Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape, and Forecasts to 2022
Peru’s defense budget values at around US$2.3 Billion in 2017 and registered a CAGR of -0.16% during the historic period. The persistent threat from insurgent guerrilla organization ‘the Shining Path group’, border conflicts with Chile, active participation in peacekeeping missions, narco-terrorism, defense sector reforms, and modernization initiatives drove defense expenditure over the historic period. With this trend expected to continue over the forecast period, the country’s defense expenditure is anticipated to be valued at around US$2.7 Billion in 2022, registering a CAGR of over 2% over the forecast period.
Peruvian homeland security (HLS) expenditure stands at around US$3.4 Billion in 2018 and is expected to grow at a CAGR of over 7% over the forecast period to cross US$4.5 Billion in 2022. It will be driven by police reforms and modernization, as well as the need to curb cocaine trafficking and organized crime. With the aim of combating narco-terrorism, budgetary allocations are being made for the purchase of patrol vehicles, helicopters, anti-riot gear, anti-riot vehicles, and digital communication equipment.
Between 2012 and 2016, Russia emerged as the largest supplier of military hardware to Peru, with a share of over 27% of total defense imports, followed by South Korea and the Netherlands with shares of around 21% and 11% respectively. Aircraft accounted for the majority of defense imports with a share of over 50% during the historic period. As Peru plans to increase its defense budget and procure more weapons to increase its military base and counter the Shining Path group, imports are expected to increase during the forecast period.
Peru’s domestic defense industry is still undeveloped; therefore, the country did not export any arms during the historic period. However, the Ministry of Defense (MoD) has recently expressed that it wants to strengthen its arms manufacturing capacity, starting with the production of naval units in its three hubs at Callao, Chimbote, and Iquitos. Peru also plans to start co-manufacturing air force planes in the forecast period.
The report ""Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape, and Forecasts to 2022"" offers detailed analysis of the Peruvian 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, this report provides the following -
- The Peruvian defense industry market size and drivers: Detailed analysis of the Peruvian 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 with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country.
- Porter’s Five Force analysis of the Peruvian 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 the Peruvian 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: Los Servicios Industriales de la Marina (SIMA), The Army Ammunition Factory and Desarrollos Industriales Casanave
- Peru’s defense budget values US$2.3 billion in 2017 and registered a CAGR of -0.16% during the historic period. The persistent threat from insurgent guerrilla organization ‘the Shining Path group’, border conflicts with Chile, active participation in peacekeeping missions, narco-terrorism, defense sector reforms, and modernization initiatives drove defense expenditure over the historic period.
- The capital expenditure allocation, which stood at an average of 18.3% during 2013-2017, is anticipated to increase to an average of 27.5% during the forecast period. This increase is primarily due to the fact that Peru has already signed several deals for the procurement of advanced defense equipment and undertaken steps to increase the capabilities of the country’s indigenous defense industry.
Procurements that are expected to account for capital expenditure over the forecast period include frigates, multirole aircraft, submarines, and main battle tanks (MBTs).
- The MoD is expected to invest in frigates, multirole aircraft, submarines, and main battle tanks (MBTs).
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Peruvian 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 Peruvian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts