Future of the Finnish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

  • ID: 4464767
  • Report
  • Region: Finland
  • 101 pages
  • Strategic Defence Intelligence
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The Finnish Defense Capital Expenditure is Expected to Increase from US$2.5 Billion in 2019 to US$3.4 Billion in 2023

FEATURED COMPANIES

  • Elektrobit Corporation
  • Kiitokori Oy
  • Millog Oy
  • Nammo Lapua Oy
  • Patria
  • Patricomp Oy
  • MORE

Summary

Finland is a geo-strategically vital base due to its vicinity to Russia. The political and military development in Russia significantly influences the country’s security. The Baltic Sea is a predominant logistic transport corridor for Finland, and Russia’s rising interests in this area is likely to impact the security of the country. The Finnish annual defense budget stands at US$3.5 Billion in 2018, and is expected to grow at a CAGR of 11.25% over the forecast period.

Defense expenditure as a percentage of Gross Domestic Product (GDP) recorded an average of 1.3% during 2014–2018. As a result of the government’s effort to reduce debt and focus on enhancing employment within the country, it is expected to increase to 1.7% in the forecast period.

Finland capital expenditure is expected to increase significantly registering a CAGR of 10.80% during the forecast period. The Finnish Defence Ministry is expected to procure fighters and multi-role aircraft, corvettes and land based C4ISR. Furthermore, during the forecast period, Finland is expected to allocate as much as 67.6% of its defense budget towards revenue expenditure, which will be used to pay pension allowances to retired military personnel, salaries, training and other administrative activities.

During 2014–2018, Finland’s Homeland Security (HLS) expenditure was driven by the continuing problems of illicit drug trading and human trafficking across its eastern border with Russia, along with cyber-crimes. However, with much of the illegal migration from the Middle Eastern countries now subsiding, the country’s homeland security expenditure is anticipated to marginally decline over the forecast period. The expenditure is anticipated to increase at a CAGR of 3.82% during the forecast period. Finland is anticipated to spend significantly on border security, cyber security, and surveillance systems.

The report "Future of the Finnish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023" offers detailed analysis of the Finnish 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 Finnish defense industry market size and drivers: Detailed analysis of the Finnish defense industry during 2019–2023, 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. It also details the key challenges faced by defense market participants within the country.
  • Porter’s Five Force analysis of the Finnish 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 Finnish defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Companies mentioned in this report: Elektrobit Corporation, Kiitokori Oy , Millog Oy, Nammo Lapua Oy, Patria, Patricomp Oy, and Temet Oy

Scope

  • Finland’s total defense expenditure stands at US$3.5 billion in 2018, and is expected to grow at a CAGR of 11.25% over the forecast period, to reach US$5.6 billion in 2023. Finnish defense expenditure is primarily driven by participation in peacekeeping initiatives, the soldier modernization program, naval fleet modernization initiatives and the procurement of advanced technology equipment. Finland is an active participant in the crisis management programs mandated by the United Nations (UN). The Finnish defense industry is expected to focus its expenditure on Leopard 2A6 main battle tanks, multi-role aircraft, modernizing corvettes and acquiring land based C4ISR systems.
  • Finnish defense capital expenditure is expected to increase from US$2.5 billion in 2019 to US$3.4 billion in 2023, growing at a CAGR of 7.63%. The Finnish Defense Ministry is expected to procure multirole fighter aircraft, search and rescue helicopters, armored vehicles, main battle tanks, cyber security, a joint strike missile (JSM) system, and submarines. Revenue expenditure is expected to increase from US$4.6 billion in 2019 to US$5.5 billion in 2023, attributed to additional training and development programs that are to be undertaken over the forecast period.
  • The country is anticipated to spend significantly on fighters and multirole aircraft, land-based C4ISR, corvettes, in addition to cyber security, surveillance systems, airport security, biometric systems, video-surveillance systems, training, and cyber security software during the forecast period.

Reasons to buy

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

  • Elektrobit Corporation
  • Kiitokori Oy
  • Millog Oy
  • Nammo Lapua Oy
  • Patria
  • Patricomp Oy
  • MORE

1 Introduction
1.1 What is this Report About?
1.2 Definitions
1.3 Summary Methodology
1.4 About the Author

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 and Strategy
3.1.3 Military Fleet Size
3.2 Procurement Programs
3.2.1 Ongoing procurement programs
3.2.2 Future procurement programs
3.2.3 Top Procurement Programs By Value (US$ Million) 2018-2023
3.2.4 Social, political and economic environment and support for defense projects
3.2.5 Political and strategic alliances
3.3 Defense Market Size Historical and Forecast
3.3.1 Finnish defense budget to grow at a CAGR of 11.25% during 2019-2023
3.3.2 Modernization programs, international peacekeeping missions, and a perceived security threat from Russia are the main factors driving Finnish defense expenditure
3.4 Analysis of Defense Budget Allocation
3.4.1 Defense expenditure as a percentage of GDP to reach 1.3% by 2023
3.4.2 Revenue expenditure allocation expected to increase during the forecast period
3.4.3 Capital expenditure expected to grow at a CAGR of 10.80% over the forecast period
3.4.4 Per capita defense expenditure expected to increase during the forecast period
3.5 Homeland Security Market Size and Forecast
3.5.1 Homeland security expenditure is expected to grow at a CAGR of 3.82% during the forecast period
3.5.2 Homeland security expenditure in Finland is mainly driven by organized crimes and maritime security threats
3.5.3 Finland considered a moderate risk country for terror activities
3.5.4 Finland faces moderate level of threat from foreign terrorist organizations
3.5.5 Finland faces minimal threat from terrorists
3.6 Benchmarking with Key Global Markets
3.6.1 Finnish defense budget to increase at a CAGR of 11.25% during 2019-2023
3.6.2 Finnish defense expenditure is small compared to the leading spenders
3.6.3 Finland trails European states in defense spending
3.7 Market Opportunities: Key Trends and Drivers
3.7.1 Top 10 Defense market sectors by value (US$ Million) - Projections over period 2018-2023
3.7.2 Fighters and Multi-Role Aircraft
3.7.3 Land Based C4ISR
3.7.4 Corvettes

4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Defense imports are expected to increase during the forecast period
4.1.2 European countries including Italy, Sweden, and France were the major suppliers to Finland during 2012-2016
4.1.3 Aircraft, missiles and sensors constitute the majority of Finnish arms imports
4.2 Export Market Dynamics
4.2.1 Finnish exports decline over the period 2012-2016
4.2.2 EU countries account for the majority of Finnish defense exports
4.2.3 Armored vehicles are the largest exported defense hardware

5 Industry Dynamics
5.1 Bargaining power of supplier: High
5.2 Bargaining power of buyer: Medium
5.3 Barrier to entry: Medium
5.4 Intensity of rivalry: low to Medium
5.5 Threat of substitution: low to Medium

6 Market Entry Strategy
6.1 Market Regulation
6.1.1 The government encourages offsets in order to develop a domestic defense industrial base
6.1.2 Finnish defense sector is open to foreign direct investments
6.2 Market Entry Route
6.2.1 Budgeting Process
6.2.2 Procurement Policy and Process
6.2.3 Partnerships with domestic defense firms offer attractive market entry route
6.2.4 Foreign OEMs gain industry access through joint R&D programs
6.2.5 Foreign military sales to Finnish defense market
6.2.6 Collaborations provide market entry opportunities
6.3 Key Challenges
6.3.1 The Finnish Government prefers Nordic and European countries for defense trade
6.3.2 Defense budget deficit may lead to a reduction in the overall military budget

7 Competitive Landscape and Strategic Insights
7.1 Competitive Landscape Overview
7.2 Key Foreign Companies
7.2.1 Elektrobit Corporation: overview
7.2.2 Elektrobit Corporation: products
7.2.3 Elektrobit Corporation: recent announcements and strategic initiatives
7.2.4 Elektrobit Corporation: alliances
7.2.5 Elektrobit Corporation: recent contract wins
7.2.6 Kiitokori Oy: overview
7.2.7 Kiitokori Oy: products
7.2.8 Kiitokori Oy: recent announcements and strategic initiatives
7.2.9 Millog Oy: overview
7.2.10 Millog Oy: products and services
7.2.11 Millog Oy: recent announcements and strategic initiatives
7.2.12 Millog Oy: alliances
7.2.13 Millog Oy: recent contract wins
7.2.14 Nammo Lapua Oy: overview
7.2.15 Nammo Lapua Oy: products and services
7.2.16 Nammo Lapua Oy: recent announcements and strategic initiatives
7.2.17 Nammo Lapua Oy: recent contract wins
7.2.18 Patria: overview
7.2.19 Patria: products and services
7.2.20 Patria: recent announcements
7.2.21 Patria: Recent Contract Wins
7.2.22 Patria: alliances
7.2.23 Patricomp Oy: overview
7.2.24 Patricomp Oy: products and services
7.2.25 Patricomp Oy: recent announcements and strategic initiatives
7.2.26 Patricomp Oy: recent contract wins
7.2.27 Temet Oy: overview
7.2.28 Temet Oy: products

8 Business Environment and Country Risk
8.1 Economic Performance
8.1.1 GDP per capita at constant prices
8.1.2 GDP at current prices (US$)
8.1.3 Exports of goods and services (current Local Currency Units (LCU) billion)
8.1.4 Imports of goods and services (current LCU billion)
8.1.5 Gross national disposable income (US$ billion)
8.1.6 LCU 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 (LCU)
8.1.10 Goods exports as a percentage of GDP
8.1.11 Goods imports as a percentage of GDP
8.1.12 Services imports as a percentage of GDP
8.1.13 Service exports as a percentage of GDP
8.1.14 Foreign direct investment, net (Balance of Payments (BoP), current US$ billions)
8.1.15 Net foreign direct investment as % of GDP
8.1.16 Mining, Manufacturing, Utilities Output (LCU billion)

9 Appendix
9.1 Contact Us
9.2 About the Author
9.3 Disclaimer

List of Tables
Table 1: Finnish Army Strength
Table 2: Finnish Navy Strength
Table 3: Finnish Air Force Strength
Table 4: Finnish Ongoing Procurement Programs
Table 5: Finnish Future Procurement Programs
Table 6: Top Finnish Defense Procurement Programs by Value (US$ Million) 2018-2023
Table 7: Finnish Defense Expenditure (EUR Billion and US$ Billion), 2014-2023
Table 8: Finnish GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2014-2023
Table 9: Finnish Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 10: Finnish Defense Capital Expenditure (EUR Million and US$ Billion), 2014-2023
Table 11: Finnish Per Capita Defense Expenditure (US$), 2014-2023
Table 12: Finnish Homeland Security Expenditure (EUR Billion and US$ Billion), 2014-2023
Table 13: Terrorism Index, 2018
Table 14: Benchmarking with Key Markets: 2014-2018 vs. 2019-2023
Table 15: Top 10 Finnish Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 16: Offset Regulations in Finland
Table 17: Offset multiplier categories
Table 18: Finnish Budget Formation Timetable:
Table 19: Top Defense Suppliers in Finnish Defense Industry - By Value (US$ Million) 2018-2023
Table 20: Competitive Landscape in Finnish Defense Market
Table 21: Elektrobit Corporation - Product Focus
Table 22: Elektrobit Corporation - Alliances
Table 23: Elektrobit Corporation - Recent Contract Wins
Table 24: Kiitokori Oy- Product Focus
Table 25: Millog Oy - Product Focus
Table 26: Millog Oy - Alliances
Table 27: Millog Oy - Recent Contract Wins
Table 28: Nammo Lapua Oy - Product Focus
Table 29: Nammo Lapua Oy - Recent Contract Wins
Table 30: Patria - Product Focus
Table 31: Patria- Recent Contract Wins
Table 32: Patria- Alliances
Table 33: Patricomp Oy - Product Focus
Table 34: Patricomp Oy - Recent Contract Wins
Table 35: Temet Oy - Product Focus

List of Figures
Figure 1: Finnish Defense Expenditure (EUR Billion), 2014-2023
Figure 2: Finnish Defense Expenditure (US$ Billion), 2014-2023
Figure 3: Finnish GDP Growth vs. Defense Expenditure as Percentage of GDP, 2014-2023
Figure 4: Finnish Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 5: Finnish Capital Budget Allocation (EUR Million), 2014-2023
Figure 6: Finnish Capital Budget Allocation (US$ Billion), 2014-2023
Figure 7: Finnish Per Capita Defense Expenditure (US$), 2014-2023
Figure 8: Finnish Homeland Security Budget (EUR Billion), 2014-2023
Figure 9: Finnish Homeland Security Budget (US$ Billion), 2014-2023
Figure 10: Terrorism Heat Map, 2018
Figure 11: Terrorism Index, 2018
Figure 12: Benchmarking with Key Markets, 2014-2018 vs. 2019-2023
Figure 13: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2018 and 2023
Figure 14: Benchmarking with Large Defense Spenders as % of GDP - 2018
Figure 15: Fighters and Multi-Role Aircraft (US$ Million), 2018-2023
Figure 16: Land Based C4ISR (US$ Million), 2018-2023
Figure 17: Aircraft Simulation Systems (US$ Million), 2018-2023
Figure 18: Finnish Defense Procurements In Terms Of Their Supplier Relationships
Figure 19: Finnish Defense Imports (US$ million), 2012-2016
Figure 20: Finnish Defense Imports by Country (%), 2012-2016
Figure 21: Finnish Defense Imports by Category, 2012-2016
Figure 22: Finnish Defense Export Trend (US$ Million), 2012-2016
Figure 23: Finnish Defense Exports by Country (%), 2012-2016
Figure 24: Finnish Defense Exports by Category, 2012-2016
Figure 25: Industry Dynamics - Porter’s Five Forces Analysis
Figure 26: Finnish GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 27: Finnish GDP at Current Prices (US$ Billion), 2015-2025
Figure 28: Finnish Exports of Goods and Services (LCU Billion), 2005-2014
Figure 29: Finnish Imports of Goods and Services (LCU Billion), 2005-2014
Figure 30: Finnish Gross National Disposable Income (US$ Billion), 2005-2013
Figure 31: Finland LCU per US$, 2015-2024
Figure 32: Finnish Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 33: Finnish Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 34: Finnish Government Cash Surplus/Deficit as % of GDP (LCU), 2005-2012
Figure 35: Finland - Goods Exports as a % of GDP (%), 2005-2013
Figure 36: Finland- Goods Imports as a % of GDP (%), 2005-2013
Figure 37: Finnish Services Imports as a % of GDP (%), 2005-2013
Figure 38: Finnish Service Exports as a % of GDP (%), 2005-2013
Figure 39: Finland - Foreign Direct Investment, net (BoP, current US$ billion), 2005-2013
Figure 40: Finland- Net Foreign Direct Investment as a % of GDP, 2005-2013
Figure 41: Finnish Mining, Manufacturing, Utilities Output (LCU billion), 2005-2014

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  • Elektrobit Corporation
  • Kiitokori Oy
  • Millog Oy
  • Nammo Lapua Oy
  • Patria
  • Patricomp Oy
  • Temet Oy
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