Future of the Colombian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Summary
Colombia's drive towards economic prosperity, which was stifled by internal insurgencies from FARC (Revolutionary Armed Forces of Colombia) and ELN (National Liberation Army), is steadily returning to normalcy. The country successfully ended a five decade old conflict with FARC rebels in 2017; the justice deal between FARC and the government will alleviate pressure from the country.
The Colombian defense industry is expected to register steady growth over the next five years due to the rise of both external and internal security threats, along with the stabilization of the economy. Valued at US$11.1 billion in 2018, defense expenditure will increase at a CAGR of 5.69%.
The reasons behind the rise of military expenditure are the threats from Venezuela over political issues, internal insurgencies rising in the rebel forces, and the ongoing fight against drug trafficking. Increased defense expenditure is expected to be used for the purchase of helicopters, main battle tanks, UAVs, and air defense systems.
Although the country allocated an average of 1.8% of its GDP to defense; it is expected to allocate an average of 4.6% of its total defense budget to capital expenditure and the remaining 95.4% for revenue expenses. The share of capital expenditure is expected to decrease to an average of 3.3% of the country’s defense budget over the forecast period, with the remaining 96.7% being allocated to operating expenditure or revenue expenditure.
Future of the Colombian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.
This report offers detailed analysis of the Colombian 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 Colombian defense industry market size and drivers: detailed analysis of the Colombian 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 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 Colombian 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 Colombian 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 - Industria Militar, Sudamin S.A, Cotecmar and Bell
Scope
- The Colombian defense industry is expected to register steady growth over the next five years due to the rise of both external and internal security threats, along with the stabilization of the economy. Valued at US$11.1 billion in 2018.
- During the historic period, Colombia allocated an average of 4.6% of its total defense budget to capital expenditure and the remaining 95.4% for revenue expenses. The share of capital expenditure is expected to decrease to an average of 3.3% of the country’s defense budget over the forecast period, with the remaining 96.7% being allocated to operating expenditure or revenue expenditure.
- The MoD is expected to invest in Land-based physical security of critical infrastructure, frigates and land based C4ISR.
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Colombian 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 Colombian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
Table of Contents
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 and Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Social, Political and Economic Environment and Support for Defense Projects
3.1.6. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Colombian aggregate defense expenditure, inclusive of US military aid, is anticipated to post a CAGR of 5.61% over the forecast period
3.2.2. Colombian defense expenditure expected to reach US$15 billion by 2023
3.2.3. Internal threats from rebel groups, a strained relationship with Venezuela, and the development of the domestic industry are set to drive defense expenditure
3.2.4. Defense expenditure as a percentage of GDP expected to be 3.5% by 2023
3.3. Analysis of Defense Budget Allocation
3.3.1. Majority of defense budget to be allocated to revenue expenditure
3.3.2. Colombian to cumulatively allocate US$2.2 billion towards defense capital expenditure (excluding US aid) over the forecast period
3.3.3. Per capita defense expenditure to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security expenditure is expected to increase at a CAGR of 4.37% over the forecast period
3.4.2. High levels of crime and drug trafficking to increase homeland security expenditure
3.4.3. Terrorism Index rates indicate that Colombia is a “highly affected” region
3.4.4. Colombia scores 5.6 on the Terrorism Index
3.4.5. Colombia faces a moderate threat from foreign terrorist organizations
3.5. Benchmarking with Key Global Markets
3.5.1. Colombian defense expenditure is forecast to grow faster than many of the world’s largest global defense budgets
3.5.2. Colombian defense expenditure is one of the highest in South America
3.5.3. Colombia spends 3.4% of its GDP on defense
3.6. Market Opportunities: Key Trends and Drivers
3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023
3.6.2. Critical Infrastructure Protection (CIP) - Physical Security
3.6.3. Naval Vessels - Frigates
3.6.4. Land-Based C4ISR
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports have grown significantly over the last five years
4.1.2. US and Germany continue to be major arms suppliers
4.1.3. Aircraft account for the largest share of defense imports
4.2. Export Market Dynamics
4.2.1. Colombia is not a major defense exporting country
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of the supplier: low to medium
5.1.2. Bargaining power of the Buyer: high to medium
5.1.3. Barrier to entry: medium to high
5.1.4. Intensity of rivalry: low
5.1.5. Threat of Substitution: medium
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset guidelines are channeled to benefit industrial and social sectors
6.1.2. FDI in the defense sector is closed
6.2. Market Entry Route
6.2.1. Direct selling is the preferred market entry route for foreign OEMs
6.3. Key Challenges
6.3.1. Corruption, bribery, and influence of anti-state elements damages the credibility of the military
6.3.2. Low capital expenditure discourages both foreign and domestic firms
7. Competitive landscape and Strategic Insights
7.1. Competitive landscape Overview
7.2. Key Public Sector Companies
7.2.1. Industria Militar: Overview
7.2.2. Industria Militar: Major Products
7.2.3. Industria Militar: Recent Announcements and Strategic Initiatives
7.2.4. Industria Militar: Alliances
7.2.5. Industria Militar: Recent Contract Wins
7.3. Key Domestic and Foreign Private Sector Companies
7.3.1. Sudamin Aeronautica y Defensa S.A.: Overview
7.3.2. Sudamin Aeronautica y Defensa S.A.: Major Products and Services
7.3.3. Sudamin Aeronautica y Defensa S.A.: Recent Announcements and Strategic Initiatives
7.3.4. Sudamin Aeronautica y Defensa S.A.: Alliances
7.3.5. Cotecmar: Overview
7.3.6. Cotecmar: Major Products and Services
7.3.7. Cotecmar: Recent Announcements and Strategic Initiatives
7.3.8. Cotecmar: Alliances
7.3.9. Cotecmar: Recent Contract Wins
7.3.10. Bell: Overview
7.3.11. Bell : Defense Products and Services
7.3.12. Bell: Recent Announcements and Strategic Initiatives
7.3.13. Bell: Alliancess
7.3.14. Bell: Recent Contract Wins
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita (In US$)
8.1.2. GDP, Current Prices (US$ Billion)
8.1.3. Exports of Goods and Services, Current Prices (LCU Billion)
8.1.4. Imports of Goods and Services, Current Prices (LCU Billion)
8.1.5. Gross National Disposable Income
8.1.6. Local Currency Unit 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 % of GDP (LCU)
8.1.10. Goods Exports as a Percentage of GDP
8.1.11. Goods Imports as Percentage of GDP
8.1.12. Services Imports as a Percentage of GDP
8.1.13. Services 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
9. Appendix
9.1. About the Author
9.2. Disclaimer
List of Tables
Table 1: Colombian - Army Strength
Table 2: Colombian - Air Force Strength
Table 3: Colombian - Navy Strength
Table 4: Colombian - Ongoing Development and Procurement Programs, 2018
Table 5: Colombian - Future Procurement Programs, 2018
Table 6: Colombian Top Defense Procurement Programs by Value (US$ Million), 2018-2023
Table 7: Colombian - Defense Expenditure Including US Aid, 2014-2023
Table 8: Colombian - Defense Expenditure (COP Billion & US$ Billion), 2014-2023
Table 9: Colombian GDP Growth vs Defense Expenditure as a Percentage of GDP, 2014-2023
Table 10: Colombian - Defense Budget Allocation for Capital and Revenue Expenditure (%), 2014-2023
Table 11: Colombian - Defense Capital Expenditure, Excluding US Aid (COP Billion & US$ Billion), 2014-2023
Table 12: Colombian - Defense Expenditure as Per Capita Defense Spend (US$), 2014-2023
Table 13: Colombian Homeland Security Expenditure (COP Billion & US$ Billion), 2014-2023
Table 14: Terrorism Index, 2018
Table 15: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 16: Top Columbian Defense Sectors by Value (US$ Million), 2018-2023
Table 17: Offset Regulations in Colombia
Table 18: Competitive Landscape of the Colombian Defense Industry
Table 19: Top Defense Suppliers in the Colombian Defense Industry - By Value (US$ Million) 2018-2023
Table 20: Industria Militar - Major Products
Table 21: Industria Militar - Alliances
Table 22: Industria Militar - Recent Contract Wins
Table 23: Sudamin Aeronautica y Defensa S.A. - Major Products and Services
Table 24: Sudamin Aeronautica y Defensa S.A. - Alliances
Table 25: Cotecmar - Major Products and Services
Table 26: Cotecmar - Alliances
Table 27: Cotecmar - Recent Contract Wins
Table 28: Bell - Product Focus
Table 29: Bell - Alliances
Table 30: Bell - Recent Contract Wins
List of Figures
Figure 1: Colombian - US Military Aid (US$ Million), 2014-2023
Figure 2: Colombian - Defense Expenditure Including US Aid (US$ Billion), 2014-2023
Figure 3: Colombian - Defense Budget Excluding US Aid (US$ Billion) vs Defense Budget Including US Aid (US$ Billion), 2014-2023
Figure 4: Colombian Defense Expenditure (COP Billion), 2014-2023
Figure 5: Colombian Defense Expenditure (US$ Billion), 2014-2023
Figure 6: Colombian GDP Growth vs. Defense Expenditures Percentage of GDP Growth, 2014-2023
Figure 7: Colombian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 8: Colombian - Defense Capital Expenditure, Excluding US Aid (COP Billion), 2014-2023
Figure 9: Colombian - Defense Capital Expenditure, Excluding US Aid (US$ Million), 2014-2023
Figure 10: Colombian -Defense Expenditure as Per Capita Defense Spend (US$), 2014-2023
Figure 11: Colombian Homeland Security Expenditure (COP Billion),2014-2023
Figure 12: Colombian Homeland Security Expenditure (US$ 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$ Billion), 2018 and 2023
Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018
Figure 18: Colombia’s Fighters and Multi-Role Aircraft Market Size (US$ Million), 2018-2023
Figure 19: Colombia’s Naval Vessels - Frigates Market Size (US$ Million), 2018-2023
Figure 20: Colombia’s Land-based C4ISR Market Size (US$ Million), 2018-2023
Figure 21: Top Colombian Defense Procurements in Terms of Supplier Relationships
Figure 22: Colombian Defense Import TIV Value (US$ Million), 2013-2017
Figure 23: Colombian Defense Imports by Country (%), 2013-2017
Figure 24: Colombian Defense Imports by Category (%), 2013-2017
Figure 25: Industry Dynamics - Porter’s Five Forces Analysis
Figure 26: Colombian GDP Per Capita, 2015-2025
Figure 27: Colombian GDP at Current Prices (US$ Billion), 2015-2025
Figure 28: Colombian Exports of Goods and Services, Current Prices (LCU Billion), 2005-2014
Figure 29: Colombian Imports of Goods and Services, Current Prices (LCU Billion), 2003-2012
Figure 30: Colombian Gross National Disposable Income (US$ Billion), 2005-2013
Figure 31: Colombian Local Currency Unit Per US$ (period average), 2015-2024
Figure 32: Market Capitalization of Listed Companies in Colombia (US$ Billion), 2005-2012
Figure 33: Market Capitalization of Listed Companies in Colombia (% of GDP), 2005-2012
Figure 34: Government Cash Surplus/ Deficit as % of GDP (LCU), 2008-2012
Figure 35: Colombian Goods Exports as Percentage of GDP, 2005-2014
Figure 36: Colombian Goods Imports as Percentage of GDP, 2005-2014
Figure 37: Colombian Services Imports as Percentage of GDP, 2005-2014
Figure 38: Colombian Services Exports as a Percentage of GDP, 2005-2014
Figure 39: Colombian Foreign Direct Investment, net (BoP, current US$ Billion), 2005-2014
Figure 40: Colombian Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
Figure 41: Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014
Samples
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Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Industria Militar
- Sudamin S.A
- Cotecmar
- Bell
Methodology
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