© 2015 ihs information | analytics | expertise a balance of trade evolving global opportunities...

© 2015 IHS

Information | Analytics | Expertise

A Balance of Trade

Evolving Global Opportunities

MARCH 2015

Ben Moores, Senior [email protected]

Georgios Salapasidis, Senior [email protected]

Charles Forester, Senior Research [email protected]

mailto:[email protected]



© 2015 IHS

A BALANCE OF TRADE / MARCH 2015

2

A Balance of Trade:

Introduction

Methodology

I. What does DS Forecast data entail?

II. How was the DS Forecast data processed for the project?

What are the key findings?

Total global defence trade by:

I. Global Picture

II. Regional Developments

III. Country Deep Dive

IV. Market Specific Trends

V. Future Opportunities

© 2015 IHS 3

A Balance of Trade:

Project Methodology


What’s in the Data?:

Standard IHS Aerospace & Defence Forecast Data

I. Deliveries not budgets

II. Bottom up Data collection

III. Global Coverage

IV. Only includes funds released to industry

V. No classified data/ Only publically sourced information

VI. Covers Production, R&D, Logistic support & Services

VII. Market Coverage – Munitions/ Small Arms Excluded

© 2015 IHS 4

A Balance of Trade:

Project Parameters


What’s in the Data?:

Data Selection Process

I. End User organization scrutinized for non-military applications

II. Changed Russian Prime Contractor nomenclature

III. Country of Final Assembly provided the basis for export records

IV. Licensed production % allocated as an export

V. Removed Jointly funded projects with one country of final assembly

VI. Left with some 30,000 programs and program elements

© 2015 IHS 5

A Balance of Trade:

Key Observations


Total global defence trade grew by the fastest rate since our records began

Saudi Arabia displaced India and is set to out perform the market

The Middle East continues to dominate in size and future opportunities

Aircraft remains the single biggest export segment but slowing.

Military vehicle exporter backlogs falling and opportunities limited

Sub-Saharan markets set to double to USD2 billion by the end of the forecast

Huge cyclical upcoming opportunities in Singapore, Qatar, Kuwait, Algeria, Brazil, Norway and Poland

© 2015 IHS


6

Total Global Defence Trade 2010-2015

© 2015 IHS


7

Global Procurement Expenditure 2010-2019

© 2015 IHS


8

Total Exports by Country 2014

© 2015 IHS


9

Defence Trade by East Asia 2013-14

© 2015 IHS 10


Country Assessment

Indonesia

Singapore

South Korea

© 2015 IHS 11

Indonesia – Imports and exports

A BALANCE OF TRADE/ MARCH 2015

Imports• Imports driven by the acquisition of air and

sea platforms from South Korea

• Import of air and naval platforms expected to contribute to increased import volume in 2015

• 2016 uptick expected following deliveries of Russian aircraft, Airbus helicopters, and potentially Sigma frigates

Exports

• Low in 2014, but expect to more than double in 2015 with vehicle, ship deliveries

• Plans to introduce offset policy slowly gaining momentum – export facilitation could be a multiplier component

• Already some strong partnerships established in-country (Airbus, Denel)

2010 2011 2012 2013 2014 2015 2016

0

10

20

30

40

50

60

70

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Exports Imports

Case study: Indonesia : imports and exports 2010-2016

Source: IHS © 2015 IHS 1533721

Exp

orts

(U

SD

mil

lion

s)

Impo

rts

(US

D m

illi

ons)

Year

© 2015 IHS


12

Singapore Imports

© 2015 IHS


13

Singapore Exports

© 2015 IHS


14

Singapore Opportunities

© 2015 IHS


15

South Korea Imports

© 2015 IHS


16

South Korea Exports

© 2015 IHS


17

South Korea Opportunities

© 2015 IHS


18

Defence Trade by West and Central Asia 2013-14

© 2015 IHS


19

Defence Trade by Oceania 2013-14

© 2015 IHS


20

Defence Trade by North America 2013-14

© 2015 IHS


21

Defence Trade by Latin America 2013-14

© 2015 IHS


22

Defence Trade by Eastern Europe 2013-14


© 2015 IHS 23

Country Assessment

Turkey

Russia

Ukraine

Poland

© 2015 IHS 24

Eastern European Imports: Future Prospects

The Eastern European Market will see noticeable growth in the mid-term as the most prominent importers have drafted ambitious procurement plans

Contracted imports for the region may reach $36bn to 2020

$20bn refer to Turkey, Poland, and Greece.

Opportunities for this region outvalue current market by 35%

Poland is set to increase defence spending from 2015 onwards and generate imports of up to $6bn within the next 5 years; funding is still at risk

Greece has several solid requirements pending but there are grave delays caused by financial hardship

Turkey is by far the most promising importer in the region with more than $10bn in prospected imports.


2015 2016 2017 2018 2019 2020$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Turkey

Greece

Poland

Co

ntr

acte

d I

mp

ort

s (M

)

2015 2016 2017 2018 2019 2020$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Turkey

Greece

Poland

Co

ntr

acte

d I

mp

ort

s &

O

pp

ort

un

itie

s (M

)

© 2015 IHS 25

Case Study: Turkish Imports

Contracted Imports show stable spending for the next five years

65% of contracted imports refer to platforms; 29% to systems and 6% to weapons

The mix is expected to remain unchanged

There is a pool $10bn in addressable opportunities for the 2014-20 period

At least 40% will be transformed to imports

Increased dependence on imports for the 2014-20 period but self-sufficiency in systems will increase after 2020, and platforms after the mid-20s


2014 2015 2016 2017 2018 2019 2020$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

$3,500.00

Weapons

Systems

PlatformsC

on

trac

ted

Im

po

rts

& O

pp

or-

tun

itie

s (M

)

2014 2015 2016 2017 2018 2019 2020$0.00

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

$3,000.00

Weapons

Systems

Platforms

Co

ntr

acte

d I

mp

ort

s (M

)

© 2015 IHS 26

Russia – Imports and exports


Imports• Achieved a period high of USD839

million in 2014, but are expected to dive in 2015 and 2016 due to domestic policy (import substitution, procurement regulations) and sanctions.

• However, bulk of 2014 and 2015 import figure based on Mistral LHD deliveries – future uncertain.

Exports• Reached a high of USD10 billion in

2014, and are expected to maintain a similar level in years ahead.

• Exports in 2014 driven by aircraft sales to China and India. Exports in 2015 are expected to be led by China.

2010 2011 2012 2013 2014 2015 2016

0

2,000

4,000

6,000

8,000

10,000

12,000

0

100

200

300

400

500

600

700

800

900

Exports Imports

Case study: Russia : imports and exports 2010-2016


Exp

orts

(U

SD

mil

lion

s)

Impo

rts

(US

D m

illi

ons)

Year

© 2015 IHS 27

Ukraine – Imports and exports


Imports• Declining trend, reported to be USD113 million in

2014.

• Many imports based on Russian systems that are now unlikely to be delivered.

• Future imports are currently at a tipping point – the Ukrainian government is now more receptive to imports, but many countries hesitant to provide.

Exports• Down slightly in 2014 at USD628 million.

• Continue to be driven by land systems, with exports to Thailand and Iraq, as well as aircraft and hovercraft. India and Thailand expected to continue to lead as destinations in 2015.

• However, UkrOboronProm reportedly halted exports in second-half of 2014 to devote workers to state requirements.

2010 2011 2012 2013 2014 2015 2016

0

100

200

300

400

500

600

700

800

0

20

40

60

80

100

120

140

160

180

Exports Imports

Case study: Ukraine : imports and exports 2010-2016


Exp

orts

(U

SD

mil

lion

s)

Impo

rts

(US

D m

illi

ons)

Year

© 2015 IHS


28

Defence Trade by Western Europe 2013-14


© 2015 IHS 29

Country Assessment

France

© 2015 IHS 30

France – Imports and exports


Imports• Increase in 2014 to USD507 million as

modernisation of E-3F and E-2 airborne early warning platforms continues.

• Support systems for new platforms (e.g. Airbus A400M Atlas simulators) gathering pace.

• Delivery of new platforms to fill capability gaps began in 2014, notably with the MQ-9B Predator – low cost but providing significant new capability to the French military.

Exports• Third-largest exporter globally at USD4.9 billion.

Driven primarily by aircraft (incl. helicopters), followed by ships.

• Expectations for 2015 led by A330 MRTT deliveries to the Middle East, but don’t take into account more recent announcements – Egyptian Rafale and FREMM, deliveries of equipment to Lebanon, etc.

• Still some uncertainty over some major exports (Rafale to India and Gulf States, Mistral to Russia).

2010 2011 2012 2013 2014 2015 2016

0

1,000

2,000

3,000

4,000

5,000

6,000

0

100

200

300

400

500

600

Exports Imports

Case study: France : imports and exports 2010-2016

Source: IHS © 2015 IHS

Exp

orts

(U

SD

mil

lion

s)

Impo

rts

(US

D m

illi

ons)

Year

© 2015 IHS


31

Defence Trade by Middle East 2013-14

© 2015 IHS 33

Case Study: Saudi Arabian Imports

Saudi Arabian imports have seen $1 billion in growth during 2014 and they are expected to grow further in the forthcoming years

Primary suppliers of military equipment is the US, UK, France and Germany.

2013’s multi-billion General Dynamics Land Systems contract for the Light Armoured Vehicle (LAV) will likely put Canada at the second position of exporters to the Kingdom.

Saudi Arabia has decisively increased its imports from 2011 and onwards by achieving double-digit budget increases for three consecutive years

Expectations of significantly lower oil revenues will increase uncertainty over military budget but reactionary cuts are unlikely.


2015 2016 2017 2018 2019 2020$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

$14,000.00

Addr Opps

Others

Germany

France

Canada

United Kingdom

United States

Contracted Imports & Addressable Opportunities ($M)

© 2015 IHS 46

Q&A Session

Next Intelligence Briefing: Major Program Opportunities within the FY16 US Defense BudgetThu 26th March - 15:00GMT / 11:00EDT

If you have any questions for the panellists, please use the Q&A or Chat windows on the right side of

your browser.

Ben Moores, Senior [email protected]

Georgios Salapasidis, Senior [email protected]

Charles Forester, Senior [email protected]




© 2015 ihs information | analytics | expertise a balance of trade evolving global opportunities...

Documents