The Thai Defense Industry - Market Opportunities, Entry Strategies, Analyses and Forecasts to 2016

iCD Research, March 2012, Pages: 141

Synopsis
This report is the result of ICD’s extensive market and company research covering the Thai defense industry. It provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news.

Summary
Why was the report written?
The Thai Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016 offers the reader insights into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Thai defense industry.

What is the current market landscape and what is changing?
Thailand, the third largest country in Southeast Asia, has one of the fastest growing defense markets in the world. As a consequence of years of defense budget underfunding, country’s military spending is anticipated to increase during the forecast period as the country’s armed forces undergo an extensive modernization program. As a result of this the country’s military expenditure as a percentage of GDP is projected to increase during the forecast period. Thai defense expenditure is expected to be driven by factors such as security threats, modernization plans, border disputes and an ongoing arms race within the Southeast Asian region.

What are the key drivers behind recent market changes?
By 2016, Thailandis expected to invest in the modernization and acquisition of its advanced defense systems in the areas of Navy and Air Force related defense capabilitiessuch asAircrafts, submarines, patrol vessels and frigates. These are the fundamental drivers in the Thai defense market.

What makes this report unique and essential to read?
The Thai Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016provides detailed analysis of the current industry size and growth expectations from 2011 to 2016, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.

Scope
The report provides detailed analysis of the current industry size and growth expectations from 2011 to 2016, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.

The report includes trend analysis of imports and exports, together with its implications and impact on the Thai defense industry.

The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.

The report allows readers to identify 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.

The report helps the reader to understand the competitive landscape of the defense industry in Thailand. 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.

Reasons To Buy
The report looks at historical performance as well as future industry projections using the in-house model. The report is a mixture of graphs, charts, tables and text in an effort to give the reader the maximum possible information in the most efficient and visually appealing manner.

The report helps marketing agencies in the industry to promote their business by aligning their capabilities and business practices with their customers’ changing needs, while it also helps suppliers to benchmark their efforts with those of their competitors.

The report uncovers the business outlook, key challenges, and opportunities identified by suppliers and buyers, enabling industry stakeholders to understand the business sentiment prevailing in the industry.

Key Highlights
The Thai defense expenditure is expected to be driven by modernization initiatives, border disputes, security threats and an arms race with neighboring countries. Moreover, years of defense budget underfunding has created the need for a comprehensive modernization program for equipment including fighter aircraft, military helicopters, armored carrier vehicles and diesel submarines.

The defense industrial base of Thailand is largely undeveloped and as a result the country is highly dependent on foreign suppliers to meet its military needs. Modernization of the country’s armed forces increased imports in real terms during the review period. Over the past five years the US emerged as the largest suppliers of defense equipment to the country.

The country is expected to spend US$16.21 billion on Home Land Security (HLS) over the forecast period on a cumulative basis. The nation’s HLS budget is driven by an increase in terrorist activities, mass protests and domestic instability. Over the next five years, significant investment is expected in equipment capable of countering maritime security threats and controlling riots.

In January 2011, 27,000 people gathered on the streets to demand the release of 19 protest leaders arrested in 2006 following clashes over the ousting of then Prime Minister, Thaksin Shinawatra. The country is expected to invest significantly in riot and crowd control equipment due to further planned protests.

Thailand faces a high level of threat from foreign terrorist organizations and is currently ranked at 13 on the ICD Research Intelligence Terrorism Index. This score indicates a high threat level compared to countries throughout the world.

1 Introduction
1.1 What is this Report About?
1.2 Definitions
1.3 Summary Methodology
1.4 ICD Research 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 Historical and Forecast
3.1.1 Thai defense expenditure expected to increase at a CAGR of 14.12% during the forecast period
3.1.2 Modernization initiatives, security threats, an arms race with neighbouring countries and border disputes are expected to drive defense spending
3.1.3 Military spending as a percentage of GDP is expected to increase during the forecast period
3.2 Analysis of Defense Budget Allocation
3.2.1 The share of capital expenditure in the overall defense budget is expected to increase during the forecast period
3.2.2 The army accounts for the largest share of defense expenditure
3.2.3 The country is expected to spend US$18.54 billion on its army during the forecast period
3.2.4 Naval budget projected to grow at a CAGR of 14.12% during the forecast period
3.2.5 Air force budget expected to be US$1.79 billion by 2016
3.2.6 Thailand to spend US$4.79 billion on support services during the forecast period
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security (HLS) expenditure expected to grow at a CAGR of 7.44% during 2012-2016
3.3.2 HLS expenditure to be driven by the country’s efforts to counter security threats and civil unrest
3.3.3 Thailand faces a high level of threat from foreign terrorist organizations
3.4 Benchmarking with Key Global Markets
3.4.1 Thai defense expenditure is expected to remain modest during the forecast period
3.4.2 Thai defense expenditure as a percentage of GDP higher than some of the leading defense spenders
3.4.3 Thailand has a low per capita defense expenditure
3.4.4 Thailand faces a high level of threat from foreign terrorist organizations
3.5 Market Opportunities: Key Trends and Drivers
3.5.1 Demand for naval defense equipment expected to increase
3.5.2 Modernization of the armed forces will create demand for advanced defense systems
3.5.3 Demand for land-based defense systems expected to increase

4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Undeveloped domestic defense industry drives imports
4.1.2 Defense imports expected to increase during the forecast period
4.1.3 The China and US dominated Thai defense imports during 2010
4.1.4 Aircraft accounted for a majority of defense imports during 2010
4.2 Export Market Dynamics
4.2.1 Thailand has limited export capabilities

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

6 Market Entry Strategy
6.1 Market Regulation
6.1.1 Offsets are mandatory for all procurements exceeding US$9.5 million
6.1.2 The Thai defense sector is partially regulated
6.2 Market Entry Route
6.2.1 Biennial defense exhibition provides an attractive entry route
6.2.2 Foreign equipment manufacturers enter the market through direct commercial sales
6.2.3 Foreign defense organizations venture into the market by partnering with a domestic defense firm
6.3 Key Challenges
6.3.1 Corruption and a lack of transparency impedes the growth of Thailand’s defense industry
6.3.2 Presence of indirect offset hampers the growth of the domestic defense sector

7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.2 Key Private Sector Companies
7.2.1 Avia Saab Technologies Co. Ltd: overview
7.2.2 Avia Saab Technologies Co. Ltd: products
7.2.3 Avia Saab Technologies Co. Ltd: recent announcements and strategic initiatives
7.2.4 Avia Saab Technologies Co. Ltd: alliances
7.2.5 Avia Saab Technologies: recent contract wins
7.2.6 Avia Saab Technologies: financial analysis
7.2.7 Avia Satcom: overview
7.2.8 Avia Satcom: products and services
7.2.9 Avia Satcom: recent announcements and strategic initiatives
7.2.10 Avia Satcom: alliances
7.2.11 Avia Satcom: recent contract wins
7.2.12 Avia Satcom: financial analysis
7.2.13 Infowave (Thailand) Co., Ltd.: overview
7.2.14 Infowave (Thailand) Co., Ltd.: defense products and services
7.2.15 Infowave (Thailand) Co., Ltd.: recent announcements and strategic initiatives
7.2.16 Infowave (Thailand) Co., Ltd.: alliances
7.2.17 Infowave (Thailand) Co., Ltd.: recent contract wins
7.2.18 Infowave (Thailand) Co., Ltd.: financial analysis

8 Business Environment and Country Risk
8.1 Business Confidence
8.1.1 Business sentiment index
8.1.2 Market capitalization trend - the Thailand stock exchange, Thailand
8.1.3 FDI inflows 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 (Thai baht)
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 (Thai baht)
8.2.10 Manufacturing net output at current prices (US dollar)
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 (Thai baht)
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 (Thai baht)
8.2.16 Construction net output at current prices (US dollar)
8.2.17 Construction net output 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 Current account balance as a percentage of GDP
8.2.22 Exports as a percentage of GDP
8.2.23 Imports as a percentage of GDP
8.2.24 Exports growth
8.2.25 Imports growth
8.2.26 Fiscal balance as a percentage of GDP
8.2.27 Annual average exchange rate US$–THB
8.2.28 End of the period exchange rate US$–THB
8.2.29 Debt service ratio
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 export trend
8.3.6 Automotive components import trend
8.3.7 Total installed capacity for electricity generation
8.3.8 Installed capacity for the generation of conventional thermal electricity
8.3.9 Electricity production
8.3.10 Electricity consumption
8.3.11 Installed capacity for the generation of hydroelectricity
8.3.12 Installed capacity for renewable electricity generation
8.3.13 Electricity exports
8.3.14 Electricity imports
8.3.15 Healthcare expenditure
8.3.16 Healthcare expenditure as a percentage of GDP
8.3.17 Healthcare expenditure per capita
8.3.18 R&D expenditure as a percentage of GDP
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
8.4 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: Thai Defense Expenditure (US$ billion), 2007–2011
Table 2: Thai Defense Expenditure (US$ billion), 2012–2016
Table 3: Thai GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth (%), 2007–2011
Table 4: Thai GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth (%), 2007–2011
Table 5: Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2007–2011
Table 6: Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2012–2016
Table 7: Thai Defense Budget Allocation (%), 2007–2011
Table 8: Thai Defense Budget Allocation (%), 2007–2011
Table 9: Thai Army Defense Budget Allocation (US$ Billion), 2007–2011
Table 10: Thai Army Defense Budget Allocation (US$ Billion), 2012–2016
Table 11: Thai Navy Defense Budget Allocation (US$ Billion), 2007–2011
Table 12: Thai Navy Defense Budget Allocation (US$ Billion), 2012–2016
Table 13: Thai Air Force Defense Budget Allocation (US$ Billion), 2007–2011
Table 14: Thai Air Force Defense Budget Allocation (US$ Billion), 2012–2016
Table 15: Thai Defense Budget Allocation for Other Categories (US$ Billion), 2007–2011
Table 16: Thai Defense Budget Allocation for Other Categories (US$ Billion), 2012–2016
Table 17: Thai Homeland Security Expenditure (US$ billion), 2007–2011
Table 18: Thai Homeland Security Expenditure (US$ billion), 2012–2016
Table 19: Benchmarking with Key Markets – 2007–2011 vs. 2012–2016
Table 20: ICD Research Intelligence Terrorism Index
Table 21: Defense Offset Regulations in Thailand
Table 22: Avia Saab Technologies Co. Ltd – Product Focus
Table 23: Avia Saab Technologies Co. Ltd: - Recent Contract Wins
Table 24: Avia Satcom – Product Focus
Table 25: Avia Satcom – Alliances
Table 26: Avia Satcom - Recent Contract Wins
Table 27: Infowave (Thailand) Co., Ltd – Product Focus
Table 28: Infowave (Thailand) Co., Ltd - Alliances

List of Figures
Figure 1: Thai Defense Expenditure (US$ billion), 2007–2011
Figure 2: Thai Defense Expenditure (US$ billion), 2012–2016
Figure 3: Thai GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth (%), 2007–2011
Figure 4: Thai GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth (%), 2012–2016
Figure 5: Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2007–2011
Figure 6: Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2012–2016
Figure 7: Thai Defense Budget Allocation (%), 2007–2011
Figure 8: Thai Defense Budget Allocation (%), 2012–2016
Figure 9: Thai Army Defense Budget Allocation (US$ Billion), 2007–2011
Figure 10: Thai Army Defense Budget Allocation (US$ Billion), 2012–2016
Figure 11: Thai Navy Defense Budget Allocation (US$ Billion), 2007–2011
Figure 12: Thai Navy Defense Budget Allocation (US$ Billion), 2012–2016
Figure 13: Thai Air Force Defense Budget Allocation (US$ Billion), 2007–2011
Figure 14: Thai Air Force Defense Budget Allocation (US$ Billion), 2012–2016
Figure 15: Thai Defense Budget Allocation for Other Categories (US$ Billion), 2007–2011
Figure 16: Thai Defense Budget Allocation for Other Categories (US$ Billion), 2012–2016
Figure 17: Thai Homeland Security Expenditure (US$ billion), 2007–2011
Figure 18: Thai Homeland Security Expenditure (US$ billion), 2012–2016
Figure 19: ICD Research Terrorism Heat Map, 2011
Figure 20: ICD Research Terrorism Heat Index, 2011
Figure 21: Benchmarking with Key Markets – 2007–2011 vs 2012–2016
Figure 22: Benchmarking with World’s Largest Defense Spenders – 2011 and 2016
Figure 23: Defense Spending as a Percentage of GDP of Countries with the Largest Defense Expenditure – 2011
Figure 24: Per Capita Defense Expenditure of the Largest Military Spenders in the World (US$), 2011
Figure 25: Thai Defense Imports (US$ million), 2005–2010
Figure 26: Thai Defense Imports by Country (%), 2005–2010
Figure 27: Thai Defense Imports by Category (%), 2005–2010
Figure 28: Industry Dynamics – Porter’s Five Forces Analysis
Figure 29: Avia Saab Technologies - Revenue Trend Analysis (SEK Million), 2006–2010
Figure 30: Avia Saab Technologies - Operating Profit Trend Analysis (SEK Million), 2006–2010
Figure 31: Avia Saab Technologies - Net Profit Trend Analysis (SEK Million), 2006–2010
Figure 32: Thai Business Sentiment Index, 2008–2010
Figure 33: The Thailand Stock Exchange Market Capitalization (US$ Billion), 2003–2009
Figure 34: Thai FDI Inflows by Sector (US$ Billion) 2003–2009
Figure 35: Thai Deployment of Credit by Sector (US$ Billion) 2003–2009
Figure 36: Thai GDP at Constant Prices (US$ Billion), 2003–2015
Figure 37: Thai GDP Per Capita at Constant Prices (US$), 2003–2015
Figure 38: Thai GDP at Current Prices (US$ Billion), 2003–2015
Figure 39: Thai GDP Per Capita at Current Prices (US$), 2003–2015
Figure 40: Thai GDP Split by Key Sectors (%), 2003 and 2009
Figure 41: Thai Agricultural Net Output at Current Prices (THB Trillion), 2003–2015
Figure 42: Thai Agriculture Net Output at Current Prices (US$ Billion), 2003–2015
Figure 43: Thai Agriculture Net Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 44: Thai Manufacturing Net Output at Current Prices (THB Trillion), 2003–2015
Figure 45: Thai Manufacturing Net Output at Current Prices (US$ Billion), 2003–2015
Figure 46: Thai Manufacturing Net Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 47: Thai Mining, Manufacturing and Utilities Net Output at Current Prices (THB Trillion), 2003–2015
Figure 48: Thai Mining, Manufacturing and Utilities Net Output at Current Prices (US$ Billion), 2003–2015
Figure 49: Thai Mining, Manufacturing and Utilities Net Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 50: Thai Construction Net Output at Current Prices (THB Billion), 2003–2015
Figure 51: Thai Construction Net Output at Current Prices (US$ Billion), 2003–2015
Figure 52: Thai Construction Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 53: Thai Crude Steel Production (Million Metric Tons), 2003–2015
Figure 54: Thai Crude Oil Consumption (Million Tons), 2003–2015
Figure 55: Thai Inflation Rate (%), 2003–2015
Figure 56: Thai Current Account Balance as a Percentage of GDP (%), 2003–2009
Figure 57: Thai Exports as a Percentage of GDP (%), 2003–2015
Figure 58: Thai Imports as a Percentage of GDP (%), 2003–2015
Figure 59: Thai Exports Growth (%), 2003–2015
Figure 60: Thai Imports Growth (%), 2003–2015
Figure 61: Thai Fiscal Balance as a Percentage of GDP (%), 2003–2009
Figure 62: Thai Annual Average Exchange Rate US$–THB, 2003–2009
Figure 63: Thai End of the Period Exchange Rate US$–THB, 2003–2009
Figure 64: Thai Debt Service Ratio (%), 2003–2009
Figure 65: Thai Airports and Sea Ports (Number of), 2009
Figure 66: Thai Railways and Roadways (Kilometers), 2009
Figure 67: Thai Passenger Vehicle Production (Units), 2003–2015
Figure 68: Thai Commercial Vehicle Production (Units), 2003–2015
Figure 69: Thai Automotive Components Exports (US$ Billion), 2003–2015
Figure 70: Thai Automotive Components Imports (US$ Billion), 2003–2015
Figure 71: Thai Total Installed Capacity for Electricity Generation (Million Kilowatts), 2003–2015
Figure 72: Thai Installed Capacity for the Generation of Conventional Thermal Electricity (Million Kilowatts), 2003–2015
Figure 73: Thai Electricity Production (Billion Kilowatt Hours), 2003–2015
Figure 74: Thai Electric Power Consumption (Billion Kilowatt Hours), 2003–2015
Figure 75: Thai Installed Capacity for the Generation of Hydroelectricity (Million Kilowatts), 2003–2015
Figure 76: Thai Installed Capacity for Generation of Renewable Electricity (Million Kilowatts), 2003–2015
Figure 77: Thai Electricity Exports (Billion Kilowatt Hours), 2003–2015
Figure 78: Thai Electricity Imports (Billion Kilowatt Hours), 2003–2015
Figure 79: Thai Healthcare Expenditure (US$ Billion), 2003–2015
Figure 80: Thai Healthcare Expenditure as a Percentage of GDP (%), 2003–2015
Figure 81: Thai Per Capita Healthcare Expenditure (US$), 2003–2015
Figure 82: Thai R&D Expenditure as a Percentage of GDP (%), 2003–2015
Figure 83: Thai Internet Subscriptions (Million), 2003–2015
Figure 84: Thai Broadband Internet Subscriptions (Million), 2003–2015
Figure 85: Thai Personal Computer Penetration Rate (per 100 people), 2003–2015
Figure 86: Thai Mobile Phone Penetration (%), 2003–2015
Figure 87: Thai Size of Labor Force in 15–59 Age Group (Million), 2003–2015
Figure 88: Thai Unemployment Rate (%), 2003–2015
Figure 89: Thai Annual Disposable Income (US$ Billion), 2003–2015
Figure 90: Thai Annual Per Capita Disposable Income (US$), 2003–2015
Figure 91: Thai Consumer Expenditure on Food (US$ Billion), 2003–2015
Figure 92: Thai Annual Per Capita Consumer Expenditure on Food (US$), 2003–2015
Figure 93: Thai Total Population (Million), 2003–2015
Figure 94: Thai Urban and Rural Population (%), 2003–2015
Figure 95: Thai Female Percentage of Population (%), 2003–2015
Figure 96: Thai Male percentage of Population (%), 2003–2015
Figure 97: Thai Mean Age of Population (Years), 2003–2015
Figure 98: Thai Median Age of Population (Years), 2003–2015
Figure 99: Thai Population Density (per Square Kilometer) 2003–2015
Figure 100: Thai Population Distribution by Age (%), 2003–2015
Figure 101: Thai Male Population Distribution by Age (%), 2003–2015
Figure 102: Thai Female Population Distribution by Age (%), 2003–2015
Figure 103: Thai Number of Households (Million), 2003–2015
Figure 104: Global Terrorism Heat Map, 2009
Figure 105: Thai Transparency Index, 2003–2009

- Avia
- Saab Technologies
- Avia
- Satcom
- Infowave (Thailand)

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