Future of the Bangladesh Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

  • ID: 4403339
  • Report
  • Region: Bangladesh
  • 87 pages
  • Strategic Defence Intelligence
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Bangladesh Allocated US$2.0 Billion to its Defense Sector in 2013, Which Increased to US $3.3 Billion in 2017

Bangladesh government has been steadily increasing its defense budget 2015 - 2017. Defense expenditure registered a CAGR of 13.10% over 2013-2017. This trend is expected to continue during the forecast period, owing to the government’s well-defined military modernization plans to better equip its armed forces. During the forecast period, the defense budget is projected to increase at a CAGR of 10.36%.

Bangladeshi armed forces, accounts for the majority of total defense expenditure, with an average share of 50.5% over 2013-2017. Of the rest, 14.3% was allocated to the air force, 14.5% was assigned to the navy, and other defense functions controlled the remaining 20.8%. Over the forecast period, the average allocated share for the army, air force, navy, and other defense functions is forecast to be 50.6%, 13.9%, 15.2%, and 20.3% respectively.

Bangladesh homeland security (HLS) expenditure increased from US$1.4 Billion in 2013 to US$2.3 Billion in 2017, registering a CAGR of 12.57%. Expenditure was mainly directed towards arms and drug trafficking and terrorism issues; a trend expected to continue over the forecast period. Bangladesh’s homeland security budget is estimated to grow at a CAGR of 11.99% over the forecast period to 2022.

The report “Future of the Bangladesh Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Bangladeshi defense industry with market size forecasts covering the next five years.

This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

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

  • The Bangladeshi defense industry market size and drivers: Detailed analysis of the Bangladeshi defense industry during 2018-2022, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
  • Budget allocation and key challenges: Insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country.
  • Porter’s Five Force analysis of the Bangladeshi defense industry: Analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry.
  • Import and Export Dynamics: Analysis of prevalent trends in the country’s imports and exports over the last five years.
  • Market opportunities: Details of the top five defense investment opportunities over the next 10 years.
  • Competitive landscape and strategic insights: Analysis of the competitive landscape of the Bangladeshi defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Scope

The Bangladeshi government has been steadily increasing its defense budget 2015 - 2017. Defense expenditure registered a CAGR of 13.10% over 2013-2017. The country allocated US$2.0 billion to its defense sector in 2013, which increased to US$3.3 billion in 2017. This trend is expected to continue during the forecast period, owing to the government’s well-defined military modernization plans to better equip its armed forces.
Revenue expenditure allocation increased from 69.3% in 2013 to 76.1% in 2017 due to the country’s defense modernization efforts. Conversely, the country’s capital expenditure declined from 30.7% to 23.9% during the historic period. Over the forecast period, Bangladesh is expected to allocate an average of 25.5% of its defense budget to capital expenditure, while the remainder will be assigned to revenue expenditure.
The MoD is expected to invest in acquisition of frigates and corvettes.

Reasons to buy

  •  This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Bangladeshi defense industry market trends for the coming five years
  •  The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
  •  Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector
  •  A deep qualitative analysis of the Bangladeshi defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
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1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About the Publisher

2. Executive Summary

3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine & Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Social, Political and Economic Environment & Support for Defense Projects
3.1.6. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. The Bangladeshi defense budget is expected to reach US$5.4 billion by 2022, at a CAGR of 10.36%
3.2.2. Military modernization and peacekeeping missions are expected to drive defense expenditure over the forecast period
3.2.3. Bangladeshi defense expenditure as a percentage of GDP set to increase over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure allocation is expected to increase slightly over the forecast period
3.3.2. Need to replace obsolete equipment to drive defense capital expenditure
3.3.3. Need to replace obsolete equipment to drive defense expenditure
3.3.4. Budget allocation on army is expected to remain highest over the forecast period
3.3.5. Per capita defense expenditure expected to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Bangladeshi homeland security expenditure is expected to grow at a CAGR of 11.99% over the forecast period
3.4.2. Measures to combat drug smuggling and human trafficking are expected to drive Bangladeshi homeland security expenditure
3.4.3. Bangladesh falls under the “highly affected” category
3.4.4. Bangladesh is “highly affected” by acts of terrorism
3.4.5. Bangladesh has a terrorism index score of “6.5”
3.5. Benchmarking with Key Global Markets
3.5.1. Bangladeshi defense budget expected to increase at a CAGR of 10.36% over the forecast period
3.5.2. Bangladeshi military expenditure remains very low compared to other Asian countries
3.5.3. The country allocates a low percentage of its GDP towards the defense sector
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Demand for frigates is forecast to increase
3.6.2. Increase demand for corvettes

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports are expected to increase over 2016-2020
4.1.2. Weapons manufactured in China comprised the majority of imports to Bangladesh
4.1.3. Armored vehicles and ships dominated military hardware imports
4.2. Export Market Dynamics
4.2.1. The country exported negligible defense goods during 2012-2016

5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power of Supplier: High
5.1.2. Bargaining Power of Buyer: Low
5.1.3. Barrier to Entry: Medium
5.1.4. Intensity of Rivalry: Low to High
5.1.5. Threat of Substitution: Medium to High
5.2. Market Regulation
5.2.1. Bangladesh does not disclose any offset obligations imposed by the country
5.2.2. Foreign direct investment (FDI) in the defense sector not disclosed by the government
5.3. Market Entry Route
5.3.1. Budgeting Process
5.3.2. Equipment manufacturers enter the market through government-to-government deals
5.3.3. Joint venture and license manufacturing agreements provide an attractive market entry route
5.4. Key Challenges
5.4.1. Limited defense budget deters investors from market entry
5.4.2. Corruption hinders growth of the Bangladeshi defense sector
5.4.3. Chinese companies dominate the market, creating a challenge for other foreign firms

6. Competitive Landscape and Strategic Insights
6.1. Competitive Landscape Overview
6.2. Key Companies
6.2.1. Bangladesh Ordnance Factory: Overview
6.2.2. Bangladesh Ordnance Factory: Products and Services
6.2.3. Bangladesh Machine Tools Factory (BMTF) Ltd: Overview
6.2.4. Bangladesh Machine Tools Factory: Products and Services
6.2.5. Leonardo: Overview
6.2.6. Leonardo: Products
6.2.7. Leonardo: Recent Contract Wins
6.2.8. Airbus Helicopters SAS: Overview
6.2.9. Airbus Helicopters SAS: Products and Services
6.2.10. Airbus Helicopters SAS: Recent Contract Wins

7. Business Environment and Country Risk
7.1. Economic Performance
7.1.1. Nominal GDP per Capita
7.1.2. GDP at Current Prices (US$)
7.1.3. Exports of Goods and Services (Current LCU Billion)
7.1.4. Imports of Goods and Services (Current LCU Billion)
7.1.5. Gross National Disposable Income (US$ Billion)
7.1.6. LCU per US$ (period average)
7.1.7. Market Capitalization of Listed Companies (US$ Billion)
7.1.8. Market Capitalization of Listed Companies (% of GDP)
7.1.9. Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
7.1.10. Goods Exports as a Percentage of GDP
7.1.11. Goods Imports as a Percentage of GDP
7.1.12. Services Imports as a Percentage of GDP
7.1.13. Service Exports as a Percentage of GDP
7.1.14. Foreign Direct Investment, Net (BoP, current US$ billion)
7.1.15. Net Foreign Direct Investment as a Percentage of GDP
7.1.16. Mining, Manufacturing, Utilities Output (LCU Billion)

8. Appendix
8.1. About the Author
8.2. Disclaimer

List of Tables
Table 1: Bangladeshi Ground Forces Strength
Table 2: Bangladesh Navy Strength
Table 3: Bangladesh Air Force Strength
Table 4: Bangladeshi - Ongoing Development and Procurement Programs
Table 5: Bangladesh - Future Procurement Programs
Table 6: Bangladeshi Defense Expenditure (BDT Billion & US$ Billion), 2013-2022
Table 7: Bangladeshi GDP Growth and Defense Expenditure as a Percentage of GDP Growth, 2013-2022
Table 8: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 9: Bangladesh Defense Capital Expenditure (BDT Billion & US$ Billion), 2013-2022
Table 10: Bangladeshi Defense Budget Split Between Military Services (Army, Air Force, Navy and Others) (%), 2013-2022
Table 11: Bangladeshi Defense Budget in BDT Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Table 12: Bangladeshi Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Table 13: Bangladeshi Per Capita Defense Expenditure (US$), 2013-2022
Table 14: Bangladeshi Homeland Security Expenditure (BDT Billion & US$ Billion), 2013-2022
Table 15: Terrorism Index, 2017
Table 16: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Table 17: Bangladeshi Budget Formation Timetable
Table 18: Competitive Landscape of the Bangladeshi Defense Industry
Table 19: Bangladesh Ordnance Factory - Key Products and Services
Table 20: Bangladesh Machine Tools Factory - Key Products and Services
Table 21: Leonardo - Key Products
Table 22: Leonardo - Recent Contracts
Table 23: Airbus Helicopters SAS - Key Products and Services
Table 24: Airbus Helicopters SAS - Recent Contracts

List of Figures
Figure 1: Bangladeshi Defense Expenditure (BDT Billion), 2013-2022
Figure 2: Bangladeshi Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Bangladeshi GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022
Figure 4: Bangladeshi Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Bangladeshi Defense Capital Expenditure (BDT Billion), 2013-2022
Figure 6: Bangladeshi Defense Capital Expenditure (US$ Billion), 2013-2022
Figure 7: Bangladeshi Defense Budget Split Between Army, Navy, Air Force and Others, 2013-2022
Figure 8: Bangladeshi Defense Budget in BDT Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Figure 9: Bangladeshi Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Figure 10: Bangladeshi Per Capita Defense Expenditure (US$), 2013-2022
Figure 11: Bangladeshi Homeland Security Expenditure (BDT Billion), 2013-2022
Figure 12: Bangladeshi Homeland Security Expenditure (US$ Billion), 2013-2022
Figure 13: Terrorism Heat Map, 2017
Figure 14: Terrorism Index, 2017
Figure 15: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 and 2022
Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017
Figure 18: Frigates Market Size (US$ million), 2017 - 2027
Figure 19: Corvettes Market Size (US$ million), 2017-2025
Figure 20: Bangladeshi Defense Import Trend, 2012-2016 (TIV values)
Figure 21: Bangladeshi Defense Import by Country, 2012-2016 (TIV values)
Figure 22: Bangladesh Defense Imports by Category (%), 2012-2016
Figure 23: Industry Dynamics - Porter’s Five Forces Analysis
Figure 24: Bangladeshi GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 25: Bangladesh - GDP at Current Prices (US$ Billion), 2015-2025
Figure 26: Bangladeshi Exports of Goods and Services (LCU Billion), 2005-2014
Figure 27:Bangladeshi Imports of Goods and Services (LCU Billion), 2005-2014
Figure 28: Bangladeshi Gross National Disposable Income (US$ Billion), 2005-2013
Figure 29: Bangladesh LCU per US$, 2015-2024
Figure 30: Bangladeshi Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 31: Bangladeshi Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 32: Bangladeshi Government Cash Surplus/Deficit as % of GDP (LCU), 2005-2011
Figure 33: Bangladesh - Goods Exports as a % of GDP (%), 2005-2014
Figure 34: Bangladesh - Goods Imports as a % of GDP (%), 2005-2014
Figure 35: Bangladeshi Services Imports as a % of GDP (%), 2005-2014
Figure 36: Bangladesh Service Exports as a % of GDP (%), 2005-2014
Figure 37: Bangladesh - Foreign Direct Investment, Net (BoP, current US$ billion), 2005-2014
Figure 38: Bangladeshi Net Foreign Direct Investment as % of GDP, 2005-2013
Figure 39: Bangladeshi Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014

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  • Bangladesh Ordnance Factories (BOF)
  • Leonardo
  • Bangladesh Machine Tools Factory (BMTF)
  • The Airbus Helicopters SAS
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