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South African Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

  • ID: 4850683
  • Report
  • Region: Africa, South Africa
  • 114 pages
  • GlobalData
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1 of 3

FEATURED COMPANIES

  • Aerosud
  • Ansys Limited
  • Denel
  • Global Armour
  • IVEMA
  • Milkor
  • MORE
South African Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

The South African defense budget is anticipated to value US$4.3 billion by 2024, growing at a CAGR of 3.10%. South Africa’s military expenditure stands at US$3.6 billion in 2019 and is anticipated to grow from US$3.8 billion in 2020 to value US$4.3 billion in 2024, registering a CAGR of 3.10% over the forecast period. The growth will primarily be fueled by the country’s active participation in peacekeeping operations governed by the UN (United Nations), African Union, and the Southern African Development Community (SADC).

During 2015-2019, the capital expenditure allocation averaged 28.9% and is anticipated to marginally increase to an average of 29.6% over the forecast period. Consequently, over the forecast period, revenue expenditure is also expected to remain nearly the same at an average of 70.4%. During 2015-2019, the defense budget as a percentage of GDP is expected to decrease marginally from an average of 1.03% to 0.91% over 2020-2024. The country’s per capita defense expenditure is expected to increase from US$64 in 2020 to US$67.9 in 2024.

South African homeland security expenditure is expected to value US$7.4 billion in 2020 and is anticipated to grow at a CAGR of 4.50% to reach US$8.8 billion in 2024. This expenditure is primarily driven by South Africa’s focus on enhancing its defense capabilities to counter high violent crime rates and rising threats of global terrorism. The HLS budget is anticipated to be invested into the procurement of surveillance equipment such as CCTV and biometric identification systems.

South African defense imports declined drastically from 2014 to 2015, and there were no imports from 2016 to 2018. The country sourced the majority of its defense equipment from Russia, which accounted for 96.2% of total imports during 2014-2018. The other major country from which South Africa imported military equipment during that period is the UK. During 2014-2018, the South African defense export market increased significantly, with the market reaching its highest value in 2018. The US was the largest importer of South African defense goods, accounting for 21.2% of total defense exports, whilst the UAE and India accounted for the country’s second and third largest shares with 20.5% and 9.7%, respectively.

The report “South African Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024” offers detailed analysis of the South African 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 South African 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 South African 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 South African 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: Denel, Ansys Limited, Reutech, Saab Grintek, IVEMA, Aerosud, Global Armour, Milkor, Paramount Advanced Technologies, Tellumat Defense

Scope
  • South Africa’s military expenditure stands at US$3.6 billion in 2019 and is anticipated to grow from US$3.8 billion in 2020 to value US$4.3 billion in 2024, registering a CAGR of 3.10% over the forecast period.
  • The growth will primarily be fueled by the country’s active participation in peacekeeping operations governed by the UN (United Nations), African Union, and the Southern African Development Community (SADC). As a result of these missions, the government will seek higher expenditure for the defense sector.
  • The country also seeks to replace its aging military equipment and improve border security and surveillance, which are expected to help drive defense expenditure 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 South African 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 The South African defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
Note: Product cover images may vary from those shown
2 of 3

FEATURED COMPANIES

  • Aerosud
  • Ansys Limited
  • Denel
  • Global Armour
  • IVEMA
  • Milkor
  • 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 and Strategy
3.1.3. Procurement Programs
3.1.4. Top Procurement Programs by Value (US$ Million), 2019-2024
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. South African defense expenditure expected to grow at a CAGR of 3.10% over the forecast period
3.2.2. Modernization initiatives, peacekeeping missions, and border security to drive defense expenditure
3.2.3. Military expenditure as a percentage of GDP is anticipated to increase over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure share to remain constant over the forecast period
3.3.2. Capital expenditure anticipated to increase at a CAGR of 4.10% over the forecast period
3.3.3. Others segment accounted for the largest percentage share of the overall defense budget
3.3.4. Army expenditure to grow at a modest pace over the forecast period
3.3.5. Per-capita defense expenditure expected to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security expenditure to grow at a CAGR of 4.50% over the forecast period
3.4.2. Homeland security expenditure to be driven by the rising threat of global terrorism and high violent crime rates
3.5. Benchmarking with Key Global Markets
3.5.1. South African defense expenditure expected to remain low compared to leading spenders
3.5.2. The country will continue to be a small player in the global defense market
3.5.3. South African defense expenditure as a percentage of GDP is lower than the majority of leading defense spenders
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top 10 Defense Market Categories by Value (US$ Million) - 2019-2024
3.6.2. Airborne C4ISR
3.6.3. Physical Security
3.6.4. Infantry Fighting Vehicles

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports expected to remain constant over the forecast period
4.1.2. Russia dominated South Africa’s defense imports
4.1.3. Satellites were the main defense import
4.2. Export Market Dynamics
4.2.1. Defense export value increased significantly during 2014-2018
4.2.2. The US accounted for the largest share of South African defense exports
4.2.3. Armored vehicles accounted for the majority of the country’s defense exports

5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power of Supplier: Low
5.1.2. Bargaining Power of Buyer: Medium
5.1.3. Barrier to Entry: Medium
5.1.4. Intensity of Rivalry: High
5.1.5. Threat of Substitution: Medium

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset policy ensures support for local companies
6.1.2. FDI is channeled into benefitting local business
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement policy and process
6.2.3. Foreign OEMs find alternative routes into the market
6.2.4. Joint ventures and collaborations provide market entry opportunities
6.3. Key Challenges
6.3.1. Corruption and lack of transparency pose an obstacle for market entry
6.3.2. Lack of relevant defense policy
6.3.3. Lack of transparency

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. South African Market Share Analysis, 2018
7.2. Key Public Sector Companies
7.2.1. Denel: Overview
7.2.2. Denel: Products and Services
7.2.3. Denel: Recent Announcements and Strategic Initiatives
7.2.4. Denel: Alliances
7.2.5. Denel: Recent Contract Wins
7.2.6. Ansys Limited: Overview
7.2.7. Ansys Limited: Products
7.2.8. Ansys Limited: Alliances
7.2.9. Ansys Limited: Recent Contract Wins
7.2.10. Ansys Limited: Financial Analysis
7.3. Key Private Sector Companies
7.3.1. Reutech: Overview
7.3.2. Reutech: Products and Services
7.3.3. Reutech: Recent Announcements and Strategic Initiatives
7.3.4. Reutech: Alliances
7.3.5. Reutech: Recent Contract wins
7.3.6. Saab Grintek: Overview
7.3.7. Saab Grintek: Products and Services
7.3.8. Saab Grintek: Recent Announcements and Strategic Initiatives
7.3.9. Saab Grintek: Alliances
7.3.10. Saab Grintek: Recent Contract Wins
7.3.11. IVEMA: Overview
7.3.12. IVEMA: Products and Services
7.3.13. IVEMA: Recent Contract Wins
7.3.14. Aerosud: Overview
7.3.15. Aerosud: Products and Services
7.3.16. Aerosud: Recent Announcements and Strategic Initiatives
7.3.17. Aerosud: Alliances
7.3.18. Aerosud: Recent Contract Wins
7.3.19. Global Armour: Overview
7.3.20. Global Armour: Products and Services
7.3.21. Global Armour: Recent Announcements and Strategic Initiatives
7.3.22. Global Armour: Alliances
7.3.23. Global Armour: Recent contract wins
7.3.24. Milkor (Pty) Ltd: Overview
7.3.25. Milkor (Pty) Ltd.: Products
7.3.26. Milkor (Pty) Ltd.: Recent Announcements and Strategic Initiatives
7.3.27. Milkor (Pty) Ltd.: Recent Contract Wins
7.3.28. Paramount Advanced Technologies: Overview
7.3.29. Paramount Advanced Technologies: Products
7.3.30. Paramount Advanced Technologies: Recent Announcements and Strategic Initiatives
7.3.31. Paramount Advanced Technologies: Recent Contract Wins
7.3.32. Tellumat Defense: Overview
7.3.33. Tellumat Defense: Products
7.3.34. Tellumat Defense: Recent Announcements and Strategic Initiatives
7.3.35. Tellumat Defense: Alliances
7.3.36. Tellumat Defense: Recent Contract Wins

8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita
8.1.2. GDP, Current Prices
8.1.3. Local Currency Unit per US$
8.1.4. Exports of Goods and Services (LCU Billion)
8.1.5. Imports of Goods and Services (LCU Billion)
8.1.6. Gross National Disposable Income (US$ Billion)
8.1.7. Goods Exports as a Percentage of GDP
8.1.8. Goods Imports as a Percentage of GDP
8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP
8.1.10. Services Imports as a Percentage of GDP
8.1.11. Services Exports as a Percentage of GDP
8.1.12. Foreign Direct Investments
8.1.13. Net Foreign Direct Investments as a Percentage of GDP
8.1.14. Market Capitalization of Listed Companies (US$ Billion)
8.1.15. Market Capitalization of Listed Companies as a Percentage of GDP
8.1.16. Mining, Manufacturing, and Utilities Output

9. Appendix
9.1. About the Author
9.2. Disclaimer

List of Tables
Table 1: South Africa - Ongoing Development and Procurement Programs
Table 2: South Africa - Future Procurement Programs
Table 3: South Africa - Defense Procurement Programs by Value (US$ Million), 2019-2024
Table 4: South African Defense Expenditure (ZAR Billion and US$ Billion), 2015-2024
Table 5: South African GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015-2024
Table 6: South African Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Table 7: South African Defense Capital Expenditure (ZAR Billion & US$ Billion), 2015-2024
Table 8: South African Defense Budget Share (%) Split by Services (Army, Air Force, Navy and Other), 2015-2024
Table 9: South African Defense Budget Allocations in ZAR Billion - Breakdown by Services (Army, Air Force, Navy and Others), 2015-2024
Table 10: South African Defense Budget Allocations in US$ Billion - Breakdown by Services (Army, Air Force, Navy and Others), 2015-2024
Table 11: South African Per-Capita Defense Expenditure (US$), 2015-2024
Table 12: South African Homeland Security Expenditure (ZAR Billion & US$ Billion), 2015-2024
Table 13: Benchmarking with Key Markets - 2015-2019 vs 2020-2024
Table 14: South Africa - 10 Leading Defense Market Categories by Value (US$ Million), 2019-2024
Table 15: Methodology for Offset Credits
Table 16: Competitive Landscape of the South African Defense Industry
Table 17: South Africa - Top Defense Suppliers by Value (US$ Million), 2019-2024
Table 18: Denel - Products and Services
Table 19: Denel - Alliances
Table 20: Denel - Recent Contract Wins
Table 21: Ansys Limited - Products
Table 22: Ansys Limited - Alliances
Table 23: Ansys Limited - Recent Contract Wins
Table 24: Reutech - Products and Services
Table 25: Reutech - Alliances
Table 26: Reutech - Recent Contract Wins
Table 27: Saab Grintek - Products and Services
Table 28: Saab Grintek - Alliances
Table 29: Saab Grintek - Recent Contract Wins
Table 30: IVEMA - Products and Services
Table 31: IVEMA - Recent Contract Wins
Table 32: Aerosud - Products and Services
Table 33: Aerosud - Alliances
Table 34: Aerosud - Recent Contract Wins
Table 35: Global Armour - Products and Services
Table 36: Global Armour - Alliances
Table 37: Aerosud - Recent Contract Wins
Table 38: Milkor (Pty) - Products
Table 39: Milkor (Pty), Ltd. - Recent Contract Wins
Table 40: Paramount Advanced Technologies - Products
Table 41: Paramount Advanced Technologies - Recent Contract Wins
Table 42: Tellumat Defense - Products
Table 43: Tellumat Defense - Alliances
Table 44: Tellumat Defense - Recent Contract Wins

List of Figures
Figure 1: South African Defense Budget: 2020 and 2024
Figure 2: South African Defense Imports/Exports: 2014 and 2018
Figure 3: South Africa’s Top Prospective Procurements/Developments
Figure 4: South African National Security Threats
Figure 5: South Africa Partnering Countries for Defense Cooperation and Military Training
Figure 6: South African Defense Expenditure (ZAR Billion), 2015-2024
Figure 7: South African Defense Expenditure (US$ Billion), 2015-2024
Figure 8: South African GDP Growth vs Defense Expenditure as a Percentage of GDP, 2015-2024
Figure 9: South African Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Figure 10: South African Defense Capital Expenditure (ZAR Billion), 2015-2024
Figure 11: South African Defense Capital Expenditure (US$ Billion), 2015-2024
Figure 12: South Africa - Defense Expenditure Allocation (%), 2015-2024
Figure 13: South African Defense Expenditure in ZAR Billion - Breakdown by Services (Army, Air Force, Navy and Others) 2015-2024
Figure 14: South African Defense Budget in US$ Billion - Breakdown by Services (Army, Air Force, Navy and Others), 2015-2024
Figure 15: South African Per-Capita Defense Expenditure (US$), 2015-2024
Figure 16: South African Homeland Security Budget (ZAR Billion), 2015-2024
Figure 17: South African Homeland Security Budget (US$ Billion), 2015-2024
Figure 18: Benchmarking with Key Markets - 2015-2019 vs 2020-2024
Figure 19: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2019 and 2024
Figure 20: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
Figure 21: Airborne C4ISR Market Size (US$ Million), 2019-2024
Figure 22: Physical Security Market Size (US$ Million), 2019-2024
Figure 23: Infantry Fighting Vehicles: Market Size (US$ Million), 2019-2024
Figure 24: South Africa - Defense Procurements in Terms of Supplier Relationships, 2019
Figure 25: South African Defense Imports Trend (TIV Values), 2014-2018
Figure 26: South African Defense Imports by Country (%), 2014-2018
Figure 27: South African Defense Imports by Category (%), 2014-2018
Figure 28: South Africa Defense Exports Trend (TIV Values), 2014-2018
Figure 29: South African Defense Exports by Country (%), 2014-2018
Figure 30: South African’s Defense Exports by Category (%), 2014-2018
Figure 31: Industry Dynamics - Porter’s Five Forces Analysis
Figure 32: The South African Budgeting Process
Figure 33: Key Challenges in the South African Defense Market
Figure 34: South African Market Share Analysis, 2018
Figure 35: Ansys - Revenue Trend Analysis (2014-2018)
Figure 36: Ansys - Operating Income Trend Analysis (2014-2018)
Figure 37: Ansys - Net Income Trend Analysis (2014-2018)
Figure 38: South African GDP Per Capita (US$), 2015-2025
Figure 39: South African GDP Current Prices (US$ Billion), 2015-2025
Figure 40: South African LCU per US$ 2015-2024
Figure 41: South African Exports of Goods and Services (LCU Billion), 2005-2014
Figure 42: South African Imports of Goods and Services (LCU Billion), 2005-2014
Figure 43: South African Gross National Disposable Income (US$ Billion), 2005-2014
Figure 44: South African Good Exports (% of GDP), 2005-2014
Figure 45: South African Good Imports (% of GDP), 2005-2014
Figure 46: South African Goods Balance (% GDP), 2005-2012
Figure 47: South African Service Imports (% of GDP), 2005-2014
Figure 48: South African Service Exports (% of GDP), 2005-2014
Figure 49: South African Foreign Direct Investment, Net (BoP, Current US$ Billion), 2005-2014
Figure 50: South African Net Foreign Direct Investments (% of GDP), 2005-2014
Figure 51: South African Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 52: South African Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 53: South African Mining, Manufacturing, and Utilities Output (US$ Billion), 2005-2014
Note: Product cover images may vary from those shown
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  • Denel
  • Ansys Limited
  • Reutech
  • Saab Grintek
  • IVEMA
  • Aerosud
  • Global Armour
  • Milkor
  • Paramount Advanced Technologies
  • Tellumat Defense
Note: Product cover images may vary from those shown
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