Colombian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Colombian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

The brutal atrocities and insurgencies by two major armed militia groups - FARC and ELN have been a major concern for the Colombian government. In 2017, the government signed a peace accord with the FARC leadership to restore socio-economic stability in the country. However, approximately 1,200 FARC dissidents shied away from the accord and continued to pose a significant threat to national security.

Against this backdrop, it is prudent for Colombia to invest in the development and maintenance of a robust defense and security posture. With this trend expected to continue over the forecast period, Colombia's defense expenditure is anticipated to register a CAGR of 15.14% to value US$47.2 billion in 2024. As a percentage of GDP, the country's defense expenditure is expected to average 9.12% over the forecast period, compared to 4.02% recorded during the historic period.

During the historic period, the Colombian government allocated an average of 3.6% of its defense budget to capital expenditure, which includes both the purchase of new equipment and upgrade programs for existing equipment. The rest of the budget was allocated to revenue expenditure, which includes salaries, planning, administration and training expenditure. On a cumulative basis, Colombia allocated US$2.3 billion to capital expenditure over the historic period, which is anticipated to value US$5.9 billion over the forecast period. Capital expenditure is anticipated to increase at a CAGR of 14.67%, while revenue expenditure will increase at a CAGR of 15.23% during the forecast period.

The US has developed multiple programs supporting the Colombian government, to establish law enforcement in the most conflict-ridden and neglected rural areas of Colombia. These US programs also take into account various socio-economic aspects for the Colombian population, such as agrarian reforms, better educational opportunities, and a stable business environment to ensure continuous public as well as private investments. . However, manufacturers from Russia, France, Germany, and Israel are also gaining traction in the Colombian defense market.

Apart from this, Colombia also enjoys close defense cooperation with NATO, and is one of the organization's key partners in Latin America. In March 2013, NATO allies adopted a bespoke approach to cultivate close cooperation with Colombia in specific areas of common interest.

The report "Colombian Defense 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.

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

• The Colombian defense industry market size and drivers: detailed analysis of the Croatian 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 Colombian defense industry

Companies mentioned: Embraer S.A., Dassault Aviation, International Aero Engines, Textron Systems, Textron Systems

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. Colombia exhibits a complex security environment due to the presence of various extremist armed rebel forces.
• Moreover, the rise in drug trafficking and other public safety issues such as kidnapping and extortions has compelled the current administration to reshape its defense forces by procuring arms, main battle tanks, UAVs, and air defense systems. In 2018, outgoing president of Colombia - Juan Manuel Santos (2010-2018) signed an agreement with NATO, to become its global partner.
• This newly developed alliance is expected to enhance transparency in the arms and ammunition procurement process. Although the country allocated an average of 3.9% of its GDP for defense sector during the historic period, the majority of the budget was allocated to revenue expenditure, and this trend is expected to continue over 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 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, key trends and latest industry contracts.