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

  • ID: 4531961
  • Report
  • Region: Malaysia
  • 121 Pages
  • Strategic Defence Intelligence
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FEATURED COMPANIES

  • AIROD Sdn Bhd
  • Boustead Naval Shipyard
  • D’Aquarian Sdn Bhd.
  • Denel Land Systems
  • Leonardo Malaysia,
  • SME Aerospace Sdn Bhd
  • MORE

The defense budget of Malaysia for the year 2018 is around US$4 billion, which decreased from US$5 billion in 2014 at a CAGR of about -4.9% during the historic period. One of the major causes for this falling defense budget has been the lower percentage allocation of GDP towards defense sector. Malaysia has also postponed some of its new procurement programs and is increasingly favoring the modernization of its current equipment to cut costs. This is part of attempts being made by the Malaysian government to bring in economic reforms and stabilize the economy. Malaysia has also released its 11th growth plan, wherein plans for achieving economic growth have been well drafted. It is expected that with the implementation of the plans the country’s GDP will rise. The GDP of the country is forecasted to grow at a CAGR of over 9% and reach a value of around US$530 billion by 2023.

The modernization and procurement programs of the armed forces, the country’s participation in UN peacekeeping missions, and territorial disputes with neighboring countries such as Brunei over Limbang, Louisa, and Mariveles, Indonesia over Ambalat, the Philippines over Ardasier and Erica, and Thailand over Ko Kra and Ko Losin, drove the Malaysian defense expenditure during the historic period. With this trend expected to continue over the forecast period, the country is projected to cumulatively spend US$83.9 billion over 2019-2023.

The capital expenditure allocation, which stood at an average of 21% during the historic period, is expected to increase slightly to reach an average of about 21.2% over the forecast period, primarily due to the procurement of aircrafts, corvettes, and armored vehicles. Revenue expenditure is projected to remain at an average of over 78% over the forecast period which will be directed towards additional recruitment, training, and development programs for military personnel.

Malaysia’s homeland security (HLS) budget stands at around US$2.5 billion in 2018, and is estimated to reach about US$2.9 billion by 2023 at a growth rate of over 2.4% over 2019-2023. This expenditure is primarily driven by the need to curb drug smuggling, illegal immigration, and increasing criminal activities in the country.

The report "Future of the Malaysian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023" offers detailed analysis of the Malaysian defense industry with market size forecasts covering the next five years.

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

  • Market opportunity and attractiveness: detailed analysis of the current industry size and growth expectations during 2019-2023, including highlights of the key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
  • Procurement dynamics: trend analysis of imports and exports, together with their implications and impact on the Malaysian defense industry.
  • Industry structure: five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
  • Market entry strategy: analysis of 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.
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the defense industry in Malaysia, providing an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
  • Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk.

Companies mentioned in this report: Leonardo Malaysia, Sukhoi, Denel Land Systems, SME Ordnance Sdn Bhd, SME Aerospace Sdn Bhd, AIROD Sdn Bhd, Boustead Naval Shipyard, Sapura Thales Electronics Sdn Bhd, DRB Hicom Defence Technologies Sdn Bhd, Labuan Shipyard & Engineering Sdn Bhd, D’Aquarian Sdn Bhd.

Scope

  • The defense budget of Malaysia for the year 2018 is US$4 billion, which decreased from US$5 billion in 2014 at a CAGR of -4.97% during the historic period. - One of the major causes for this falling defense budget has been the lower percentage allocation of GDP towards defense sector.
  • Malaysia has also postponed some of its new procurement programs and is increasingly favoring the modernization of its current equipment to cut costs. - This is part of attempts by the Malaysian government to bring in economic reforms and stabilize the economy.
  • Malaysia has also released its 11th growth plan, wherein plans for achieving economic growth have been well drafted.
  • It is expected that with the implementation of the plans the country’s GDP will rise. The GDP of the country is forecasted to grow at a CAGR of 9.24% and reach a value of US$534.1 billion by 2023.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Malaysian 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
  • Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector
  • A deep qualitative analysis of the Malaysian defense industry covering sections including demand drivers, Key Trends , and latest industry contracts
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Note: Product cover images may vary from those shown
2 of 5

FEATURED COMPANIES

  • AIROD Sdn Bhd
  • Boustead Naval Shipyard
  • D’Aquarian Sdn Bhd.
  • Denel Land Systems
  • Leonardo Malaysia,
  • SME Aerospace Sdn Bhd
  • 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. Top Procurement Programs by Value (US$ Million) 2018-2023
3.1.6. Social, Political, and Economic Environment & Support for Defense Projects
3.1.7. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. The Malaysian defense budget is expected to reach US$4.5 billion by 2023, at a CAGR of 2.53%
3.2.2. Modernization of the armed forces, participation in UN peacekeeping operations, and territorial disputes are the major drivers of the Malaysian defense industry
3.2.3. Defense budget as a percentage of GDP will average 0.96% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure allocation is expected to increase slightly over the forecast period
3.3.2. The Malaysian defense capital expenditure is expected to grow at a CAGR of 2.90%, over the forecast period
3.3.3. Defense expenditure allocation on Others is expected to remain highest over the forecast period
3.3.4. Budget allocation on others is expected to remain highest over the forecast period
3.3.5. Per capita defense expenditure is expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Malaysian homeland security expenditure is expected to grow at a CAGR of 2.46% over the forecast period
3.4.2. The homeland security expenditure in Malaysia is mainly driven by rising criminal activities and natural disasters
3.4.3. Malaysia is “moderately affected” by terrorism
3.4.4. Malaysia faces “moderate risk” from acts of terrorism
3.4.5. Malaysia has a terrorism index score of “3.3”
3.5. Benchmarking with Key Global Markets
3.5.1. Malaysian defense expenditure is expected to increase over the forecast period
3.5.2. Malaysian defense expenditure is lower than other Asian countries
3.5.3. The Malaysian defense budget as a percentage of GDP is expected to decline over the forecast period
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top 10 Defense Market Sectors by Value (US$ Million) - Projections over the period 2018-2023
3.6.2. Multi-Role Aircraft
3.6.3. Physical Security
3.6.4. Land-based C4ISR

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Malaysian defense imports are expected to increase over the forecast period
4.1.2. Spain and France to remain the key arms suppliers to Malaysia
4.1.3. Aircraft accounted for the majority of imports during 2013-2017
4.2. Export Market Dynamics
4.2.1. Negligible defense exports for Malaysia

5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: low
5.1.2. Bargaining power of buyer: medium to high
5.1.3. Barrier to entry: medium
5.1.4. Intensity of rivalry: medium to high
5.1.5. Threat of substitution: Medium

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. The Malaysian defense industry is largely driven by the government’s offset policy
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy and Process
6.2.3. Entry through technology transfer program
6.2.4. Entry through partnerships with domestic defense companies
6.2.5. Defense exhibitions can be used as a direct entry route into the Malaysian defense industry in the form of Exports
6.3. Key Challenges
6.3.1. Negligible defense exports pose a challenge for domestic defense companies
6.3.2. Limited defense budget discourages investors from market entry
6.3.3. Corruption and a lack of transparency impede the growth of Malaysia’s defense industry
6.3.4. Malaysia’s new economic policy (NEP) limits the entry of foreign investors

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Foreign Companies
7.2.1. Leonardo Malaysia: Overview
7.2.2. Leonardo Malaysia: Products and services
7.2.3. Leonardo Malaysia: Recent announcements and strategic initiatives
7.2.4. Leonardo Malaysia: alliances
7.2.5. Leonardo Malaysia: recent contract wins
7.2.6. Sukhoi: Overview
7.2.7. Sukhoi: Products and services
7.2.8. Sukhoi: recent contract wins
7.2.9. Denel Land Systems: Overview
7.2.10. Denel Land Systems: Products and services
7.2.11. Denel Land Systems: Recent announcements and strategic initiatives
7.2.12. Denel Land Systems: alliances
7.2.13. Denel Land Systems: recent contract wins
7.3. Key Public Sector Companies
7.3.1. SME Ordnance Sdn Bhd: overview
7.3.2. SME Ordnance Sdn Bhd: products and services
7.3.3. SME Ordnance Sdn Bhd: Recent announcements and strategic initiatives
7.3.4. SME Ordnance Sdn Bhd: Alliances
7.3.5. SME Ordnance Sdn Bhd: recent contract wins
7.3.6. SME Aerospace Sdn Bhd: Overview
7.3.7. SME Aerospace Sdn Bhd: Products and services
7.3.8. SME Aerospace Sdn Bhd: Recent announcements and strategic initiatives
7.3.9. SME Aerospace Sdn Bhd: Recent contract wins
7.3.10. AIROD Sdn Bhd: Overview
7.3.11. AIROD Sdn Bhd: Products and services
7.3.12. AIROD Sdn Bhd: Recent announcements and strategic initiatives
7.3.13. AIROD Sdn Bhd: Alliances
7.3.14. AIROD Sdn Bhd: Recent contract wins
7.4. Key Private Sector Companies
7.4.1. Boustead Naval Shipyard: Overview
7.4.2. Boustead Naval Shipyard: Products and services
7.4.3. Boustead Naval Shipyard: Alliances
7.4.4. Boustead Naval Shipyard: Recent contract wins
7.4.5. Sapura Thales Electronics Sdn Bhd: Overview
7.4.6. Sapura Thales Electronics Sdn Bhd: Products and services
7.4.7. Sapura Thales Electronics Sdn Bhd: Recent announcements and strategic initiatives
7.4.8. Sapura Thales Electronics Sdn Bhd: Alliances
7.4.9. Sapura Thales Electronics Sdn Bhd: Recent contract wins
7.4.10. DRB Hicom Defence Technologies Sdn Bhd: Overview
7.4.11. DRB Hicom Defence Technologies Sdn Bhd: Products and services
7.4.12. DRB Hicom Defence Technologies Sdn Bhd: Recent announcements and strategic initiatives
7.4.13. DRB Hicom Defence Technologies Sdn Bhd: Alliances
7.4.14. DRB Hicom Defence Technologies Sdn Bhd: Recent contract wins
7.4.15. Labuan Shipyard & Engineering Sdn Bhd: overview
7.4.16. Labuan Shipyard & Engineering Sdn Bhd: products and services
7.4.17. Labuan Shipyard & Engineering Sdn Bhd: recent announcements and strategic initiatives
7.4.18. Labuan Shipyard & Engineering Sdn Bhd: alliances
7.4.19. Labuan Shipyard & Engineering Sdn Bhd: recent contract wins
7.4.20. D’Aquarian Sdn Bhd: Overview
7.4.21. D’Aquarian Sdn Bhd: Products and services
7.4.22. D’Aquarian Sdn Bhd: Recent contract wins

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. Nominal GDP per capita
8.1.2. GDP at current prices (US$)
8.1.3. Exports of Goods and Services (Current LCU Billion)
8.1.4. Imports of Goods and Services (Current LCU Billion)
8.1.5. Gross National Disposable Income (US$ 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 (BoP, current US$ billion)
8.1.15. Net foreign direct investment as a percentage of GDP
8.1.16. Mining, Manufacturing, Utilities Output (LCU Billion)

9. Appendix

List of Tables:
Table 1: Malaysian Army Strength
Table 2: Malaysian Air Force Strength
Table 3: Malaysian Navy Strength
Table 4: Malaysian - Ongoing Development and Procurement Programs
Table 5: Malaysian - Future Procurement Programs
Table 6: Top Malaysian Defense Procurement Programs by Value (US$ Million) 2018-2023
Table 7: Malaysian Defense Expenditure (MYR Billion & US$ Billion), 2014-2023
Table 8: Malaysian GDP Growth and Defense Expenditure as a Percentage of GDP Growth, 2014-2023
Table 9: Malaysian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 10: Malaysian Defense Capital Expenditure (MYR Billion and US$ Million), 2014-2023
Table 11: Malaysian Defense Budget Split Between Military Services (Army, Air Force, Navy and Others) (%), 2014-2023
Table 12: Malaysian Defense Budget in MYR Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023
Table 13: Malaysian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023
Table 14: Malaysian Per Capita Defense Expenditure (US$), 2014-2023
Table 15: Malaysian Homeland Security Expenditure (MYR Billion & US$ Billion), 2014-2023
Table 16: Terrorism Index, 2018
Table 17: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 18: Top 10 Malaysian Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 19: Malaysian Defense Offset Regulations
Table 20: Malaysian Budget Formation Timetable
Table 21: Market Entry by Key Foreign Companies
Table 22: Top 10 Defense Suppliers in The Nigerian Defense Industry - By Value (US$ Million) 2018-2023
Table 23: Competitive Landscape of the Malaysian Defense Industry
Table 24: Leonardo Malaysia - Product Focus
Table 25: Leonardo Malaysia - Alliances
Table 26: Leonardo Malaysia - Recent Contract Wins
Table 27: Sukhoi - Product Focus
Table 28: Sukhoi - Recent Contract Wins
Table 29: Denel Land Systems - Product Focus
Table 30: Denel Land Systems - Alliances
Table 31: Denel Land Systems - Recent Contract Wins
Table 32: SME Ordnance Sdn Bhd - Product Focus
Table 33: SME Ordnance Sdn Bhd - Alliances
Table 34: SME Ordnance Sdn Bhd - Recent Contract Wins
Table 35: SME Aerospace Sdn Bhd - Product Focus
Table 36: SME Aerospace Sdn Bhd - Recent Contract Wins
Table 37: AIROD Sdn Bhd - Product Focus
Table 38: AIROD Sdn Bhd - Alliances
Table 39: AIROD Sdn Bhd - Recent Contract Wins
Table 40: Boustead Naval Shipyard - Product Focus
Table 41: Boustead Naval Shipyard - Alliances
Table 42: Boustead Naval Shipyard - Recent Contract Wins
Table 43: Sapura Thales Electronics Sdn Bhd - Product Focus
Table 44: Sapura Thales Electronics Sdn Bhd - Alliances
Table 45: Sapura Thales Electronics Sdn Bhd - Recent Contract Wins
Table 46: DRB Hicom Defence Technologies Sdn Bhd - Product Focus
Table 47: DRB Hicom Defence Technologies Sdn Bhd - Alliances
Table 48: DRB Hicom Defence Technologies Sdn Bhd - Recent Contract Wins
Table 49: Labuan Shipyard & Engineering Sdn Bhd - Product Focus
Table 50: Labuan Shipyard & Engineering Sdn Bhd - Alliances
Table 51: Labuan Shipyard & Engineering Sdn Bhd - Recent Contract Wins
Table 52: D’Aquarian Sdn Bhd - Product Focus
Table 53: D’Aquarian Sdn Bhd - Recent Contract Wins

List of Figures:
Figure 1: Malaysian Defense Expenditure (MYR Billion), 2014-2023
Figure 2: Malaysian Defense Expenditure (US$ Billion), 2014-2023
Figure 3: Malaysian GDP Growth vs. Defense Expenditure as Percentage of GDP, 2014-2023
Figure 4: Malaysian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 5: Malaysian Defense Capital Expenditure (MYR Billion), 2014-2023
Figure 6: Malaysian Defense Capital Expenditure (US$ Million), 2014-2023
Figure 7: Malaysian Defense Budget Split Between Army, Navy, Air Force and Others, 2014-2023
Figure 8: Malaysian Defense Budget in MYR Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023
Figure 9: Malaysian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023
Figure 10: Malaysian Per Capita Defense Expenditure (US$), 2014-2023
Figure 11: Malaysian Homeland Security Expenditure (MYR Billion), 2014-2023
Figure 12: Malaysian Homeland Security Expenditure (US$ Billion), 2014-2023
Figure 13: Terrorism Heat Map, 2018
Figure 14: Terrorism Index, 2018
Figure 15: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billions), 2018 and 2023
Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018
Figure 18: Multi-role Aircraft Market Size (US$ Million), 2018-2023
Figure 19: Physical Security Market Size (US$ Million), 2018-2023
Figure 20: Land-based C4ISR Market Size (US$ Million), 2018-2023
Figure 21: Malaysian Defense Procurements in Terms Of Their Supplier Relationships
Figure 22: Malaysian Defense Import Trend, 2013-2017 (TIV values)
Figure 23: Malaysian Defense Import by Country, 2013-2017 (TIV values)
Figure 24: Malaysia Defense Imports by Category (%), 2013-2017
Figure 25: Industry Dynamics - Porter’s Five Forces Analysis
Figure 26: Malaysian GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 27: Malaysia - GDP at Current Prices (US$ Billion), 2015-2025
Figure 28: Malaysian Exports of Goods and Services (LCU Billion), 2005-2014
Figure 29: Malaysian Imports of Goods and Services (LCU Billion), 2005-2014
Figure 30: Malaysian Gross National Disposable Income (US$ Billion), 2005-2014
Figure 31: Malaysia LCU per US$, 2015-2024
Figure 32: Malaysian Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 33: Malaysian market capitalization of listed companies (% of GDP), 2005-2012
Figure 34: Malaysian Government cash surplus/deficit as % of GDP (LCU), 2005-2012
Figure 35: Malaysia - Goods exports as a % of GDP (%), 2005-2013
Figure 36: Malaysia - Goods imports as a % of GDP (%), 2005-2013
Figure 37: Malaysian Services imports as a % of GDP (%), 2005-2013
Figure 38: Malaysia Service exports as a % of GDP (%), 2005-2013
Figure 39: Malaysia - Foreign direct investment, net (BoP, current US$ Billion), 2005-2013
Figure 40: Malaysian Net foreign direct investment as % of GDP, 2005-2013
Figure 41: Malaysian Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014

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  • Leonardo Malaysia,
  • Sukhoi
  • Denel Land Systems
  • SME Ordnance Sdn Bhd
  • SME Aerospace Sdn Bhd
  • AIROD Sdn Bhd
  • Boustead Naval Shipyard
  • Sapura Thales Electronics Sdn Bhd
  • DRB Hicom Defence Technologies Sdn Bhd
  • Labuan Shipyard & Engineering Sdn Bhd
  • D’Aquarian Sdn Bhd.
Note: Product cover images may vary from those shown
5 of 5
Note: Product cover images may vary from those shown
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