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The Sri Lankan Defense Industry: Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016
iCD Research, June 2012, Pages: 96
This report is the result of SDI/ICD Research's extensive market and company research covering the Sri Lankan 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 Sri Lankan 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 Sri Lankan defense industry.
What is the current market landscape and what is changing?
The Sri Lankan defense market, which registered significant growth during the review period, is anticipated to remain steady at US$1.41 billion during the forecast period. The country's defense expenditure will continue to be driven by security threats, a strained relationship with India and a persistent threat from separatists. 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 defense expenditure.
What are the key drivers behind recent market changes?
Sri Lanka is expected to invest US$7.07 billion of its defense expenditure in the fulfilment of its defense requirements. Factors such as post-war rehabilitation, a tense relationship with India and the persistent threat from separatists are expected to stimulate defense expenditure during the forecast period.
What makes this report unique and essential to read?
The Sri Lankan 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 a 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 a 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 Sri Lankan 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 Sri Lanka. 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
Sri Lanka is expected to invest US$7.07 billion in its armed forces, of which US$0.33 billion is forecast to be on the acquisition of military hardware, offering foreign OEMs limited opportunities to cater to the Sri Lankan defense industry. Furthermore, during the civil war the country procured weapons by taking loans, and therefore over the next five years a portion of military expenditure will be spent on the repayment of existing loans.
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 market entry.
As a result of a lack of domestic defense capabilities, Sri Lanka is dependent on foreign suppliers to meet its military requirements. Arms imports, which registered increase during 2008, are further decreased due to a portion of the nation's capital expenditure being used to repay the loans taken out by the government during the civil war.
Sri Lankan defense expenditure grew at a CAGR of 10.12% during the review period and is estimated at US$1.42 billion in 2012. During the forecast period, the country's defense expenditure is expected to be driven by factors such as post war rehabilitation, a tense relationship with India and a persistent threat from separatists. However, military expenditure is expected to record a decrease in growth of -0.10% CAGR and remain at US$1.41 billion by 2016.
Suppliers willing to enter the Sri Lankan defense market do so by establishing offices within the country, forming a joint venture with a domestic defense firm or through the direct supply of defense equipment to the country. Of the three routes, entering the market through direct sales is the most preferred choice, and has been employed by countries such as India, Russia and Israel.
1.1 What is this Report About?
1.3 Summary Methodology
1.4 Strategic Defence Intelligence Terrorism Index
1.5 About Strategic Defence Intelligence
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size Historical and Forecast
3.1.1 Sri Lankan defense expenditure expected to register lower growth during the forecast period
3.1.2 Post-war rehabilitation efforts, a tense relationship with India and persistent threats from separatists are expected to drive defense expenditure
3.1.3 Defense expenditure as a percentage of GDP likely to come down during the forecast period
3.2 Analysis of Defense Budget Allocation
3.2.1 Revenue expenditure accounts for the majority of the country's defense expenditure
3.2.2 The army accounts for the largest share of defense expenditure
3.2.3 Air force expenditure expected to register CAGR of XX% during the forecast period
3.2.4 The country is expected to invest US$XX billion in its army during the forecast period
3.2.5 Naval defense budget projected to grow at a CAGR of XX% during the forecast period
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security budget projected to decrease during the forecast period
3.3.2 Internal security threats are expected to drive Sri Lankan homeland security expenditure
3.3.3 The country is considered at 'high risk of terrorist attack
3.3.4 Sri Lanka experienced high terrorist activity during the review period
3.4 Benchmarking with Key Global Markets
3.4.1 The country is expected to maintain limited presence in the international defense market
3.4.2 Sri Lankan military expenditure remains limited compared to countries with the largest defense expenditure
3.4.3 Compared to countries with leading defense expenditure, the country allocates a higher percentage of its GDP towards defense
3.4.4 Sri Lanka has low per capita defense expenditure
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 Demand for ammunitions are expected to surge over the forecast period
3.5.2 Air force modernization will create demand for combat aircraft
3.5.3 Obsolete and unsuitable equipment to fuel demand for military land-based procurement
4 Defense Procurement Market Dynamics
4.1.1 Lack of domestic defense capabilities drives imports
4.1.2 Defense imports expected to register decline during the forecast period
4.1.3 China accounted for the majority of the country's defense imports during the review period
4.1.4 Aircraft and ships emerged as the most imported military hardware during the review period
4.2 Export Market Dynamics
4.2.1 The country exported negligible defense goods during the review period
5 Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low
5.1.2 Bargaining power of buyer: medium
5.1.3 Barrier to entry: medium
5.1.4 Intensity of rivalry: medium
5.1.5 Threat of substitution: high
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 The Sri Lankan defense sector is partially regulated
6.2 Market Entry Route
6.2.1 Equipment manufacturers enter the market through direct sales
6.2.2 Foreign companies enter into the market by establishing offices in Sri Lanka
6.2.3 Partnership with domestic defense firms provides an attractive entry route
6.3 Key Challenges
6.3.1 Limited defense budget deters investors from market entry
6.3.2 Corruption hinders growth of the Sri Lankan defense sector
7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.2 Key Companies
7.2.1 AmSafe Bridport: overview
7.2.2 AmSafe Bridport: products
7.2.3 AmSafe Bridport: recent announcements and strategic initiatives
7.2.4 AmSafe Bridport: alliances
7.2.5 AmSafe Bridport: recent contract wins
7.2.7 Colombo Dockyard Plc: overview
7.2.8 Colombo Dockyard Plc: products
7.2.9 Colombo Dockyard Plc: recent announcements and strategic initiatives
7.2.10 Colombo Dockyard Plc: alliances
7.2.11 Colombo Dockyard PLC: recent contract wins
7.2.12 Colombo Dockyard Plc: financial analysis
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
8.2.1 External debt as percentage of GDP (%)
8.2.2 Fiscal Balance as a percentage of GDP
8.2.3 Foreign Direct Investment
8.2.4 GDP at Purchasing Power Parity
8.2.5 GDP, Constant Prices (Local Currency)
8.2.6 GDP, Constant Prices (US$)
8.2.7 GDP, Current Prices (Local Currency)
8.2.8 GDP, Current Prices (US$)
8.2.9 General Government Final Consumption Expenditure
8.2.10 Gross Fixed Capital Formation, Current Prices
8.2.11 Imports of goods and services
8.2.12 Inflation, average consumer prices
8.2.13 Interest Rate (Lending)
8.2.14 Manufacturing Output, Current Prices (Local Currency Bn)
8.2.15 Manufacturing Output, Current Prices (US$ Billions)
8.2.16 US$- Exchange Rate (Annual Average)
8.2.17 Wholesale Price Index
8.3 Energy and Utilities
8.3.1 Crude Oil Distillation Capacity
8.3.2 Electricity Installed Capacity
8.3.3 Hydroelectricity Installed Capacity
8.3.4 Net Conventional Thermal Electricity Generation
8.3.5 Net Geothermal, Solar, Wind, and Wood Electric Power Generation
8.3.6 Net Hydroelectric Power Generation
8.3.7 Petroleum, Consumption
8.3.8 Petroleum, Production
8.4.1 Coal Consumption
8.5 Social & Political Risk
8.5.1 Political Stability Index
8.5.2 Transparency Index
9.1 Contact Us
9.2 About SDI
AmSafe BridportColombo Dockyard Plc.