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

  • ID: 4769313
  • Report
  • Region: Peru
  • 88 pages
  • GlobalData
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Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

The Peruvian defense budget is set to register a CAGR of 2.53% over the forecast period and reach US$2.6 billion in 2024. In 2019, Peru’s defense budget is US$2.3 billion registering a CAGR of 0.57% during the historic period. Active participation in peacekeeping missions, narco-terrorism, and defense sector reforms, the persistent threat from insurgent guerrilla organization Shining Path, border conflicts with Chile, and modernization initiatives drove defense expenditure over the historic period. The defense budget as a percentage of GDP is expected to decrease to an average of 0.84% in the forecast period, compared to an average of 1.04% during the historic period.

The capital expenditure allocation is expected to decrease to an average of 5.8% during the forecast period which stood at an average of 9.9% during the historic period. Procurements that are expected to account for capital expenditure over the forecast period include frigates, multi-role aircraft, submarines, and main battle tanks (MBTs), TGS-MIL & TGM MIL, and BTR-82 APC among others. Consequently, the remaining budget will be allocated to personnel salaries, development programs for military personnel, and training.

Peruvian homeland security (HLS) expenditure is US$3.1 billion in 2019 and is expected to grow at a CAGR of 4.44% over the forecast period to reach US$4.0 billion in 2024. The budget of homeland security will be driven by police reforms and modernization, as well as the need to curb cocaine trafficking and organized crime.

Between 2014 and 2018, South Korea emerged as the largest supplier of military hardware to Peru, with a share of 33.9% of total defense imports, followed by Russia and Italy with 21.8% and 14.0% respectively. Aircraft accounted for the majority of defense imports with a share of 39.5% during the period 2014-2018. During the period 2014-2018, Peru acquired 32 Piranha APC, 16 MM-40-3 Exocet anti-ship SSM, 175 Spike-ERanti tank missile and C-27J Spartan transport aircraft. Other ongoing contracts include TGS and TGM MIL Rheinmetall MAN Military Vehicles and the modernization of four HDW 209/1200-class submarines.

The report "Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024", offers a detailed analysis of the Peruvian 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 defense industry market size and drivers: detailed analysis of the Peruvian 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
  • Porter’s Five Force analysis of the Peruvian 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
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Peruvian 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: Los Servicios Industriales de la Marina (SIMA), The Army Ammunition Factory (FAME), Desarrollos Industriales Casanave.

Scope
  • In 2019, Peru’s defense budget is US$2.3 billion registering a CAGR of 0.57% during the historic period. Active participation in peacekeeping missions, narco-terrorism, and defense sector reforms, the persistent threat from insurgent guerrilla organization Shining Path, border conflicts with Chile, and modernization initiatives drove defense expenditure over the historic period.
  • The country’s defense expenditure is anticipated to value US$2.6 billion in 2024 and register a CAGR of 2.53% over the forecast period. The defense budget as a percentage of GDP is expected to decrease to an average of 0.84% in the forecast period, compared to an average of 1.04% during the historic period.
Reasons to Buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Peruvian 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 Peruvian 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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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. Procurement Programs
3.1.3.1. Ongoing Procurement Programs
3.1.3.2. Future Procurement Programs
3.1.3.3. Top Procurement Programs by Value (US$ million) 2019-2024
3.1.4. Geopolitical, social, and economic scenario
3.1.5. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Defense expenditure to grow at a CAGR of 2.53% over the forecast period
3.2.2. Threat of narco-terrorism, defense reforms and modernization, border disputes, and peacekeeping operations to drive defense expenditure
3.2.3. Defense budget as a percentage of GDP is anticipated to average 0.8% during the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Revenue expenditure accounts for the majority of the Peruvian defense budget
3.3.2. Peruvian defense capital expenditure is expected to grow at a CAGR of 3.14% during the forecast period
3.3.3. Per capita defense expenditure expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security expenditure is expected to grow at a CAGR of 4.44% during the forecast period
3.4.2. Measures to prevent cocaine trafficking and organized crime to drive HLS expenditure
3.5. Benchmarking with Key Global Markets
3.5.1. Peruvian defense budget expected to register marginal growth over the forecast period
3.5.2. Peru’s military expenditure is limited compared to countries with the largest defense expenditure
3.5.3. Peru allocates a low percentage of GDP to defense
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2019-2024
3.6.2. Critical Infrastructure Protection (CIP)-Physical Security
3.6.3. Military Transport Aircraft
3.6.4. Frigates

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports expected to increase during the forecast period
4.1.2. South Korea to account for the majority of Peru’s defense imports during the forecast period
4.1.3. Aircraft and naval vessels are the most imported military hardware

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. Barriers to Entry: Medium
5.1.4. Intensity of Rivalry: Medium to High
5.1.5. Threat of Substitution: Medium to High

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Budgeting process
6.1.2. Procurement Policy and Process
6.1.3. Offset policy aids development of domestic defense industry
6.1.4. Peru allows 100% FDI in the defense industry
6.2. Market Entry Route
6.2.1. The country’s biennial defense exhibition provides an attractive entry route
6.2.2. Direct selling is the preferred market entry route for foreign OEMs
6.3. Key Challenges
6.3.1. Small defense budget and infrastructure challenge limits the market entry of foreign companies
6.3.2. Lack of transparency hampers the growth of the Peruvian defense industry

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Peruvian Market Share Analysis, 2019-2024
7.3. Key Domestic Companies
7.3.1. Los Servicios Industriales de la Marina (SIMA): Overview
7.3.2. Los Servicios Industriales de la Marina (SIMA): Products and Services
7.3.3. Los Servicios Industriales de la Marina (SIMA): Recent Announcements and Strategic Initiatives
7.3.4. Los Servicios Industriales de la Marina (SIMA): Alliances
7.3.5. Los Servicios Industriales de la Marina (SIMA): Recent Contract Wins
7.3.6. The Army Ammunition Factory (FAME): Overview
7.3.7. The Army Ammunition Factory (FAME): Products and Services
7.3.8. The Army Ammunition Factory (FAME): Recent Announcements and Strategic Initiatives
7.3.9. Desarrollos Industriales Casanave: Overview
7.3.10. Desarrollos Industriales Casanave: Products and Services
7.3.11. Desarrollos Industriales Casanave: Recent Announcements and Strategic Initiatives
7.3.12. Desarrollos Industriales Casanave: Alliances

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita (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 (US$ billion)
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 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. 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 LCU Billion

9. Appendix
9.1. About the Author
9.2. Disclaimer

List of Tables
  • Table 1: Peruvian - Ongoing Development and Procurement Programs (US$ Million), 2014-2019
  • Table 2: Peruvian - Future Procurement Programs
  • Table 3: Peruvian- Top Five Defense Procurement Programs by Value (US$ Million), 2019-2024
  • Table 4: Peruvian Defense Expenditure (PEN Billion and US$ Billion), 2015-2024
  • Table 5: Peruvian GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
  • Table 6: Peruvian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
  • Table 7: Peruvian Defense Capital Expenditure (PEN Million and US$ Million), 2015-2024
  • Table 8: Peruvian Per Capita Defense Expenditure (US$), 2015-2024
  • Table 9: Peruvian Homeland Security Expenditure (PEN Billion and US$ billion), 2015-2024
  • Table 10: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
  • Table 11: Top Peru Defense Sectors by Value (US$ Million), 2019-2024
  • Table 12: Defense Offset Regulations in Peru
  • Table 13: Competitive Landscape of the Peruvian Defense Industry
  • Table 14: Top Defense Suppliers in Peruvian Defense Industry By Value (US$ Million), 2019-2024
  • Table 15: Los Servicios Industriales de la Marina (SIMA) - Products and Services
  • Table 16: Los Servicios Industriales de la Marina (SIMA) - Alliances
  • Table 17: Los Servicios Industriales de la Marina (SIMA) - Recent Contract Wins
  • Table 18: The Army Ammunition Factory (FAME) - Product Focus
  • Table 19: Desarrollos Industriales Casanave - Product Focus
  • Table 20: Desarrollos Industriales Casanave - Alliances
List of Figures
  • Figure 1: Peruvian Defense Budget: 2020 and 2024
  • Figure 2: Peruvian Defense Imports: 2014 and 2018
  • Figure 3: Peruvian Top Prospective Procurements/Developments
  • Figure 4: Peruvian National Security Threats
  • Figure 5: Peruvian Partnering Countries for Defense Cooperation and Military Training
  • Figure 6: Peruvian Defense Expenditure (PEN Billion), 2015-2024
  • Figure 7: Peruvian Defense Expenditure (US$ Billion), 2015-2024
  • Figure 8: Peruvian GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
  • Figure 9: Peruvian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
  • Figure 10: Peruvian Capital Budget Allocation (PEN Million), 2015-2024
  • Figure 11: Peruvian Capital Budget Allocation (US$ Million), 2015-2024
  • Figure 12: Peruvian Per Capita Defense Expenditure (US$), 2015-2024
  • Figure 13: Peruvian Homeland Security Budget (PEN Billion), 2015-2024
  • Figure 14: Peruvian Homeland Security Budget (US$ Billion), 2015-2024
  • Figure 15: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
  • Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2019 and 2024
  • Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
  • Figure 18: Physical Security-Critical Infrastructure Protection Market Size (US$ Million), 2019-2024
  • Figure 19: Military Transport Aircraft Market Size (US$ Million), 2019-2024
  • Figure 20: Frigates Market Size (US$ Million), 2019-2024
  • Figure 21: Peruvian Defense Import Trend, 2014-2018 (TIV values)
  • Figure 22: Peruvian Defense Imports by Country (%), 2014-2018
  • Figure 23: Peruvian Defense Imports by Category (%), 2014-2018
  • Figure 24: Industry Dynamics - Porter’s Five Forces Analysis
  • Figure 25: Peruvian Budgeting Process
  • Figure 26: Peruvian Market Share Analysis, 2019-2024
  • Figure 27: Peruvian GDP Per Capita (US$), 2015-2025
  • Figure 28: Peruvian GDP at Current Prices (US$ Billion), 2015-2025
  • Figure 29: Peruvian Exports of Goods and Services, Current Prices (LCU Billion), 2005-2014
  • Figure 30: Peruvian Imports of Goods and Services, Current Prices (LCU Billion), 2005-2014
  • Figure 31: Peruvian Gross National Disposable Income (US$ billion) 2007-2014
  • Figure 32: Local Currency Unit per US$, 2015-2024
  • Figure 33: Market Capitalization of Listed Companies in Peru (US$ Billion), 2005-2012
  • Figure 34: Market Capitalization of Listed Companies in Peru (% of GDP), 2005-2012
  • Figure 35: Peruvian Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2012
  • Figure 36: Peruvian Goods Exports as a % of GDP, 2005-2013
  • Figure 37: Peruvian Goods Imports as a % of GDP, 2005-2013
  • Figure 38: Peruvian Services Imports as a % of GDP, 2005-2013
  • Figure 39: Peruvian Services Exports as a % of GDP, 2005-2013
  • Figure 40: Peruvian Foreign Direct Investment, Net (BoP, Current US$ Billion), 2005-2013
  • Figure 41: Peruvian Net Foreign Direct Investment as a % of GDP, 2005-2013
  • Figure 42: Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014
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  • Los Servicios Industriales de la Marina (SIMA)
  • The Army Ammunition Factory (FAME)
  • Desarrollos Industriales Casanave
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