances
7.2.10. Finmeccanica: recent contract wins
7.2.11. KBP Instrument Design Bureau - overview
7.2.12. KBP Instrument Design Bureau - major products and services
7.2.13. KBP Instrument Design Bureau - recent announcements and strategic initiatives
7.2.14. KBP Instrument Design Bureau - recent contract wins
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$ Billion)
8.1.3. Exports of Goods and Services (LCU bn)
8.1.4. Imports of Goods and Services (LCU Bn)
8.1.5. LCU per US$ (period average)
8.1.6. Goods exports as a percentage of GDP
8.1.7. Goods imports as a percentage of GDP
8.1.8. Services Imports as a percentage of GDP
8.1.9. Service Exports as a percentage of GDP
8.1.10. Foreign direct investment, net (BoP, current US$ billions)
8.1.11. Foreign direct investment, as Percentage of GDP
8.1.12. Mining, Manufacturing, Utilities Output (US$ billion)
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Army Equipment in Libya
Table 2: Libyan Navy Strength
Table 3: Aircrafts in Libya
Table 4: Libya - Ongoing Procurement Programs
Table 5: Libya - Future Procurement Programs
Table 6: Libyan Defense Expenditure (LYD Billion and US$ Billion), 2013-2022
Table 7: Libyan Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 8: Libyan - Defense Capital Expenditure (LYD Billion and US$ Billion), 2013-2022
Table 9: Libyan - GDP Growth vs Defense Expenditure as a Percentage of GDP, 2013-2022
Table 10: Libyan per capita defense expenditure (US$), 2013-2022
Table 11: Terrorism Index, 2017
Table 12: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022
Table 13: Libyan Budget Formation Timetable:
Table 17: Competitive Landscape of the Libyan Defense Industry
Table 14: Lockheed Martin - product focus
Table 15: Lockheed Martin - Alliances
Table 16: Lockheed Martin - Recent Contract Wins
Table 17: Finmeccanica - Product Focus
Table 18: Finmeccanica - Alliances
Table 19: Finmeccanica- Recent Contract Wins
Table 20: KBP Instrument Design Bureau - Major Products & Services
Table 21: KBP Instrument Design Bureau - recent contract wins
List of Figures
Figure 1: Libyan Defense Expenditure (LYD Billion), 2013-2022
Figure 2: Libyan Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Libyan Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 4: Libyan - Defense Capital Expenditure (LYD Million), 2013-2022
Figure 5: Libyan - Defense Capital Expenditure (US$ Million), 2013-2022
Figure 6: Libyan GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 7: Libyan per capita defense expenditure (US$), 2013-2022
Figure 8: Terrorism Heat Map, 2017
Figure 9: Terrorism Index, 2017
Figure 10: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022
Figure 11: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2017 and 2022
Figure 12: Benchmarking with Large Defense Spenders as % of GDP - 2017
Figure 13: Transport Helicopter Market (US$ Million), 2017-2027
Figure 14: Personal Weapons Market (US$ Million), 2017-2027
Figure 15: Soft Armor Market (US$ Million), 2017-2027
Figure 16: Libyan Defense Imports (US$ million), 2012-2016
Figure 17: Libyan Defense Imports by Country (%), 2012-2016
Figure 18: Libyan Defense Imports by Category, 2012-2016
Figure 19: Industry Dynamics - Porter’s Five Forces Analysis
Figure 20: Libyan GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 21: Libyan GDP at Current Prices (US$ Billion), 2015-2025
Figure 22: Libyan Exports of Goods and Services (LCU Billion), 2005-2014
Figure 23: Libyan Imports of Goods and Services (LCU Bn), 2005-2014
Figure 24: Libya- LCU per US$ (period average), 2015-2024
Figure 25: Libya- Goods exports as a % of GDP (%), 2005-2013
Figure 26: Libya- Goods imports as a % of GDP (%), 2005-2013
Figure 27: Libyan Services Imports as a % of GDP (%), 2005-2013
Figure 28: Libyan Service Exports as a % of GDP (%), 2005-2013
Figure 29: Libya- Foreign direct investment, net (BoP, current US$ billion), 2005-2013
Figure 30: Libya- Foreign direct investment, % GDP, 2005-2013
Figure 31: Libyan Mining, Manufacturing, Utilities Output (LCU billion), 2005-2014

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