The Future of the Russian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022
Russian military expenditure values US$48.7 Billion in 2017 and registered a CAGR of -7.40% during 2013-2017. Russian defense modernization has traditionally been funded by booming oil and gas profits; however the crash in the global energy market has resulted in erosion in the country’s revenues and as such has forced the country to adopt austerity measures to cut down on government expenditure. The problem is further compounded by the on-going sanctions on Russia, which have forced the country to rationalize its expenditure and prioritize investments.
Russian homeland security (HLS) expenditure recorded a CAGR of -16.80% during the historic period. However, it is estimated to record a CAGR of 5.39% during the forecast period to 2022. This expenditure is primarily driven by the need to protect the country from cyber threats, and to strengthen its border protection, by investing in surveillance and intelligence technologies such as electronic identification documents, automated border crossing systems, and CCTV (closed circuit television) systems.
Aircraft accounted for the largest share of imports during 2012-2016, with Ukraine being the biggest supplier. The country acquired Antonov An-148 aircraft in 2013, Mi-28N helicopters and Mi-35M helicopters, Su-27SM3, Su-34, Yak-130, and Su-35S aircraft during 2012-2016, and the other significant import partners include Italy, the Czech Republic, Turkey, and France. However, the sanctions placed on Russian entities, owing to its involvement in the Ukrainian civil war have effectively ceased any further supplies to the Russian arms industry, except Turkey, none of the other European defense trade partners have supplied any major defense equipment to the country since 2014.
Russian weapons and equipment are also in high demand internationally, due to affordability and performance standards. India, Vietnam and China are Russia’s biggest defense export consumers, but have reduced procurements over the last couple of years; as a result the Russian Government is now focused on expanding its export market to countries in South America and Africa. Other major consumers of Russia’s military goods include Algeria, Venezuela, Azerbaijan, and Iraq.
The report “The Future of the Russian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Russian 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 -
- The Russian defense industry market size and drivers: detailed analysis of the Russian 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 Russian 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 Russian 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: United Aircraft Corporation (UAC), Sukhoi, Splav, Tactical Missiles Corporation, Almaz-Antey, KBP Instrument Design Bureau, V.A.Degtyarev Plant, Kurganmashzavod, Uralvagonzavod, Izhevsk Mechanical Works (IZHMASH), Irkut Corporation, Oboronprom Corporation
- Russia’s defense expenditure in 2017 values US$48.7 billion, recording a CAGR of -7.40% during the historic period, and it is expected to cumulatively value US$270.8 billion over the forecast period. Russia has the world’s longest land border, which it shares with 16 other countries, along with maritime borders with Japan, via the sea of Okhotsk, and the US state of Alaska, across the Bering Strait. The country places the utmost importance on the protection of its borders and critical infrastructure, which covers a large geographical area that is rich in natural resources.
- During the historic period, the Russian Government allocated an average of 47.1% of its total defense budget to capital expenditure and the remaining 52.9% to revenue expenditure. Capital expenditure is expected to decrease during the forecast period to an average of 40.2%, due to the Russian Ministry of Finance setting a target of cutting defense spending by 12% by 2018.
- The MoD is expected to invest in space based ISR, transport aircraft, and multi-role aircraft.
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Russian 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 Russian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts