The Finnish Defense Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015

iCD Research, February 2011, Pages: 148

Synopsis:

- Top level overview of the Finnish defense industry
- A breakdown of the Finnish defense industry by spend pattern valued from 2006 through 2010 and forecasted from 2011 through 2015
- A breakdown of the markets by segment valued from 2006 through 2010 and forecasted from 2011 through 2015
- Details of top companies active across the Finnish defense industry
- Emerging trends and opportunities in the Finnish defense industry in the last 12 months

This report offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original equipment manufacturers) to gain a market share in the Finnish defense industry.

In particular, it offers in-depth analysis of the following:

- Market opportunity and attractiveness: detailed analysis of the current industry size and growth expectations during 2011–2015, including highlights of the key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.
- Procurement dynamics: trend analysis of imports and exports, together with its implications and impact on the Finnish defense industry.
- Industry structure: five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
- Market entry strategy: analysis of possible ways to enter the market, together with detailed descriptions of how existing players have entered the market, including key contracts, alliances, and strategic initiatives.
- Competitive landscape and strategic insights: analysis of competitive landscape of the defense industry in Finland. It provides an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
- Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.

Scope of the report:

- Analysis of the defense industry market size from 2006 through 2010 and forecasts till 2015
- Analysis of defense budget allocation
- Benchmarking with key global markets
- Market opportunities
- Defense procurement dynamics
- Industry dynamics
- Market entry strategy
- Competitive landscape and strategic insights
- Business environment and country risk

Reasons to Buy:

- Gain insight into the Finnish defense industry with current, historic and forecast market values
- Get insight on market opportunity and attractiveness
- Get insight on industry procurement dynamics
- Gain insight on industry structure
- Gain insight into the regulations governing the Finnish defense industry and the potential market entry strategies with an expert analysis of the competitive structure
- Identify top companies of the Finnish defense industry along with profiles of all those companies

Key Highlights:

Finnish defense expenditure is estimated at US$3.8 billion in 2011, the result of a CAGR of 5.93% during the review period. Finnish military spending is anticipated to increase at a CAGR of 3.70% during the forecast period to reach US$4.4 billion by 2015. Over the course of the next five years the nation’s military spending is expected to be driven by the country’s participation in international peacekeeping missions, modernization initiatives and a perceived security threat from Russia.

During the review period the country’s defense expenditure and overall economic growth advanced at different rates. However, throughout the forecast period, the country’s defense spending is expected to be highly dependent on the nation’s GDP growth rate. Defense expenditure as a percentage of GDP is likely to increase from an average of 1.4% during the review period to an average of 1.6% during the forecast period.

A majority of the nation’s defense budget is earmarked for revenue expenditure, primarily due to a large troop size. During the review period the nation allocated an average of 63% of its total defense budget to revenue expenses, while an average of 37% of the defense budget was spent on the procurement and modernization of equipment. With the country planning to downsize its troop size by over 100,000 over the next five years, the share of capital expenditure in the overall defense budget is expected to increase to an average of 39% during the forecast period. Owing to an increase in capital expenditure, defense equipment suppliers will witness a surge in demand for advance defense systems such as fighter aircraft, transport aircraft, missile defense systems and advanced defense communication systems.

1. Introduction
1.1 About this Report
1.2 Definitions
1.3 Methodology
1.3.1 Secondary research
1.3.2 Primary research
1.3.3 Conventions
1.4 ICD Research Intelligence Terrorism Index
1.5 About ICD Research
1.6 About Strategic Defence Intelligence

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size and Forecast
3.1.1 Finnish defense spending expected to increase at a CAGR of 3.70% during the forecast period
3.1.2 International peacekeeping missions, modernization initiatives and a perceived security threat from Russia will drive the country’s defense expenditure
3.2 Analysis of Defense Budget Allocation
3.2.1 Capital expenditure allocation expected to increase during the forecast period
3.2.2 Defense expenditure as a percentage of GDP expected to increase during the forecast period
3.2.3 Defense expenditure to be correlated to the nation’s economic growth during the forecast period
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security market expected to register a CAGR of 3.73% during the forecast period
3.3.2 Homeland security spending expected increase
3.3.3 Finland considered a low risk country for terror activities
3.3.4 Finland experienced low terror activity during the review period
3.4 Benchmarking with Key Global Markets
3.4.1 Finnish defense budget expected to increase faster than its European neighbors
3.4.2 Finnish defense expenditure is small compared to leading spenders
3.4.3 Finland does not fulfill NATO standards for defense spending
3.4.4 Finland ranked twentieth among top global arms exporters during 2006–09
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 Increased demand for missile defense systems
3.5.2 Modernization of the aviation forces will create a demand for aircraft and helicopters
3.5.3 Defense communication systems will witness a surge in demand

4. Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Defense imports registered a decline during 2006–09
4.1.2 Sweden has emerged as one of the significant defense trade partners of the country
4.1.3 Aircrafts accounts for a majority of arms imports
4.2 Export Market Dynamics
4.2.1 Arms exports declined during 2006–09
4.2.2 EU countries account for a majority of Finnish defense exports
4.2.3 Ships are the largest exported defense hardware

5. Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low to high
5.1.2 Bargaining power of buyer: high
5.1.3 Barrier to entry: medium
5.1.4 Intensity of rivalry: low to high
5.1.5 Threat of substitution: low to high

6. Market Entry Strategy
6.1 Market Regulation
6.1.1 Government encourages offsets in order to develop the domestic defense industrial base
6.1.2 Finland’s defense sector is open to foreign direct investment
6.2 Market Entry Route
6.2.1 Partnering with domestic defense firms offer attractive market entry route
6.2.2 Foreign OEMs gain industry access through joint R&D programs
6.3 Key Challenges
6.3.1 Increase in corruption is hampering growth of the defense industry
6.3.2 Defense budget deficit may lead to a reduction in the overall military budget

7. Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.1.1 Elektrobit Corp.: overview
7.1.2 Elektrobit Corp.: products and services
7.1.3 Elektrobit Corp.: recent announcements and strategic initiatives
7.1.4 Elektrobit Corp.: alliances
7.1.5 Elektrobit Corp.: recent contract wins
7.1.6 Elektrobit Corp: financial analysis
7.1.7 Kiitokori Oy: overview
7.1.8 Kiitokori Oy: products and services
7.1.9 Kiitokori Oy: recent announcements and strategic initiatives
7.1.10 Kiitokori Oy: alliances
7.1.11 Kiitokori Oy: recent contract wins
7.1.12 Kiitokori Oy: financial analysis
7.1.13 Millog Oy: overview
7.1.14 Millog Oy: products and services
7.1.15 Millog Oy: recent announcements and strategic initiatives
7.1.16 Millog Oy: alliances
7.1.17 Millog Oy: recent contract wins
7.1.18 Millog Oy: financial analysis
7.1.19 Nammo Lapua Oy: overview
7.1.20 Nammo Lapua Oy: products and services
7.1.21 Nammo Lapua Oy: recent announcements and strategic initiatives
7.1.22 Nammo Lapua Oy: alliances
7.1.23 Nammo Lapua Oy: recent contract wins
7.1.24 Nammo Lapua Oy: financial analysis
7.1.25 Patria Aviation Oy: overview
7.1.26 Patria Aviation Oy: products and services
7.1.27 Patria Aviation Oy: recent announcements and strategic initiatives
7.1.28 Patria Aviation Oy: alliances
7.1.29 Patria Aviation Oy: recent contract wins
7.1.30 Patria Aviation Oy: financial analysis
7.1.31 Patria Land Services Oy: overview
7.1.32 Patria Land Services Oy: products and services
7.1.33 Patria Land Services Oy: recent announcements and strategic initiatives
7.1.34 Patria Land Services Oy: alliances
7.1.35 Patria Land Services Oy: recent contract wins
7.1.36 Patria Land Services Oy: financial analysis
7.1.37 Patria Oyj: overview
7.1.38 Patria Oyj: products and services
7.1.39 Patria Oyj: recent announcements and strategic initiatives
7.1.40 Patria Oyj: alliances
7.1.41 Patria Oyj: recent contract wins
7.1.42 Patria Oyj: financial analysis
7.1.43 Patria Systems Oy: overview
7.1.44 Patria Systems Oy: products and services
7.1.45 Patria Systems Oy: recent announcements and strategic initiatives
7.1.46 Patria Systems Oy: alliances
7.1.47 Patria Systems Oy: recent contract wins
7.1.48 Patria Systems Oy: financial analysis
7.1.49 Patricomp Oy: overview
7.1.50 Patricomp Oy: products and services
7.1.51 Patricomp Oy: recent announcements and strategic initiatives
7.1.52 Patricomp Oy: alliances
7.1.53 Patricomp Oy: recent contract wins
7.1.54 Patricomp Oy: financial analysis
7.1.55 TEMET: overview
7.1.56 TEMET: products and services
7.1.57 TEMET: recent announcements and strategic initiatives
7.1.58 TEMET: alliances
7.1.59 TEMET: recent contract wins
7.1.60 TEMET: financial analysis

8. Business Environment and Country Risk
8.1 Business Confidence
8.1.1 Industrial Confidence Indicator
8.1.2 Market capitalization trend - NASDAQ OMX Helsinki Exchange, Finland
8.1.3 FDI by sector
8.1.4 Deployment of credit by sector
8.2 Economic Performance
8.2.1 GDP at constant prices (US dollars)
8.2.2 GDP per capita at constant prices (US dollars)
8.2.3 GDP at current prices (US dollars)
8.2.4 GDP per capita at current prices (US dollars)
8.2.5 GDP split by key sectors
8.2.6 Agricultural net output at current prices (Euro)
8.2.7 Agricultural net output at current prices (US dollars)
8.2.8 Agricultural net output at current prices as percentage of GDP
8.2.9 Manufacturing net output at current prices (Euro)
8.2.10 Manufacturing net output at current prices (US dollars)
8.2.11 Manufacturing net output at current prices as percentage of GDP
8.2.12 Mining, manufacturing and utilities net output at current prices (Euro)
8.2.13 Mining, manufacturing and utilities at current prices (US dollars)
8.2.14 Mining, manufacturing and utilities at current prices, as percentage of GDP
8.2.15 Construction net output at current prices (Euro)
8.2.16 Construction net output at current prices (US dollars)
8.2.17 Construction net output at current prices as a percentage of GDP
8.2.18 Crude steel production
8.2.19 Crude oil consumption
8.2.20 Inflation rate
8.2.21 Fiscal balance as a percentage of GDP
8.2.22 Current account balance as a percentage of GDP
8.2.23 Exports as a percentage of GDP
8.2.24 Imports as a percentage of GDP
8.2.25 Exports growth
8.2.26 Imports growth
8.2.27 External debt as a percentage of GDP
8.2.28 Annual average exchange rate US$–EUR
8.2.29 End of the period exchange rate US$–EUR
8.3 Infrastructure Quality and Availability
8.3.1 Total airports and sea ports
8.3.2 Railways and roadways
8.3.3 Passenger vehicle production volume
8.3.4 Commercial vehicle production volume
8.3.5 Automotive components exports trend
8.3.6 Automotive components imports trend
8.3.7 Passenger car penetration
8.3.8 Total installed capacity for electricity generation
8.3.9 Installed capacity for the generation of conventional thermal electricity
8.3.10 Electricity production
8.3.11 Installed capacity for the generation of hydro-electricity
8.3.12 Installed capacity for renewable electricity generation
8.3.13 Electricity consumption
8.3.14 Electricity exports
8.3.15 Electricity imports
8.3.16 Healthcare expenditure
8.3.17 Healthcare expenditure as percentage of GDP
8.3.18 Healthcare expenditure per capita
8.3.19 Total internet subscribers
8.3.20 Broadband internet subscribers
8.3.21 Personal computer penetration rate
8.3.22 Mobile phone penetration rate
8.3.23 R&D expenditure as a percentage of GDP
8.4 Labor Force
8.4.1 Labor force
8.4.2 Unemployment rate
8.5 Demographics
8.5.1 Annual disposable income
8.5.2 Annual per capita disposable income
8.5.3 Annual consumer expenditure on food
8.5.4 Annual per capita consumer expenditure on food
8.5.5 Total population
8.5.6 Urban and rural population
8.5.7 Female percentage of population
8.5.8 Male percentage of population
8.5.9 Mean age of population
8.5.10 Median age of population
8.5.11 Population density
8.5.12 Age distribution of the total population
8.5.13 Age distribution of the male population
8.5.14 Age distribution of the female population
8.5.15 Number of households
8.6 Political and Social Risk
8.6.1 Political stability
8.6.2 Terrorism index
8.6.3 Transparency index

9. Appendix
9.1 Contact Us
9.2 About ICD Research
9.3 Disclaimer

List of Tables
Table 1: ICD Research Intelligence Terrorism Index, 2010
Table 2: Top Twenty Global Arms Exporters*, 2006–09
Table 3: Offset Regulations in Finland
Table 4: Offset multiplier categories
Table 5: Market Entry Strategies by Key Foreign Companies
Table 6: Elektrobit – Alliances
Table 7: Elektrobit – Recent contract wins
Table 8: Millog Oy – Alliances
Table 9: Millog Oy – Recent Contract Wins
Table 10: Nammo Lapua Oy – Recent Contract Wins
Table 11: Patria Aviation Oy – Alliances
Table 12: Patria Land Services Oy - Recent Contract Wins
Table 13: Patria Oyj – Alliances
Table 14: Patria Oyj – Recent Contract Wins
Table 15: Patricomp – Recent Contract Wins

List of Figures
Figure 1: Finnish Defense Market Size and Forecast (US$ Billion), 2006–15
Figure 2: Finnish Defense Expenditure Allocation for Revenue and Capital Expenditure (%), 2006–15
Figure 3: Finnish Defense Expenditure as a Percentage of GDP, 2006–15
Figure 4: Finnish Defense Expenditure vis-à-vis GDP Growth Rate, 2006–2015
Figure 5: Finnish Homeland Security Expenditure (US$ Billion), 2006–15
Figure 6: ICD Research Intelligence Terrorism Heat Map, 2010
Figure 7: ICD Research Intelligence Terrorism Index, 2010
Figure 8: Benchmarking with Key Global Markets – Historical vs. Expected Defense Budget Growth
Figure 9: Defense Expenditure of the Largest Military Spenders in the World (US$ billion), 2010 and 2015
Figure 10: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2010
Figure 11: Finnish Defense Import Trend (US$ Million), 2006–09
Figure 12: Finnish Defense Imports by Country (%), 2006–09
Figure 13: Finnish Defense Imports by Category (%), 2006–09
Figure 14: Finnish Defense Export Trend (US$ Million), 2006–09
Figure 15: Finnish Defense Exports by Country (%), 2006–09
Figure 16: Finnish Defense Exports by Category (%), 2006–09
Figure 17: Industry Dynamics - Porter’s Five Forces Analysis
Figure 18: Elektrobit – Revenue Trend Analysis for 2005–09
Figure 19: Elektrobit – Operating Profit Analysis for 2005–09
Figure 20: Elektrobit – Net Profit Analysis for 2005–09
Figure 21: Patria Oyj – Revenue Trend Analysis (EUR Million), FY2005–09
Figure 22: Patria Oyj – Operating Profit Trend Analysis (EUR Million), FY2005–09
Figure 23: Patria Oyj – Net Profit Trend Analysis (EUR Million), FY2007–09
Figure 24: Industrial Confidence Index, Q12008–Q111

- Elektrobit Corp.
- Kiitokori Oy
- Millog Oy
- Nammo Lapua Oy
- Patria Aviation Oy
- Patria Land Systems Oy
- Patria Oyj
- Patria Systems Oy
- Patricomp Oy
- TEMET

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