Future of the Saudi Arabian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Saudi Arabia is one of the largest defense spenders in the world, behind the US, China, and Russia, with a military budget valued at US$56 billion in 2018. The country is the largest market in the Middle East due to its robust economic and financial position, backed by its oil exports. The rising tension with Iran, aggressive procurement strategies, and modernization programs, along with the need to strengthen its indigenous defense industry, are the main factors boosting the country’s military expenditure.
Saudi Arabia was forced to cut back on defense spending in order to rationalize public expenditure and during 2015 the country’s defense spending declined by -29.6%. Although the country was expected to cut back on defense expenditure for 2016 and 2017, there were no cuts in spending, and during 2016 and 2017 Saudi defense and security expenditure cumulatively amounted to US$81.6 billion.
On the same time, Homeland security is an area that has gained prominence in Saudi Arabia over the last decade, with expenditure expected to increase 8 to US$41.7 billion in 2023 at a CAGR of 8.47%. After the Arab Spring revolution in the Middle Eastern and the North African (MENA) region, and minor protests in Riyadh, the country is expected to increase expenditure to enhance security measures. The spread of the extremist group, ISIS, in neighboring Syria coupled with the Houthi rebellion in adjoining Yemen, has forced Saudi Arabia to invest in securing its borders. As such, Saudi Arabia is investing in high technology border fencing along its boundaries with Iraq and Yemen.
As Saudi Arabia plans to source as much as 50% of its defense equipment from domestic defense companies in future and, in May 2017, the Saudi Arabian Public Investment Fund (PIF) decided to create a national defense industry company - Saudi Arabian Military Industries (SAMI) to cater to its domestic defense requirements. Many major defense companies, such as BAE Systems, EADS, General Dynamics, Thales, SAIC, and Northrop Grumman, have entered the Saudi Arabian defense market by forming alliances and joint ventures with domestic companies.
""Future of the Saudi Arabian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023"", provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.
Key Inclusions of the report are -
- Market opportunity and attractiveness: detailed analysis of the current industry size and growth expectations during 2019-2023, including highlights of the key growth stimulators
- Procurement dynamics: trend analysis of imports and exports, together with their implications and impact on the Vietnamese defense industry
- Industry structure: five forces analysis to identify various power centers in the industry and how these are expected to develop in the future
- Market entry strategy: 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
- Competitive landscape and strategic insights: analysis of the competitive landscape of the defense industry in Vietnam.
- Business environment and country risk: a range of drivers at country level, assessing business environment and country risk.
Companies Mentioned: BAE Systems Plc, Airbus Group, General Dynamics Corporation, Lockheed Martin, Science Applications International Corporation (SAIC), Sikorsky Aircraft Corporation, Thales SA, Boeing, Northrop Grumman Corporation, Advanced Electronics Company (AEC) and Al Salam Aircraft Company
- Saudi Arabia is one of the largest defense spenders in the world, behind the US, China, and Russia, with a military budget valued at US$56 billion in 2018. The country is the largest market in the Middle East due to its robust economic and financial position, backed by its oil exports. The rising tension with Iran, aggressive procurement strategies, and modernization programs, along with the need to strengthen its indigenous defense industry, are the main factors boosting the country’s military expenditure.
- On a cumulative basis, the country is expected to invest US$326.5 billion for defense purposes, of which US$146 billion is earmarked for capital expenditure to fund defense procurements. The government’s well-defined military modernization plans along with its efforts to supress Houthi insurgency in Yemen as well as its support for rebel factions within Syria, are expected to stimulate the expenditure over the next few years
- The MoD is expected to invest in physical security of vital assets, development of land based C4ISR cpaabilities and multi-role aircraft among others.
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Saudi Arabian 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 Saudi Arabian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts