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

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

Summary

Myanmar defense budget is valued at US$2.4 Billion in 2017, and registered a CAGR of 0.05% during the historic period. The country is currently in the midst of a political transformation as historically; Myanmar was ruled by the army but is now being run by a civilian government. Moreover, the country’s involvement in the longest lasting civil war and ethnic conflicts along with its increasing capital expenditure on modernization of the Myanmar Navy is expected to drive the country’s defense expenditure during the forecast period.

Myanmar defense industrial base is relatively underdeveloped and, as a result, the country is largely dependent on foreign suppliers to fulfill its military needs. The country’s under-developed indigenous defense manufacturing is reliant on foreign technology transfers, mainly from China, Russia and more recently from India. Myanmar does not export any arms to foreign countries, as its domestic defense industry is still in a nascent stage, and this is expected to remain so over the forecast period.

China and Russia have consistently been the largest suppliers of arms to Myanmar over the last decade and constituted 89% of the total Myanmar defense industry during 2012-2016. China emerged as the largest supplier of defense equipment, accounting for 70% of the country’s total defense imports, followed by Russia with 19% during 2012–2016.

Being under an autocratic army rule for almost half a century, Myanmar has recently elected its first civilian-led government. However, the defense sector is still closed to any form of foreign direct investment (FDI), with direct government-to-government contracts and military-co-operations being the preferred mode of entry. Moreover, even though the country’s defense market presents opportunities for foreign suppliers, the budget allocation for capital procurements is much lower compared to its neighbors and other South East Asian countries.

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

In particular, this report provides an in-depth analysis of the following -
- The Myanmar defense industry market size and drivers: Detailed analysis of the Myanmar 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 Myanmar 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: Myanmar Defense Industries (DI)

Scope

- The Myanmar’s defense budget values US$2.15 billion in 2017, and registered a CAGR of 0.76% during the historic period. The urgent need to modernize the country’s defense arsenal, especially in the wake of the current European migration crisis and Russia military aggression in Ukraine has woken the concerned authorities to the possibility of an armed conflict in Europe. Coupled with the country’s participation in peacekeeping operations and counter terrorism, this has driven the Myanmar defense expenditure during the historic period.
- The capital expenditure allocation, which declined at an average of -5.2% during the historic period, is expected to increase significantly by an average of 12.4% during the forecast period. Key opportunities for equipment suppliers are expected in sectors such as military radar, transport aircraft, infantry vehicles, and military helicopters.
- The MoD expected to invets in ammunition, weaponry, and equipment including new types of armament, new multi-role helicopters, infantry fighting vehicles, and air defense systems

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Myanmar 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 Myanmar 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. 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. Myanmar defense expenditure is expected to grow at CAGR of 4.84% over 2018-2022
3.2.2. Modernization of Myanmar Navy, an ongoing insurgencies and ethnic conflicts expected to drive defense expenditure over the forecast period
3.2.3. Myanmar’s defense expenditure as a percentage of GDP expected to decrease marginally over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Share of capital & revenue expenditure is anticipated to remain steady over forecast period
3.3.2. Capital expenditure expected to increase at CAGR of 5.25% over the forecast period
3.3.3. Myanmar to spend US$1.66 billion cumulatively on revenue expenditure over the forecast period
3.3.4. Per capita defense expenditure set to increase over the forecast period
3.3.5. Myanmar faces significant risk from insurgent groups and ethnic conflicts
3.3.6. Myanmar falls under “highly affected” terrorism category
3.3.7. Myanmar has a terrorism index score of “4.2”
3.4. Benchmarking with Key Global Markets
3.4.1. Myanmar’s defense budget expected to grow at a slower rate than its neighbors over the forecast period ……………………………………………………………………………………………………………………
3.4.2. Myanmarese defense expenditure is low compared to other Asian countries
3.4.3. Myanmar allocates a higher share of GDP for defense compared to other Asian Countries
3.5. Market Opportunities: Key Trends and Growth Stimulators
3.5.1. Submarines
3.5.2. Multi-role Aircraft
3.5.3. Corvette
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. China and Russia emerged as the largest suppliers of arms
4.1.3. Armoured vehicles and aircraft dominate military hardware imports
4.2. Export Market Dynamics
4.2.1. Myanmar’s domestic defense manufacturing is still in a nascent stage
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: high
5.1.4. Intensity of rivalry: low to medium
5.1.5. Threat of substitution: low to medium
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Myanmar currently does not permit investment in the defense industry
6.2. Market Entry Route
6.2.1. Budget process
6.2.2. Procurement Policy & Process
6.2.3. Government-to-government contracts are the preferred market entry route for equipment manufacturers
6.2.4. Closer military co-operation provides opportunity to enter into defense market
6.3. Key Challenges
6.3.1. A closed economy discourages related investment and market growth
6.3.2. Limited defense budget discourages investors from market entry
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Company
7.2.1. Myanmar Defense Industries (KaPaSa Industries): overview
7.2.2. Myanmar Defense Industries: products and services
7.2.3. Myanmar Defense Industries: recent announcements and strategic initiatives
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. Gross National disposable income (USD Billion)
8.1.4. Local Currency Unit per US Dollar
8.1.5. Goods exports as a percentage of GDP
8.1.6. Goods imports as a percentage of GDP
8.1.7. Service Imports as a percentage of GDP
8.1.8. Service exports as a percentage of GDP
8.1.9. Net Foreign direct investment (BoP, current US$ Bn)
8.1.10. Net foreign direct investment as % of GDP
8.1.11. Mining, Manufacturing, Utilities Output (LCU Billion)
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: Myanmar Land Forces Strength
Table 2: Myanmar Navy Strength
Table 3: Myanmar Air Force Strength
Table 4: Myanmar Ongoing Procurement Programs
Table 5: Myanmar Future Procurement Programs
Table 6: Myanmar Defense Expenditure (MMK billion& US$ billion), 2013-2022
Table 7: Myanmar GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2013-2022
Table 8: Myanmar Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 9: Myanmar Defense Capital Expenditure (MMK Billion & US$ Billion), 2013-2022
Table 10: Myanmar Defense Revenue Expenditure (MMK Billion & US$ Billion), 2013-2022
Table 11: Myanmar Per-Capita Defense Expenditure (US$), 2013-2022
Table 12: Terrorism Index, 2017
Table 13: Benchmarking with Key Markets - 2013-2017vs. 2018-2022
Table 14: State/Region Budget Preparation Process
Table 15: Parliament budget reviewing process
Table 16: Myanmar Defense Industries - Product focus
List of Figures
Figure 1: Myanmar Defense Expenditure (MMK Billion), 2013-2022
Figure 2: Myanmar Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Myanmar GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 4: Myanmar Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Myanmar Defense Capital Expenditure (MMK Billion), 2013-2022
Figure 6: Myanmar Defense Capital Expenditure (US$ Billion), 2013-2022
Figure 7: Myanmar Defense Revenue Expenditure (MMK Billion), 2013-2022
Figure 8: Myanmar Defense Revenue Expenditure (US$ Billion), 2013-2022
Figure 9: Myanmar Per-Capita Expenditure (US$), 2013-2022
Figure 10: Terrorism Heat Map, 2017
Figure 11: Terrorism Index, 2017
Figure 12: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 and 2022
Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%),2017
Figure 15: Submarines Market Size (US$ Million), 2017-2027
Figure 16: Multi-role Aircraft Market Size (US$ Million), 2017-2027
Figure 17: Corvette Market Size (US$ Million), 2017-2021
Figure 18: Myanmar Defense Imports (US$ Million), 2012-2016
Figure 19: Myanmar Defense Imports by Country (%), 2012-2016
Figure 20: Myanmar Defense Imports by Weapon Category (%), 2012-2016
Figure 21: Industry Dynamics Porter’s Five Forces Analysis
Figure 22: Myanmar GDP Per Capita, 2015-2025
Figure 23: Myanmar GDP, Current Prices (In US$ Billions), 2015-2025
Figure 24: Myanmar Gross Domestic Product (current US$ Bn), 2005-2013
Figure 25: Local Currency Unit per US$- Exchange Rate , 2015-2024
Figure 26: Myanmar Goods Exports as a percentage of GDP, 2005-2013
Figure 27: Myanmar Goods Imports as a percentage of GDP, 2005-2013
Figure 28: Myanmar Service Imports as a percentage of GDP, 2005-2013
Figure 29: Myanmar Service exports as a percentage of GDP, 2005-2013
Figure 30: Myanmar Foreign Direct Investment, Net (current US$ BN), 2005-2013
Figure 31: Myanmar Net foreign direct investment as % of GDP, 2005-2013
Figure 32: Myanmar Mining, Manufacturing, Utilities Output(US$ Bn), 2005-2014

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