Future of the Malaysian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

  • ID: 4758539
  • Report
  • Region: Malaysia
  • 126 pages
  • GlobalData
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FEATURED COMPANIES

  • AIROD Sdn Bhd
  • Boustead Naval Shipyard
  • D’Aquarian Sdn Bhd
  • Denel Land Systems
  • Leonardo Malaysia
  • SME Ordnance Sdn Bhd
  • MORE
Future of the Malaysian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

Malaysia, as per its 11th growth plan (2016-2020), has plans to focus on providing people with wellbeing and a sense of security. Malaysia’s defense budget for 2019 is US$3.4 billion, which decreased from US$4.6 billion in 2015 at a CAGR of -6.79% during the historic period. One of the major causes of this falling defense budget has been the lower percentage allocation of GDP towards the 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. The Malaysian government is attempting to implement substantial financial changes in an endeavor to bring balance to the economy.

Malaysian defense expenditure is expected to register a CAGR of 1.61% over the forecast period and reach a value of US$3.7 billion in 2024. The military’s modernization projects, the nation's investment in UN peacekeeping missions, and regional debates with neighboring nations, for example, Brunei over Limbang, Louisa, and Mariveles, Indonesia over Ambalat, the Philippines over Ardasier and Erica, and Thailand over Ko Kra and Ko Losin, were the major drivers deciding 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$18 billion over 2020-2024.

Due to the completion of some contracts in 2018-2019, procurements are expected to be lower in the short term. However, procurement levels will increase soon and this is expected to continue over the forecast period. For example, the Royal Malaysian Navy (RMN) has awarded a contract to the South Korean shipyard, Daewoo Shipbuilding & Marine Engineering (DSME), to build six missile surface corvettes which will be built and assembled in South Korea from 2018 onwards. Furthermore, as part of the 14th and 15th Malaysia Plan, the government plans to acquire two submarines by 2040 in accordance with the government’s "15 to 5" Transformation Plan, despite the fact that the course of events might be overhauled.

Malaysia’s homeland security (HLS) budget stands at US$2.8 billion in 2019, and is expected to reach US$3 billion in 2024 with a growth rate of 1.73% over 2020-2024. This expenditure is primarily driven by the need to curb drug smuggling, illegal immigration, and increasing criminal activities. The capital expenditure allocation, which stood at an average of 21.9% during the historic period, is expected to increase to reach an average of 22.9% over the forecast period.

The report "Future of the Malaysian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024", 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.

Companies mentioned: Leonardo Malaysia, Sukhoi, Denel Land Systems, SME Ordnance 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

In particular, it provides an in-depth analysis of the following -
  • The Malaysian defense industry market size and drivers: detailed analysis of the Belgian defense industry during 2020-2024, 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.
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years.
  • Market opportunities:list of the top ten defense investment opportunities over the next 5 years.
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Belgian defense industry.
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.
  • 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 Malaysian defense industry covering sections including demand drivers, key trends and latest industry contracts.
READ MORE
Note: Product cover images may vary from those shown
2 of 4

FEATURED COMPANIES

  • AIROD Sdn Bhd
  • Boustead Naval Shipyard
  • D’Aquarian Sdn Bhd
  • Denel Land Systems
  • Leonardo Malaysia
  • SME Ordnance Sdn Bhd
  • 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 & Strategy
3.1.3. Equipment of the Malaysian Military
3.1.4. Procurement Programs
3.1.5. Top Procurement Programs by Value (US$ Million) 2019-2024
3.1.6. Social, Political, and Economic Environment and 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$3.7 billion by 2024, at a CAGR of 1.61%
3.2.2. Modernization of the armed forces, participation in UN peacekeeping operations, and territorial disputes are the major drivers of the Malaysian defense industry
3.2.3. Defense budget as a percentage of GDP will average 0.96% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure allocation is expected to increase slightly over the forecast period
3.3.2. Malaysian capital expenditure on defense is expected to grow at a CAGR of 2.58% over the forecast period
3.3.3. Revenue expenditure forecast to increase at a CAGR of 1.32% over 2020-2024
3.3.4. Malaysia’s defense expenditure allocation on others is expected to remain highest over the forecast period
3.3.5. Budget allocation on others is expected to remain highest over the forecast period
3.3.6. Per capita defense expenditure is expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Malaysian homeland security expenditure is expected to grow at a CAGR of 1.73% over the forecast period
3.4.2. The homeland security expenditure in Malaysia is mainly driven by rising criminal activities and natural disasters
3.5. Benchmarking with Key Global Markets
3.5.1. Malaysian defense expenditure is expected to increase over the forecast period
3.5.2. Malaysian defense expenditure is lower than other Asian countries
3.5.3. The Malaysian defense budget as a percentage of GDP is expected to decline over the forecast period
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top 10 Defense Market Sectors by Value (US$ Million) - 2019-2024
3.6.2. Frigates
3.6.3. Physical Security
3.6.4. Corvettes

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 programs
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
6.4. Competitive Landscape and Strategic Insights
6.4.1. Competitive Landscape Overview
6.4.2. Malaysia’s Market Share Analysis, 2019-2024
6.5. Key Foreign Companies
6.5.1. Leonardo Malaysia: Overview
6.5.2. Leonardo Malaysia: Products
6.5.3. Leonardo Malaysia: Recent Announcements and Strategic Initiatives
6.5.4. Leonardo Malaysia: Alliances
6.5.5. Leonardo Malaysia: Recent Contract Wins
6.5.6. Sukhoi: Overview
6.5.7. Sukhoi: Products and Services
6.5.8. Sukhoi: Recent Contract Wins
6.5.9. Denel Land Systems: Overview
6.5.10. Denel Land Systems: Products
6.5.11. Denel Land Systems: Recent Announcements and Strategic Initiatives
6.5.12. Denel Land Systems: Alliances
6.5.13. Denel Land Systems: Recent Contract Wins
6.6. Key Public Sector Companies
6.6.1. SME Ordnance Sdn Bhd: Overview
6.6.2. SME Ordnance Sdn Bhd: Products
6.6.3. SME Ordnance Sdn Bhd: Recent Announcements and Strategic Initiatives
6.6.4. SME Ordnance Sdn Bhd: Alliances
6.6.5. SME Ordnance Sdn Bhd: Recent Contract Wins
6.6.6. SME Aerospace Sdn Bhd: Overview
6.6.7. SME Aerospace Sdn Bhd: Products
6.6.8. SME Aerospace Sdn Bhd: Recent Announcements and Strategic Initiatives
6.6.9. SME Aerospace Sdn Bhd: Recent Contract Wins
6.6.10. AIROD Sdn Bhd: Overview
6.6.11. AIROD Sdn Bhd: Products
6.6.12. AIROD Sdn Bhd: Recent Announcements and Strategic Initiatives
6.6.13. AIROD Sdn Bhd: Alliances
6.6.14. AIROD Sdn Bhd: Recent Contract Wins
6.7. Key Private Sector Companies
6.7.1. Boustead Naval Shipyard: Overview
6.7.2. Boustead Naval Shipyard: Products
6.7.3. Boustead Naval Shipyard: Alliances
6.7.4. Boustead Naval Shipyard: Recent Contract Wins
6.7.5. Sapura Thales Electronics Sdn Bhd: Overview
6.7.6. Sapura Thales Electronics Sdn Bhd: Products and Services
6.7.7. Sapura Thales Electronics Sdn Bhd: Recent Announcements and Strategic Initiatives
6.7.8. Sapura Thales Electronics Sdn Bhd: Alliances
6.7.9. Sapura Thales Electronics Sdn Bhd: Recent Contract Wins
6.7.10. DRB Hicom Defence Technologies Sdn Bhd: Overview
6.7.11. DRB Hicom Defence Technologies Sdn Bhd: Products
6.7.12. DRB Hicom Defence Technologies Sdn Bhd: Recent Announcements and Strategic Initiatives
6.7.13. DRB Hicom Defence Technologies Sdn Bhd: Alliances
6.7.14. DRB Hicom Defence Technologies Sdn Bhd: Recent Contract Wins
6.7.15. Labuan Shipyard & Engineering Sdn Bhd: Overview
6.7.16. Labuan Shipyard & Engineering Sdn Bhd: Products and Services
6.7.17. Labuan Shipyard & Engineering Sdn Bhd: Recent Announcements and Strategic Initiatives
6.7.18. Labuan Shipyard & Engineering Sdn Bhd: Alliances
6.7.19. Labuan Shipyard & Engineering Sdn Bhd: Recent Contract Wins
6.7.20. D’Aquarian Sdn Bhd: Overview
6.7.21. D’Aquarian Sdn Bhd: Products
6.7.22. D’Aquarian Sdn Bhd: 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 (% of GDP) (LCU)
7.1.10. Goods Exports (% of GDP)
7.1.11. Goods Imports (% of GDP)
7.1.12. Services Imports (% of GDP)
7.1.13. Service Exports (% of GDP)
7.1.14. Foreign Direct Investment, Net (BoP, current US$ Billion)
7.1.15. Net Foreign Direct Investment (% 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: Malaysian Armed Forces
Table 2: Malaysian Naval Forces
Table 3: Malaysian Air Force
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) 2019-2024
Table 7: Malaysian Defense Expenditure (MYR Billion & US$ Billion), 2015-2024
Table 8: Malaysian GDP Growth and Defense Expenditure as a Percentage of GDP Growth, 2015-2024
Table 9: Malaysian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Table 10: Malaysian Defense Capital Expenditure (MYR Billion and US$ Million), 2015-2024
Table 11: Malaysian Defense Revenue Expenditure, (MYR Billion and US$ Billion), 2015-2024
Table 12: Malaysian Defense Training Expenditure as a Percentage of Overall Budget and Values (MYR Billion)
Table 13: Malaysian Defense Budget Split Between Military Services (Army, Air Force, Navy and Others) (%), 2015-2024
Table 14: Malaysian Defense Budget in MYR Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Table 15: Malaysian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Table 16: Malaysian Per Capita Defense Expenditure (US$), 2015-2024
Table 17: Malaysian Homeland Security Expenditure (MYR Billion & US$ Billion), 2015-2025
Table 18: Benchmarking with Key Markets - 2015-2019 vs 2020-2024
Table 19: Top 10 Malaysian Defense Market Sectors by Value (US$ Million) - 2019-2024
Table 20 : Malaysian Defense Offset Regulations
Table 21: Market Entry by Key Foreign Companies
Table 22: Top 10 Defense Suppliers in the Malaysian Defense Industry - By Value (US$ Million) 2019-2024
Table 23: Competitive Landscape of the Malaysian Defense Industry
Table 24: Leonardo Malaysia - Products
Table 25: Leonardo Malaysia - Alliances
Table 26: Leonardo Malaysia - Recent Contract Wins
Table 27: Sukhoi - Products and Services
Table 28: Sukhoi - Recent Contract Wins
Table 29: Denel Land Systems - Products
Table 30: Denel Land Systems - Alliances
Table 31: Denel Land Systems - Recent Contract Wins
Table 32: SME Ordnance Sdn Bhd - Products
Table 33: SME Ordnance Sdn Bhd - Alliances
Table 34: SME Ordnance Sdn Bhd - Recent Contract Wins
Table 35: SME Aerospace Sdn Bhd - Products
Table 36: SME Aerospace Sdn Bhd - Recent Contract Wins
Table 37: AIROD Sdn Bhd - Products
Table 38: AIROD Sdn Bhd - Alliances
Table 39: AIROD Sdn Bhd - Recent Contract Wins
Table 40: Boustead Naval Shipyard - Products
Table 41: Boustead Naval Shipyard - Alliances
Table 42: Boustead Naval Shipyard - Recent Contract Wins
Table 43: Sapura Thales Electronics Sdn Bhd - Products and Services
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 - Products
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 - Products and Services
Table 50: Labuan Shipyard & Engineering Sdn Bhd - Alliances
Table 51: Labuan Shipyard & Engineering Sdn Bhd - Recent Contract Wins
Table 52: D’Aquarian Sdn Bhd - Products
Table 53: D’Aquarian Sdn Bhd - Recent Contract Wins

List of Figures
Figure 1: Malaysian Defense Budget: 2019 and 2024
Figure 2: Malaysian Defense Imports/Exports: 2013 and 2017
Figure 3: Malaysia’s Top Five Prospective Procurements/Developments
Figure 4: Malaysian National Security Threats
Figure 5: Malaysia’s Partner Countries for Defense Cooperation and Military Training
Figure 6: Malaysian Defense Expenditure (MYR Billion), 2015-2024
Figure 7: Malaysian Defense Expenditure (US$ Billion), 2015-2024
Figure 8: Malaysian GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015-2024
Figure 9: Malaysian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Figure 10: Malaysian Defense Capital Expenditure (MYR Billion), 2015-2024
Figure 11: Malaysian Defense Capital Expenditure (US$ Billion), 2015-2024
Figure 12: Malaysian Revenue Budget Allocation (MYR Billion), 2015-2025
Figure 13: Malaysian Revenue Budget Allocation (US$ Billion), 2015-2024
Figure 14: Malaysian Defense Budget Split Between Army, Air Force, Navy and Others, 2015-2024
Figure 15: Malaysian Defense Budget in MYR Billion - Breakdown by Services (Army, Air Force, Navy and Others) 2015-2024
Figure 16: Malaysian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Figure 17: Malaysian Per Capita Defense Expenditure (US$), 2015-2024
Figure 18: Malaysian Homeland Security Expenditure (MYR Billion), 2015-2024
Figure 19: Malaysian Homeland Security Expenditure (US$ Billion), 2015-2024
Figure 20: Benchmarking with Key Markets - 2015-2019 vs 2020-2024
Figure 21: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2019 and 2024
Figure 22: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
Figure 23: Frigates Market Size (US$ Million), 2019-2024
Figure 24: Physical Security Market Size (US$ Million), 2019-2024
Figure 25: Corvettes Market Size (US$ Million), 2019-2024
Figure 26: Malaysian Defense Procurements in Terms Of Their Supplier Relationships
Figure 27: Malaysian Defense Import Trend, 2013-2017 (TIV Values)
Figure 28: Malaysian Defense Imports by Country, 2013-2017 (TIV Values)
Figure 29: Malaysia Defense Imports by Category (%), 2013-2017
Figure 30: Industry Dynamics - Porter’s Five Forces Analysis
Figure 31: Malaysia Budgeting Process (Sample Graphical Representation)
Figure 32: Key Challenges in Malaysia Defense Market
Figure 33: Malaysia Market Share Analysis, 2019-2024
Figure 34: Malaysian GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 35: Malaysian GDP at Current Prices (US$ Billion), 2015-2025
Figure 36: Malaysian Exports of Goods and Services (LCU Billion), 2005-2014
Figure 37: Malaysian Imports of Goods and Services (LCU Billion), 2005-2014
Figure 38: Malaysian Gross National Disposable Income (US$ Billion), 2005-2014
Figure 39: Malaysian LCU per US$, 2015-2024
Figure 40: Malaysian Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 41: Malaysian Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 42: Malaysian Government Cash Surplus/Deficit (% of GDP) (LCU), 2005-2012
Figure 43: Malaysian Goods Exports (% of GDP), 2005-2013
Figure 44: Malaysian Goods Imports (% of GDP), 2005-2013
Figure 45: Malaysian Services Imports (% of GDP), 2005-2013
Figure 46: Malaysian Service Exports (% of GDP), 2005-2013
Figure 47: Malaysian Foreign Direct Investment, Net (BoP, Current US$ Billion), 2005-2013
Figure 48: Malaysian Net Foreign Direct Investment (% of GDP), 2005-2013
Figure 49: Malaysian Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014
Note: Product cover images may vary from those shown
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  • Leonardo Malaysia
  • Sukhoi
  • Denel Land Systems
  • SME Ordnance 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 4
Note: Product cover images may vary from those shown
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