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

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

Summary

UAE is a Middle Eastern country located on the South East end of the Arabian Peninsula of the Persian Gulf with vast oil & gas reserves. Over the last few decades, the country has experienced robust growth due to booming oil & gas exports. However, over the last few years the country has chosen to diversify its economy and is fast emerging as a vital trading and financial hub in the Middle East.

Between 2013 and 2017, the UAE’s annual defense expenditure stood at an average of US$23.4 Billion per year and this is expected to increase to an average of US$35 Billion over the forecast period. On a cumulative basis, the country is expected to invest around US$174 Billion for defence purposes, of which around US$66 Billion is earmarked for capital expenditure to fund defense procurement.

The US is the largest supplier of arms to the UAE, accounting for over 62% of the country’s arms imports during 2012–2016. In return for highly sophisticated defense systems, the UAE allows the US to use its ports as a base for its military operations in the Gulf. However, in an effort to reduce its dependence on a single supplier and diversify its defense systems, the UAE has also increased its purchases from France, Italy, Spain, Turkey, Sweden and Russia among others. Russia also shares a burgeoning strategic relationship with the UAE and has emerged as a major supplier, accounting for around 2.5% of the UAE’s arms imports between 2012 and 2016.

The report ""Future of the UAE Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022"" offers detailed analysis of the UAE 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 UAE defense industry market size and drivers: Detailed analysis of the UAE 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 UAE 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 UAE 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: Abu Dhabi Ship Building, Gulf Logistics and Naval Support, Abu Dhabi Systems Integration (ADSI), Lockheed Martin, BAE Systems, Raytheon, Rollys-Royce, Northrop Grumman Corporation, Thales, The Boeing Company

Scope

- Between 2013 and 2017, the UAE’s defense expenditure grew significantly, making it one of the most sought-after markets for foreign defense OEMs. The multitude of deals signed with foreign OEMs at its biennial international defense exhibitions, proves the attractiveness of the UAE’s defense market. The UAE’s defense budget recorded a CAGR of 1.94% over the historic period, with expenditure driven by defense modernization programs, the protection of infrastructure, territorial disputes, and participation in peacekeeping initiatives.
- The UAE faces serious constraints with respect to a limited pool of trained manpower and still has a relatively nascent domestic defense industrial infrastructure. This forces the country to import technologically superior, high-tech defense equipment from suppliers abroad. Over the forecast period, attractive opportunities are expected to emerge in aerial platforms, missiles, naval platforms, and surveillance areas. The country is also expected to invest in reconnaissance, space, cyber security, border control, and digital warfare initiatives.
- The average capital expenditure allocation of the total UAE defense budget during the forecast period is anticipated to reach 37.8% from 35.2% in the historic period. The substantial increase in the capital expenditure percentage is a result of UAE’s focus on modernizing its armed forces. During the forecasted period, the country is expected to invest in the procurement of multi-role aircraft, attack helicopters, armored vehicles, and cyber security capabilities.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the UAE 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 UAE 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 and Support for Defense Projects
3.1.6. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. UAE defense budget to record a CAGR of 11.25% over the forecast period
3.2.2. Military modernization initiatives, territorial dispute with Iran, and peace keeping missions to drive defense expenditure
3.2.3. The defense budget as a percentage of GDP is expected to increase during the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Procurement of advanced equipment to drive capital expenditure allocation during the forecast period
3.3.2. Capital expenditure is expected to grow at a CAGR of 12.28% over the forecast period
3.3.3. Per capita defense expenditure expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. UAE homeland security is expected to increase at a CAGR of 4.44% over the forecast period
3.4.2. Investment in the protection of infrastructure and cyber security are expected to drive the UAE homeland security market
3.4.3. UAE falls under “some risk” category on the Terrorism Index
3.4.4. UAE faces “some risk” by acts of terrorism
3.4.5. UAE has a terrorism index score of 0.4
3.5. Benchmarking with Key Global Markets
3.5.1. UAE defense budget expected to register rapid growth over the period 2018-2022
3.5.2. UAE defense expenditure is relatively small when compared to the leading defense spenders
3.5.3. UAE spent over 6.2% of its GDP on defense in 2017
3.6. Market Opportunities: Key Trends and Drivers
3.6.1. Multi-role aircraft
3.6.2. Military Infrastructure Construction
3.6.3. Mine Resistance Armored Protected Vehicle
3.6.4. Military ISR satellites
3.6.5. Infantry Fighting Vehicles (IFV)
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Limitations of the domestic defense industry to encourage arms imports
4.1.2. The UAE stood as the world’s fourth-largest arms importer over the historic period
4.1.3. The US continues to be the major arms supplier to the UAE
4.1.4. Missiles and Aircraft dominates UAE defense imports
4.2. Export Market Dynamics
4.2.1. The UAE has minimal defense exports
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: low to medium
5.1.2. Bargaining power of buyer: medium to high
5.1.3. Barrier to entry: medium to high
5.1.4. Intensity of rivalry: high
5.1.5. Threat of substitution: low to medium
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Defense deals are settled through direct negotiation or competitive bidding
6.1.2. Foreign OEMs prefer indirect offsets to meet the obligations associated with defense deals
6.2. Market Entry Route
6.2.1. Budget Process
6.2.2. Procurement Policy and Process
6.2.3. Foreign OEMs use proxy representatives to enter the market
6.2.4. Defense exhibitions hosted by the UAE serve as an entry route for foreign OEMs
6.2.5. Joint ventures and collaborations offer alternative means of entering the market
6.3. Key Challenges
6.3.1. Complying with the UAE’s stringent offset requirements a concern for OEMs
6.3.2. UAE demands technology transfer in defense deals
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Public Sector Companies
7.2.1. Abu Dhabi Ship Building - Overview
7.2.2. Abu Dhabi Ship Building - Major Products and Services
7.2.3. Abu Dhabi Ship Building (ADSB) - recent announcements and strategic initiatives
7.2.4. Abu Dhabi Ship Building - alliances
7.2.5. Abu Dhabi Ship Building - recent contract wins
7.2.6. Abu Dhabi Ship Building: Financial Analysis
7.2.7. Gulf Logistics and Naval Support - overview
7.2.8. Gulf Logistics and Naval Support - Major Services
7.2.9. Abu Dhabi Systems Integration - overview
7.2.10. Abu Dhabi Systems Integration - Major Products and Services
7.2.11. Abu Dhabi Systems Integration - recent announcements and strategic initiatives
7.2.12. Abu Dhabi Systems Integration - alliances
7.3. Key Foreign Companies
7.3.1. Lockheed Martin: overview
7.3.2. Lockheed Martin: products
7.3.3. Lockheed Martin: recent announcements and strategic initiatives
7.3.4. Lockheed Martin: alliances
7.3.5. Lockheed Martin: recent contract wins
7.3.6. Lockheed Martin: Financial Analysis
7.3.7. BAE Systems Plc. - Overview
7.3.8. BAE Systems Plc. - Major Products
7.3.9. BAE Systems Plc. - recent announcements and strategic initiatives
7.3.10. BAE Systems Plc. - alliances
7.3.11. BAE Systems Plc. - recent contract wins
7.3.12. BAE Systems: Financial Analysis
7.3.13. Raytheon: Overview
7.3.14. Raytheon: Major products
7.3.15. Raytheon: recent announcements and strategic initiatives
7.3.16. Raytheon: alliances
7.3.17. Raytheon: recent contract wins
7.3.18. Raytheon: Financial Analysis
7.3.19. Rolls-Royce Plc. - Overview
7.3.20. Rolls-Royce Plc. - Major Products
7.3.21. Rolls-Royce Plc. - recent announcements and strategic initiatives
7.3.22. Rolls-Royce Plc. - alliances
7.3.23. Rolls-Royce Plc. - recent contract wins
7.3.24. Rolls-Royce Plc.: Financial Analysis
7.3.25. Northrop Grumman Corporation - Overview
7.3.26. Northrop Grumman Corporation - Major Products
7.3.27. Northrop Grumman Corporation - recent announcements and strategic initiatives
7.3.28. Northrop Grumman Corporation: alliances
7.3.29. Northrop Grumman Corp.: recent contract wins
7.3.30. Northrop Grumman: Financial Analysis
7.3.31. Thales - Overview
7.3.32. Thales - Major Products
7.3.33. Thales - recent announcements and strategic initiatives
7.3.34. Thales - alliances
7.3.35. Thales - recent contract wins
7.3.36. Thales: Financial Analysis
7.3.37. The Boeing Company - Overview
7.3.38. The Boeing Company - Major Products
7.3.39. The Boeing Company - recent announcements and strategic initiatives
7.3.40. The Boeing Company - alliances
7.3.41. The Boeing Company - recent contract wins
7.3.42. The Boeing Company: Financial Analysis
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP per Capita
8.1.2. Gross Domestic Product
8.1.3. Exports of Goods and Services
8.1.4. Imports of Goods and Services (LCU Bn)
8.1.5. LCU per USD (period average)
8.1.6. Market Capitalization of Listed Companies
8.1.7. Market Capitalization of listed companies as a % GDP
8.1.8. Foreign direct investment, net (BoP, current US$ Billion)
8.1.9. Net foreign direct investment as % of GDP
8.1.10. Mining, Manufacturing, Utilities Output (LCU Bn)
9. Appendix
9.1. About SDI
9.2. Disclaimer
List of Tables
Table 1: UAE Army Strength
Table 2: UAE Air Force Strength
Table 3: UAE Navy Strength
Table 4: UAE - Ongoing Development and Procurement Programs
Table 5: UAE - Future Procurement Programs
Table 6: UAE Defense Expenditure (AED Billion & US$ Billion), 2013-2022
Table 7: UAE GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 8: UAE Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 9: UAE Defense Capital Expenditure (AED Billion & US$ Billion), 2013-2022
Table 10: UAE Per Capita Expenditure (US$), 2013-2022
Table 11: UAE Defense Expenditure for Homeland Security (AED Billion & US$ Billion), 2013-2022
Table 12: Terrorism Index, 2017
Table 13: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022
Table 14: UAE - Offset Guidelines and Agreements
Table 15: UAE Budget Formation Timetable
Table 16: Competitive Landscape of the UAE Defense Industry
Table 17: Abu Dhabi Ship Building - Major Products & Services
Table 18: Abu Dhabi Ship Building - Alliances
Table 19: Abu Dhabi Ship Building - recent contract wins
Table 20: Gulf Logistics and Naval Support - Major Services
Table 21: Abu Dhabi Systems Integration - Major Products & Services
Table 22: Abu Dhabi Systems Integration - alliances
Table 23: Lockheed Martin - Major Services
Table 24: Lockheed Martin - Alliances
Table 25: Lockheed Martin - Recent Contract Wins
Table 26: BAE Systems Plc. - Major Products
Table 27: BAE Systems Plc. - Alliances
Table 28: BAE Systems Plc. - recent contract wins
Table 29: Raytheon - Major Products
Table 30: Raytheon - Alliances
Table 31: Raytheon Company - recent contract wins
Table 32: Rolls-Royce Plc.- Major Products
Table 33: Rolls-Royce Plc. - Alliances
Table 34: Rolls-Royce Plc. - recent contract wins
Table 35: Northrop Grumman - Major Products
Table 36: Northrop Grumman Corporation - Alliances
Table 37: Northrop Grumman Corp. - Recent Contract Wins
Table 38: Thales - Major Products
Table 39: Thales - Alliances
Table 40: Thales - recent contract wins
Table 41: The Boeing Company - Major Products
Table 42: The Boeing Company - Alliances
Table 43: The Boeing Company - recent contract wins 127"
List of Figures
Figure 1: UAE Defense Expenditure (in AED Billion), 2013-2022
Figure 2: UAE Defense Expenditure (US$ Billion), 2013-2022
Figure 3: UAE GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2013-2022
Figure 4: UAE Defense Expenditure Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: UAE Defense Capital Expenditure (AED Billion), 2013-2022
Figure 6: UAE Defense Capital Expenditure (US$ Billion), 2013-2022
Figure 7: UAE Per Capita Expenditure (US$), 2013-2022
Figure 8: UAE Homeland Security Expenditure (AED Billion), 2013-2022
Figure 9: UAE Homeland Security Expenditure (US$ Billion), 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: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2017 and 2022
Figure 14: Benchmarking with Large Defense Spenders as % of GDP - 2017
Figure 15: Multi-role Aircraft (US$ Million), 2017-2027
Figure 16: Military Infrastructure Construction (US$ Million), 2017-2027
Figure 17: Mine Resistance Armored Protected Vehicle Market Size (US$ Million), 2017-2027
Figure 18: Military ISR satellites market size (US$ Million), 2017-2027
Figure 19: Infantry Fighting Vehicle (US$ Million), 2017-2027
Figure 20: UAE Defense Imports (US$ million), 2012-2016
Figure 21: UAE Defense Imports by Country (%), 2012-2016
Figure 22: UAE Defense Imports by Category, 2012-2016
Figure 23: UAE Defense Exports (US$ million), 2012-2016
Figure 24: UAE Defense Exports by Country (%), 2012-2016
Figure 25: UAE Defense Exports by Category, 2013-2016
Figure 26: Industry Dynamics Porter’s Five Forces Analysis
Figure 27: Abu Dhabi Ship Building - Revenue Trend Analysis (AED Million), 2012-2016
Figure 28: Abu Dhabi Ship Building - Operating Profit Trend Analysis (AED million), 2012-2016
Figure 29: Abu Dhabi Ship Building - Net Profit Trend Analysis (AED million), 2012-2016
Figure 30: Lockheed Martin - Revenue Trend Analysis (US$ Billion), 2012-2016
Figure 31: Lockheed Martin - Operating Profit Trend Analysis (US$ Billion), 2012-2016
Figure 32: Lockheed Martin - Net Profit Trend Analysis (US$ Billion), 2012-2016
Figure 33: BAE Systems - Revenue Trend Analysis (GBP Billion), 2012-2016
Figure 34: BAE Systems - Operating Profit Trend Analysis (GBP Billion), 2012-2016
Figure 35: BAE Systems - Net Profit Trend Analysis (GBP Billion), 2012-2016
Figure 36: Raytheon - Revenue Trend Analysis (US$ Billion), 2012-2016
Figure 37: Raytheon - Operating Profit Trend Analysis (US$ Billion), 2012-2016
Figure 38: Raytheon - Net Profit Trend Analysis (US$ Billion), 2012-2016
Figure 39: Rolls-Royce Plc. - Revenue Trend Analysis (GBP Billion), 2012-2016
Figure 40: Rolls-Royce Plc. - Operating Profit Trend Analysis (GBP Million), 2012-2016
Figure 41: Rolls-Royce Plc. - Net Profit Trend Analysis (GBP Million), 2012-2016
Figure 42: Northrop Grumman - Revenue Trend Analysis (US$ Billion), 2012-2016
Figure 43: Northrop Grumman - Operating Profit Trend Analysis (US$ Billion), 2012-2016
Figure 44: Northrop Grumman - Net Profit Trend Analysis (US$ Billion), 2012-2016
Figure 45: Thales - Revenue Trend Analysis (EUR Billion), 2012-2016
Figure 46: Thales - Operating Profit Trend Analysis (EUR million), 2012-2016
Figure 47: Thales - Net Profit Trend Analysis (EUR million), 2012-2016
Figure 48: Boeing - Revenue Trend Analysis (USD Billion), 2012-2016
Figure 49: Boeing - Operating Profit Trend Analysis (US$ Billion), 2012-2016
Figure 50: Boeing - Net Profit Trend Analysis (US$ Billion), 2012-2016
Figure 51: UAE GDP Per Capita (US$), 2015-2025
Figure 52: UAE GDP at Current Prices (US$ Billion), 2015-2025
Figure 53: UAE Exports of goods and services (LCU Billion), 2005-2014
Figure 54: UAE Imports of goods and services (LCU Billion), 2005-2014
Figure 55: LCU per USD (US$), 2015-2025
Figure 56: UAE market capitalization of listed companies (US$ billion), 2005-2012
Figure 57: UAE market capitalization of listed companies (% of GDP), 2005-2012
Figure 58: UAE net foreign direct investment (BoP, current US$ Billion) 2011-2014
Figure 59: UAE net foreign direct investment as a % of GDP 2005-2014
Figure 60: UAE net foreign direct investment as a % of GDP 2005-2014

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