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

  • ID: 4410320
  • Report
  • Region: Brazil
  • 127 pages
  • Strategic Defence Intelligence
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Brazilian Homeland Security Expenditure is Estimated to Reach US$5.1 Billion in 2022

FEATURED COMPANIES

  • Aeroelectronica
  • Forjas Taurus SA
  • Helibras
  • Lockheed Martin Brazil
  • Northrop Grumman Brazil
  • MORE

Brazilian Government reduced its budget and focused on implementing a transaction tax on the people to overcome the recession. Although the actual budget increased in terms of local currency from 2012 to 2016, it showed a downward trend in the dollar value owing to variations in the exchange rate. Military expenditure, which stands at US$29.3 Billion in 2017, registered at a CAGR of -2.96%. It is however, expected to grow at a CAGR of 5%+ during the forecast period.

Brazilian homeland security expenditure is estimated to reach US$5.1 Billion in 2022. The country is spending heavily on border security and homeland infrastructure and the country is in the process of modernizing its border control and security infrastructure.

In order to promote Brazil’s domestic defense industry, the majority of its arms imports deals include technology transfer obligations. However, a number of defense firms are either reluctant to share proprietary information or are prohibited by their country's policy on the transfer of technology. This requirement has been a key deterrent for foreign OEMs entering the Brazilian industry.

The report “Future of the Brazil Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Brazilian 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, this report provides the following analysis:

  • The Brazilian defense industry market size and drivers: Detailed analysis of the Brazilian 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 Brazilian 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 Brazilian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Scope

  • Brazilian military expenditure, which stands at US$29.3 billion in 2017, registered at a CAGR of -2.96% during the historic period. It is however, expected to grow at a CAGR of 5.06% during the forecast period, and grow from US$30.3 billion in 2018 to reach US$36.9 billion by 2022. There is a huge difference between the planned budget and the executed budget in 2015 due to an economic crisis faced by the country, however with the country’s economy is showing some positive signs of recovery as the 2017 budget has marginally surpassed its initially planned estimates.
  • The Brazilian MoD allocated an average of 11.9% of defense spending towards capital expenditure during the historic period, which is expected to increase to 13.2% over the forecast period. The major procurements of the country include multi-role aircraft, multi-mission helicopters, naval vessels, aircraft carriers, transport helicopters, and modernizing its armored vehicles, FX-2 program. In addition, border monitoring program- SISFRON (Sistema Integrado de Monitoramento de Fronteiras) and SISGAAZ (Sistema de Gerenciamento da Amazônia Azul), is to be implemented during the forecast period.
  • The MoD is expected to invest in multi-role aircraft, disel electric submarine and military-IT and networking.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Brazilian 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 Brazilian 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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FEATURED COMPANIES

  • Aeroelectronica
  • Forjas Taurus SA
  • Helibras
  • Lockheed Martin Brazil
  • Northrop Grumman Brazil
  • MORE

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. Brazilian defense budget is expected to grow at an estimated CAGR of 5.06% during 2018-2022
3.2.2. Development of indigenous defense capabilities, modernization of defense systems, and large defense procurement projects are expected to drive the Brazilian defense expenditure
3.2.3. Defense budget as a percentage of GDP will remain at an average of 1.4% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Share of capital expenditure is expected to decrease during the forecast period
3.3.2. Capital expenditure is anticipated to record a CAGR of 7.72% during the forecast period
3.3.3. Army accounted for the largest percentage share of the overall Brazilian defense budget
3.3.4. Army to continue accounting for the lions share in Brazilian defense budget
3.3.5. The Brazilian Per-capita defense expenditure to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland Security market in Brazil is expected to grow at a CAGR of 3.88% during the forecast period
3.4.2. International sporting events fuel growth in homeland security spending
3.4.3. Brazil falls under “some risk” category in the terrorism index
3.4.4. Brazil faces some threats from terrorist organizations
3.4.5. Brazil has a terrorism index score of 1.7
3.5. Benchmarking with Key Global Markets
3.5.1. Brazil ranks among major Global Defense Markets
3.5.2. Brazil is expected to remain among top defense spending countries in the world
3.5.3. Brazil is expected to spend an average of 1.37% of its GDP on defense over the forecast period
3.6. Market Opportunities: Key Trends and Drivers
3.6.1. Multi-role aircraft
3.6.2. Diesel Electric Submarine
3.6.3. Military IT -Networking

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Modernization of defense systems expect to drive arms imports
4.1.2. Germany, United States, and France are the major suppliers for Brazil
4.1.3. Aircraft and Naval vessels accounted for a total share 57.9% in the Brazilian defense imports
4.2. Export Market Dynamics
4.2.1. Development of domestic defense capability is expected to fuel exports in Brazil’s emerging military industry
4.2.2. Indonesia and Afghanistan are the major prospects for the Brazilian defense exports
4.2.3. Aircraft accounted for the majority of Brazilian defense exports during 2012-2016

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: medium to high
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: low to medium
5.1.5. Threat of substitution: medium to high

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. International and domestic defense procurement deals are primarily decided by competitive bidding
6.1.2. Stringent offsets requirements for all defense procurements
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy and Process
6.2.3. Foreign OEMs follow direct offset route to enter defense market
6.2.4. Collaborations provide market entry opportunities
6.3. Key Challenges
6.3.1. Low allocation for defense capital expenditure and delay in the closure of defense deals are the major challenges of Brazilian Defense Industry
6.3.2. Complying with Brazil’s requirement for extensive technology transfer

7. Competitive landscape and Strategic Insights
7.1. Competitive landscape Overview
7.2. Key Public Sector Companies
7.2.1. Embraer: overview
7.2.2. Embraer: products
7.2.3. Embraer: recent announcement and strategic initiatives
7.2.4. Embraer - alliances
7.2.5. Embraer: recent contract wins
7.2.6. Embraer - financial analysis
7.2.7. Forjas Taurus SA: overview
7.2.8. Forjas Taurus SA: products
7.2.9. Forjas Taurus SA: recent announcement and strategic initiatives
7.2.10. Forjas Taurus SA: alliances
7.2.11. Forjas Taurus SA: recent contract wins
7.2.12. Forjas Taurus SA: financial analysis
7.2.13. Avibras Industria Aerospacial: overview
7.2.14. Avibras Industria Aeroespacial: products
7.2.15. Avibras Industria Aerospacial: recent announcement and strategic initiatives
7.2.16. Avibras Industria Aerospacial: alliances
7.2.17. Avibras Industria Aerospacial: recent contract wins
7.2.18. Companhia Brasileira de Cartuchos: overview
7.2.19. Companhia Brasileira de Cartuchos: products
7.2.20. Companhia Brasileira de Cartuchos: recent announcement and strategic initiatives
7.2.21. Companhia Brasileira de Cartuchos: recent contract wins
7.2.22. Helibras: overview
7.2.23. Helibras: products
7.2.24. Helibras: recent announcement and strategic initiatives
7.2.25. Helibras: alliances
7.2.26. Helibras: recent contract wins
7.2.27. Industria de Material Belico do Brasil (IMBEL): overview
7.2.28. Industria de Material Belico do Brasil (IMBEL): products
7.2.29. Industria de Material Belico do Brasil (IMBEL): recent announcement and strategic initiatives
7.2.30. Industria de Material Belico do Brasil (IMBEL): alliances
7.2.31. Industria de Material Belico do Brasil (IMBEL): recent contract wins
7.2.32. Aeroelectronica: overview
7.2.33. Aeroelectronica: products
7.2.34. Aeroelectronica: recent announcement and strategic initiatives
7.2.35. Aeroelectronica: alliances
7.2.36. Aeroelectronica: recent contract wins
7.2.37. Indústria Naval do Ceará: overview
7.2.38. Indústria Naval do Ceará: products and services
7.2.39. Indústria Naval do Ceará: recent announcement and strategic initiatives
7.2.40. Indústria Naval do Ceará: recent contract wins
7.2.41. Northrop Grumman Brazil: overview
7.2.42. Northrop Grumman Brazil: products
7.2.43. Northrop Grumman Brazil: recent announcement and strategic initiatives
7.2.44. Northrop Grumman Brazil: alliances
7.2.45. Northrop Grumman Brazil: recent contract wins
7.2.46. Lockheed Martin Brazil: overview
7.2.47. Lockheed Martin Brazil: products
7.2.48. Lockheed Martin Brazil: recent announcement and strategic initiatives
7.2.49. Lockheed Martin Brazil: alliances
7.2.50. Lockheed Martin Brazil: recent contract wins

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP per capita at constant prices (US$)
8.1.2. GDP at current prices (US$)
8.1.3. Exports of goods and services (BRL)
8.1.4. Imports of goods and services (BRL)
8.1.5. Gross national disposable income (US$ Billion)
8.1.6. BRL per US$ (period average)
8.1.7. Market capitalization of listed companies (US$ Billion)
8.1.8. Market capitalization of listed companies (% of GDP)
8.1.9. Government cash surplus/deficit as a percentage of GDP (BRL)
8.1.10. Goods exports and imports as a percentage of GDP
8.1.11. Services imports and exports as a percentage of GDP
8.1.12. Foreign direct investment, net (BoP, current US$ Billion)
8.1.13. Net foreign direct investment as a percentage of GDP
8.1.14. Mining, Manufacturing, Utilities Output (BRL Billion)

9. Appendix
9.1. About the Author
9.2. Disclaimer

List of Tables
Table 1: Brazilian - Defense Modernization Priorities
Table 2: Brazilian Army - High Priority Projects
Table 3: Brazilian Army - High Priority Projects
Table 4: Brazilian Air Force - High Priority Projects
Table 5: Brazilian Army Strength
Table 6: Brazilian Air Force Strength
Table 7: Brazilian Navy Strength
Table 8: Brazilian - Ongoing Development and Procurement Programs
Table 9: Brazilian - Future Procurement Programs
Table 10: Brazilian Defense Expenditure (BRL Billion & US$ Billion), 2013-2022
Table 11: Brazilian GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2013-2022
Table 12: Brazilian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Table 13: Brazilian Defense Capital Expenditure (BRL Billion & US$ Billion), 2013-2022
Table 14: Brazilian Defense Budget Share - (%) Split by Services (Army, Navy, Air Force and Other), 2013-2022
Table 15: Brazilian Defense Budget Allocations in BRL Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Table 16: Brazilian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Table 17: Brazilian Per Capita Defense Expenditure (US$), 2013-2022
Table 18: Brazilian Homeland Security Expenditure (BRL Billion & US$ Billion), 2013-2022
Table 19: Terrorism Index, 2017
Table 20: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022
Table 21: Brazil - Offset Guidelines and Agreements
Table 22: Brazil Budget Formation Timetable
Table 23: Competitive Landscape of the Brazilian Defense Industry
Table 24: Embraer- Alliances
Table 25: Embraer- Recent Contract Wins
Table 26: Forjas Taurus SA- Alliances
Table 27:Embraer- Recent Contract Wins
Table 28:Avibras Industria Aerospacial- Alliances
Table 29:Avibras Industria Aerospacial- Recent Contract Wins
Table 30: Companhia Brasileira de Cartuchos (CBC) - Recent Contract Wins
Table 31:Helibras- Alliances
Table 32:Helibras- Recent Contract Wins
Table 33:Industria de Material Belico do Brasil (IMBEL)- Alliances
Table 34:Industria de Material Belico do Brasil (IMBEL)- Recent Contract Wins
Table 35:Aeroelectronica- Alliances
Table 36:Aeroelectronica- Recent Contract Wins
Table 37:Indústria Naval do Ceará- Recent Contract Wins
Table 38:Northrop Grumman- Alliances
Table 39:Northrop Grumman - Recent Contract Wins
Table 40: Lockheed Martin- Alliances
Table 41:Lockheed Martin- Recent Contract Wins

List of Figures
Figure 1: Brazilian Defense Expenditure (BRL Billion), 2013-2022
Figure 2: Brazilian Defense Expenditure (US$ Billion), 2013-2022
Figure 3: Brazilian GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2013-2022
Figure 4: Brazilian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022
Figure 5: Brazilian Defense Capital Expenditure (BRL Billion), 2013-2022
Figure 6: Brazilian Defense Capital Expenditure (US$ Billion), 2013-2022
Figure 7: Brazilian Defense Budget Share - (%) Split by Services (Army, Navy, Air Force and Other), 2013-2022
Figure 8: Brazil Defense Budget in BRL Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Figure 9: Brazil Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2013-2022
Figure 10: Brazilian Per Capita Defense Expenditure (US$), 2013-2022
Figure 11: Brazilian Homeland Security Expenditure (BRL Billion), 2013-2022
Figure 12: Brazilian Homeland Security Expenditure (US$ 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: Multi-role Aircraft Market Size (US$ Million), 2017-2027
Figure 19: Diesel Electric Submarine Market Size (US$ Million), 2017 -2027
Figure 20: Military IT-Networking Market Size (US$ Million), 2017-2027
Figure 21: Brazilian Defense Import Trend (US$ Million), 2012-2016 (TIV values*)
Figure 22: Brazilian Defense Imports by Country (%), 2012-2016
Figure 23: Brazilian Defense Imports by Category (%), 2012-2016
Figure 24: Brazilian Defense Export Trend (US$ Million), 2012-2016 (TIV values)
Figure 25: Brazilian Defense Exports by Country (%), 2012-2016
Figure 26: Brazilian Defense Exports by Category (%), 2012-2016
Figure 27: Industry Dynamics - Porter’s Five Forces Analysis
Figure 28: Embraer - Revenue Trend Analysis (BRL Billion), 2012-2016
Figure 29: Embraer - Operating Profit Trend Analysis (BRL Billion), 2012-2016
Figure 30: Embraer -Net Profit Trend Analysis (BRL Billion), 2012-2016
Figure 31: Forjas Taurus SA - Revenue Trend Analysis (BRL Million), 2012-2016
Figure 32: Forjas Taurus SA - Operating Profit Trend Analysis (BRL Million), 2012-2016
Figure 33: Forjas Taurus SA - Net Profit Trend Analysis (BRL Million), 2012-2016
Figure 34: Brazilian GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 35: Brazil GDP at Current Prices (US$ Billion), 2015-2025
Figure 36: Brazilian Exports of goods and services (BRL Billion), 2005-2014
Figure 37: Brazilian Imports of goods and services (BRL Billion), 2005-2014
Figure 38: Brazilian Gross National disposable income (US$ Billion), 2010-2014
Figure 39: Brazilian BRL per US$, 2015-2024
Figure 40: Brazilian market capitalization of listed companies (US$ Billion), 2005-2012
Figure 41: Brazilian market capitalization of listed companies (% of GDP), 2005-2012
Figure 42: Brazilian Government cash surplus/deficit as % of GDP (BRL), 2005-2009
Figure 43: Brazil- Goods exports and imports as a % of GDP (%), 2005-2014
Figure 44: Brazil-Services imports and exports as a % of GDP (%), 2005-2014
Figure 45: Brazilian Foreign direct investment, net (BoP, current US$ Billion), 2005-2014
Figure 46: Brazilian Net foreign direct investment as % of GDP, 2005-2014
Figure 47: Brazilian Mining, Manufacturing, Utilities Output (BRL Billion), 2005-2014

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  • Aeroelectronica
  • Avibras Industria Aerospacial (Avibras)
  • Companhia Brasileira de Cartuchosis
  • Empresa Brasileira de Aeronautica SA (Embraer)
  • Forjas Taurus SA
  • Helibras
  • Industria de Material Belico do Brasil (IMBEL)
  • Indústria Naval do Ceará (INACE)
  • Lockheed Martin Brazil
  • Northrop Grumman Brazil
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