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The Romanian Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016
iCD Research, June 2012, Pages: 137
Product Synopsis
This report is the result of SDI/ICD Research’s extensive market and company research covering the Romanian 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.
Introduction and Landscape
Why was the report written?
The Romanian 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) in order to gain market share in the Romanian defense industry.
What is the current market landscape and what is changing?
The Romanian defense market, which registered significant decline during the review period, is anticipated to remain steady at US$1.88 billion during the forecast period. The country’s defense expenditure will continue to be driven by factors such as participation in peace keeping missions, joint training operations, and improvements in border control measures. Defense expenditure as a percentage of GDP is also projected to decline as a result of the country’s economy increasing at a faster rate than compared to defense expenditure.
What are the key drivers behind recent market changes?
Romania is expected to invest US$9.39 billion in the fulfillment of its defense requirements. The defense expenditure of Romania is primarily driven by the country’s participation in various international peacekeeping missions, joint operations with the police force for the internal security of the country, and modernization of the armed forces, primarily by acquiring second-hand equipment.
What makes this report unique and essential to read?
The Romanian Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016 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.
Key Features and Benefits
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 Romanian defense industry.
The report covers the porters 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 Romania. 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.
Key Market Issues
Romania is expected to invest US$9.39 billion in its armed forces, of which expenditure on the acquisition of military hardware is forecast to be US$1.56 billion, offering foreign OEMs limited opportunities to cater to the Romanian defense industry. Due to the economic crisis, Romania had postponed the procurement of equipment in 2011, which resulted in dropping shares of capital expenditure in overall defense expenditure.
According to Transparency International's 2011 Corruption Perceptions Index, Romania dropped in rank to 25th in the EU. Incidents of malpractice within the country’s military industrial base may limit the growth of the country’s defense sector. In addition to damaging the country’s image in the global arms market, it also discourages foreign OEMs from entering the market.
As a result of low investment on R&D of advanced technology defense systems, the country’s defense capabilities are limited in terms of production of aircraft, small arms, and ammunition. Many domestic companies act as subcontractors to larger European and US defense companies. This forced the country to import defense equipment such as air defense systems, sensors, aircraft and aircraft parts, armored vehicles, missiles, and engines, as domestic suppliers lack the capabilities to manufacture advanced defense systems.
Key Highlights
Romanian defense expenditure, estimated at US$1.64 billion during 2012, declined at a CAGR of -11.96% during the review period. During the forecast period, it is expected to record a CAGR of 6.78% and reach US$2.14 billion by 2016. Over the next five years the country’s defense expenditure will be driven by factors such as participation in peace keeping missions, joint training operations, and improvements in border control measures.
The country’s homeland security budget is expected to be driven by the policing of human trafficking, smuggling, and cybercrime. The danger of weapons and drug smuggling from Transnistria, a small breakaway republic from Moldova, makes the country’s border security particularly challenging. In order to counter the threats posed by these criminal activities, the country is expected to invest in surveillance and intelligence technologies such as electronic identification documents, e-passports, automated border crossing systems, and CCTV systems.
1 Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. SDI Terrorism Index
1.5. About Strategic Defence Intelligence
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1. Defense Market Size Historical and Forecast
3.1.1. Romanian defense expenditure expected to register growth during the forecast period
3.1.2. Participation in peacekeeping missions, joint operations and border control measures will support 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. Capital expenditure to register positive CAGR growth during the forecast period
3.2.3. Defense budget as a percentage of GDP expected to decrease during the forecast period
3.2.4. Defense related expenditure to grow with positive CAGR during the forecast period
3.2.5. Expenditure on national security to register growth during the forecast period
3.3. Homeland Security Market Size and Forecast
3.3.1. Homeland security budget projected to decline during the forecast period
3.3.2. Capital expenditure is expected to witness growth during forecast period
3.3.3. Restructuring organizations and illegal immigration to drive homeland security budget
3.3.4. Romania considered at 'some risk’ of terrorist attack
3.3.5. Romania experienced some risk of terror activity during the review period
3.4. Benchmarking with Key Global Markets
3.4.1. The country is expected to remain a small player in the international defense market
3.4.2. Romanian military expenditure is modest compared to countries with the largest defense expenditure
3.4.3. The country allocates a lower percentage of GDP towards defense than other NATO members
3.5. Market Opportunities: Key Trends and Growth Stimulators
3.5.1. Acquisition of advanced training technologies is expected during forecast period
3.5.2. Military transport aircraft expected to create new market opportunities
3.5.3. Demand for armored personnel carriers to increase
3.5.4. F-16 Fighting Falcons will provide attractive market opportunities
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Lack of advanced technology drives imports
4.1.2. Defense imports expected to be higher during the forecast period
4.1.3. The US, Germany and Italy account for the majority of the country’s defense imports
4.1.4. Air defense systems, sensors and aircraft are the largest imported military hardware
4.2. Export Market Dynamics
4.2.1. Defense exports registered a decline during the review period
4.2.2. The UAE is the largest importer of Romanian arms
4.2.3. Aircraft and aircraft parts account for significant portion of 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: high
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: medium to high
5.1.5. Threat of substitution: low to high
6 Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset policy mandates suppliers invest a minimum of XX% of the contract value into the Romanian economy
6.1.2. Romania allows 100% foreign direct investment in defense sector
6.2. Market Entry Route
6.2.1. Foreign defense OEMs enter the market through acquisitions and alliances
6.2.2. EDA promotes defense procurements within EU
6.3. Key Challenges
6.3.1. Defense budget cuts impede the growth of defense industry
6.3.2. Rampant corruption and inadequate legal infrastructure
6.3.3. Foreign competition hampers the domestic defense industry
7 Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. CN Romarm SA: overview
7.2.2. CN Romarm SA: products and services
7.2.3. CN Romarm SA: recent announcements and strategic initiatives
7.2.4. CN Romarm SA: alliances
7.2.5. CN Romarm SA: recent contract wins
7.2.6. S.C. Uzina Mecanica Cugir S.A.: overview
7.2.7. S.C. Uzina Mecanica Cugir S.A.: products and services
7.2.8. S.C. Uzina Mecanica Cugir S.A.: recent announcements and strategic initiatives
7.2.9. Aerostar S.A.: overview
7.2.10. Aerostar S.A.: products and services
7.2.11. Aerostar S.A.: recent announcements and strategic initiatives
7.2.12. Aerostar S.A.: alliances
7.2.13. Aerostar S.A.: recent contract wins
7.2.14. Aerostar S.A.: financial analysis
7.2.15. IAR S.A. Brasov: overview
7.2.16. IAR S.A. Brasov: products and services
7.2.17. IAR S.A. Brasov: recent announcements and strategic initiatives
7.2.18. IAR S.A. Brasov: alliances
7.2.19. IAR S.A. Brasov: recent contract wins
7.2.20. IAR S.A. Brasov: financial analysis
7.2.21. Turbomecanica S.A. : overview
7.2.22. Turbomecanica S.A. : products and services
7.2.23. Turbomecanica S.A. : recent announcements and strategic initiatives
7.2.24. Turbomecanica S.A. : recent contract wins
7.2.25. Turbomecanica S.A.: financial analysis
7.2.26. Electromagnetica SA: overview
7.2.27. Electromagnetica SA: products and services
7.2.28. Electromagnetica SA: recent announcements and strategic initiatives
7.2.29. Avioane Craiova S.A: overview
7.2.30. Avioane Craiova S.A: products and services
7.2.31. Avioane Craiova S.A: recent announcements and strategic initiatives
7.2.32. Avioane Craiova S.A: alliances
7.2.33. Avioane Craiova S.A: recent contract wins
7.2.34. Elprof S.A.: overview
7.2.35. Elprof S.A.: products and services
7.2.36. Elprof S.A.: recent announcements and strategic initiatives
7.2.37. Elprof S.A.: alliances
7.2.38. Elprof S.A.: recent contract wins
7.2.39. IOR S.A.: overview
7.2.40. IOR S.A.: products and services
7.2.41. IOR S.A.: recent announcements and strategic initiatives
7.2.42. Simultec S.R.L.: overview
7.2.43. Simultec S.R.L.: products and services
7.2.44. Simultec S.R.L.: recent announcements and strategic initiatives
7.2.45. Simultec S.R.L.: recent contract wins
7.3. Key Foreign Companies
7.3.1. Intelcan Technosystems, Inc.: overview
7.3.2. Intelcan Technosystems, Inc.: products and services
7.3.3. Intelcan Technosystems, Inc.: recent announcements and strategic initiatives
7.3.4. Intelcan Technosystems, Inc.: recent contract wins
7.3.5. S.C. Eurocopter Romania SA: overview
7.3.6. S.C. Eurocopter Romania SA: products and services
7.3.7. S.C. Eurocopter Romania SA: recent contract wins
8 Business Environment and Country Risk
8.1. Demographics & Social Statistics
8.1.1. Population - Female
8.1.2. Population - Male
8.2. Economic Performance
8.2.1. Construction Output, Current Prices, Local Currency
8.2.2. Construction Output, Current Prices, US Dollars
8.2.3. Current Account Balance as Percentage of GDP
8.2.4. Deposit Interest Rate
8.2.5. Exports of goods and services, current prices
8.2.6. Exports of Services
8.2.7. External debt as percentage of GDP (%)
8.2.8. Fiscal Balance as a percentage of GDP
8.2.9. Foreign Direct Investment
8.2.10. GDP at Purchasing Power Parity
8.2.11. GDP, Constant Prices (Local Currency)
8.2.12. GDP, Constant Prices (US$)
8.2.13. GDP, Current Prices (Local Currency)
8.2.14. GDP, Current Prices (US$)
8.2.15. General Government Final Consumption Expenditure
8.2.16. Gross Fixed Capital Formation, Current Prices
8.2.17. Imports of goods and services
8.2.18. Inflation, average consumer prices
8.2.19. Interest Rate (Lending)
8.2.20. Manufacturing Output, Current Prices (Local Currency Bn)
8.2.21. Manufacturing Output, Current Prices (US$ Billions)
8.2.22. US$- Exchange Rate (Annual Average)
8.2.23. Wholesale Price Index
8.3. Energy and Utilities
8.3.1. Crude Oil Distillation Capacity
8.3.2. Electricity Exports
8.3.3. Electricity Imports
8.3.4. Electricity Installed Capacity
8.3.5. Fossil Fuels Proved natural gas reserves
8.3.6. Fossil Fuels- Proved oil reserves
8.3.7. Hydroelectricity Installed Capacity
8.3.8. Natural Gas Consumption
8.3.9. Natural Gas Imports
8.3.10. Natural Gas Production
8.3.11. Net Conventional Thermal Electricity Generation
8.3.12. Net Geothermal, Solar, Wind, and Wood Electric Power Generation
8.3.13. Net Hydroelectric Power Generation
8.3.14. Nuclear Electricity Net Generation
8.3.15. Petroleum, Consumption
8.3.16. Petroleum, Production
8.4. Labour Force
8.4.1. People Employed in R & D
8.5. Minerals
8.5.1. Coal Consumption
8.5.2. Coal Production
8.6. Social & Political Risk
8.6.1. Political Stability Index
8.6.2. Transparency Index
8.7. Telecommunication
8.7.1. Fixed line calling cost local
8.7.2. Fixed line calling cost National
9 Appendix
9.1. Contact Us
9.2. About SDI
9.3. Disclaimer
CN Romarm SAS.C. Uzina Mecanica Cugir S.A.Aerostar S.A.IAR S.A. BrasovTurbomecanica S.A.Electromagnetica SAAvioane Craiova S.AElprof S.A.IOR S.A.Simultec S.R.L.Intelcan Technosystems, Inc.S.C. Eurocopter Romania SA
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