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

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

Summary

Norwegian military expenditure is projected to reach US$8.3 billion in 2024 with an expected CAGR of 4.67% over the forecast period. Norway aims to develop a strong and modern defense force that is capable of addressing national threats and contributing effectively to allied and international operations regarding security and peace, post the financial crisis. The country is a part of NORDEFCO (Nordic Defence Cooperation), which was established in 2009 and aims to strengthen the region’s defense capabilities through cost-effective collaborations.

The Norwegian military capital expenditure is forecasted to increase from US$2.7 billion in 2020 to US$3.5 billion in 2024, at a compounded annual growth rate of 6.67%. The Norwegian Defense Ministry is expected to procure military fighter aircraft, search and rescue helicopters armored vehicles, main battle tanks, cyber security, radars, ammunition sensor systems and UAVs. The Revenue expenditure is forecasted to increase from US$4.3 billion in 2020 to US$4.9 billion in 2024, attributed to additional training and development programs that are undertaken over the forecast period.

Norwegian homeland security expenditure to be US$5.2 billion by 2024. Norwegian homeland security expenditure (HLS) stands at US$4.7 billion in 2019, reflecting a CAGR of 1.76% over 2015-2019. Over the forecast period, the budget is expected to grow from US$5.4 billion in 2020 to US$8.9 billion in 2024, driven by the government’s efforts to curb the continuing problems of terrorism and cyber-crimes. The country is anticipated to spend significantly on cyber security, surveillance systems, airport security, biometric systems, video-surveillance systems, training, and cyber security software during the forecast period.

Norwegian defense imports and exports are expected to increase over the forecast period. Overall defense imports were high between 2014 and 2018, and are expected to further accelerate during the forecast period due to the modernization and procurement plans of the Norwegian MoD. European countries such as France, Germany, Italy, and the UK are expected to remain the key suppliers during the forecast period. During the forecast period, the country’s defense exports are expected to grow significantly as a result of expansion into Thailand, Singapore, and South Africa, in which, demand for defense equipment is expected to be strong. Furthermore, new collaboration programs with foreign OEMs are expected to drive Norwegian defense exports over the forecast period.

The report “Norwegian 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. This report offers detailed analysis of the Norwegian 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 the report “Norwegian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024” provides an in-depth analysis of the following -

The Norwegian defense industry market size and drivers: detailed analysis of the Norwegian 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. It also details the key challenges faced by defense market participants within the country
Porter’s Five Force analysis of the Norwegian 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 Norwegian 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: Kongsberg Defense and Aerospace AS, Forsvarets ForskningsInstitutt (FFI), NAMMO AS (Nordic Ammunition Group), Kitron, Thales Norway AS, Umoe Mandal, Eidsvoll Electronics AS (Eidel)

Scope

Norway’s total defense expenditure values US$6.8 billion in 2018 and is expected to reach US$6.7 billion by 2024. This can be attributed to military modernization initiatives and training programs that are expected to be executed during the forecast period. A considerable portion of the budget is anticipated to be directed towards the procurement of military aircraft such as the F-35 fighter aircraft, the Norwegian All Weather Search and Rescue Helicopter (NAWSARH) program, maritime patrol aircraft, Advanced Medium Range Air-to-Air Missiles (AMRAAM), the soldier modernization program, cyber security, and the purchase of military tactical trucks. In addition, the defense budget is expected to be driven by the country’s participation in peacekeeping initiatives.
Norwegian defense capital expenditure is expected to increase from US$2.7 billion in 2020 to US$3.5 billion in 2024, growing at a CAGR of 6.67%. The Norwegian Defense Ministry is expected to procure multirole fighter aircraft, search and rescue helicopters, armored vehicles, main battle tanks, cyber security, a joint strike missile (JSM) system, and submarines. Revenue expenditure is expected to increase from US$4.3 billion in 2020 to US$4.9 billion in 2024, attributed to additional training and development programs that are to be undertaken over the forecast period.
Norwegian homeland security expenditure (HLS) stands at US$4.7 billion in 2019, reflecting a CAGR of 1.76% over 2015-2019. Over the forecast period, the budget is expected to grow from US$5.4 billion in 2020 to US$8.9 billion in 2024, driven by the government’s efforts to curb the continuing problems of terrorism and cyber-crimes. The country is anticipated to spend significantly on cyber security, surveillance systems, airport security, biometric systems, video-surveillance systems, training, and cyber security software during 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 Norwegian 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 Norwegian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

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. Ongoing Procurement Programs
3.1.5. Future Procurement Programs
3.1.6. Top Procurement Programs By Value (US$ Million) 2019-2024
3.1.7. Geopolitical, Social and Economic Scenario
3.1.8. Political and Strategic Alliances
3.2. Defense Market Size, Historical and Forecast
3.2.1. Norwegian defense budget will grow at a CAGR of 4.67% over 2020-2024
3.2.2. Modernizing the armed forces, participating in international peacekeeping operations, and an interest in the Arctic region are the main factors driving the Norwegian defense industry
3.2.3. Defense expenditure as a percentage of GDP is expected to average 1.75% during the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure allocation is expected to increase over the forecast period
3.3.2. Capital expenditure to increase at a CAGR of 6.67% over 2020-2024
3.3.3. Key Trends in Norwegian defense market
3.3.4. Expenditure on the ’Others’ segment expected to be the largest during the forecast period
3.3.5. ‘Others’ segment to continue accounting for the largest share of the Norwegian defense budget
3.3.6. Per capita defense expenditure set to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Norwegian homeland security expenditure is expected to grow at a CAGR of 13.48% over the forecast period
3.4.2. Counter-terrorism and enhanced cyber security are expected to drive homeland security expenditure
3.5. Benchmarking with Key Global Markets
3.5.1. Norwegian defense budget expenditure expected to increase over the forecast period
3.5.2. Norway has one of the fastest-growing defense industries in Europe
3.5.3. Norwegian defense budget as a percentage of GDP is expected to grow over the forecast period
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top ten Defense market sectors by value (US$ Million) - Projections over period 2019-2024
3.6.2. Fighters and Multirole aircraft
3.6.3. Land-based C4ISR
3.6.4. Physical Security

4. Defense Procurement Market Dynamics

4.1. Import Market Dynamics
4.1.1. Norwegian defense imports are expected to increase over the forecast period
4.1.2. US is the largest arms supplier to Norway
4.1.3. Aircraft accounted for the largest percentage share of overall defense imports
4.2. Export Market Dynamics
4.2.1. Norway was among the top 20 countries with the highest volume of defense exports
4.2.2. Exports to European countries are expected to increase over the forecast period
4.2.3. The air defense systems category accounted for the majority of Norway’s defense exports during 2014-2018

5. Industry Dynamics

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

6. Market Entry Strategy

6.1. Budgeting Process
6.2. Procurement Policy and Process
6.3. Market Regulation
6.3.1. The Norwegian defense industry is largely driven by government regulation and offset policy
6.3.2. The Norwegian government supports FDI
6.4. Market Entry Route
6.4.1. Entry through Joint Development Programs
6.4.2. Foreign Military Sales (FMS) to Norway
6.4.3. Collaborations provide market entry opportunities
6.5. Key Challenges
6.5.1. The Norwegian government prefers Scandinavian and European countries for defense trade
6.5.2. The Norwegian export policy poses a challenge for domestic defense companies

7. Competitive Landscape and Strategic Insights

8. Business Environment and Country Risk

8.1. Economic Performance
8.1.1. GDP Per Capita at Constant Prices
8.1.2. GDP at Current Prices (US$)
8.1.3. Exports of Goods and Services (current LCU Bn)
8.1.4. Imports of Goods and Services (current LCU bn)
8.1.5. Gross National Disposable Income (US$ billion)
8.1.6. LCU per US$
8.1.7. Market Capitalization of Listed Companies (US$ billion)
8.1.8. Market Capitalization of Listed Companies (% of GDP)
8.1.9. Total Government Cash Surplus/Deficit (LCU billion)
8.1.10. Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
8.1.11. Goods Exports as a Percentage of GDP
8.1.12. Goods Imports as a Percentage of GDP
8.1.13. Services Imports as a Percentage of GDP
8.1.14. Service Exports as a Percentage of GDP
8.1.15. Foreign Direct investment, Net (BoP, current US$ billions)
8.1.16. Net Foreign Direct Investment as a Percentage of GDP
8.1.17. Mining, Manufacturing, Utilities Output (US$ billion)

9. Appendix

9.1. About the Author
9.2. Disclaimer

List of Tables

Table 1: Norwegian Ongoing Procurement Programs
Table 2: Norwegian Future Procurement Programs
Table 3: Top Norwegian Defense Procurement Programs by Value (US$ Million) 2019-2024
Table 4: Norwegian Defense Cooperation
Table 5: Turkish Military Training Exercises
Table 6: Norwegian Defense Expenditure (NOK billion & US$ billion), 2015-2024
Table 7: Norwegian GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
Table 8: Norwegian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Table 9: Norwegian Defense Capital Expenditure (NOK Billion and US$ Billion), 2015-2024
Table 10: Expected and Future Projects - Land Systems
Table 11: Expected and Future Projects - Naval Systems
Table 12: Expected and Future Projects - Air Systems
Table 13: Norwegian Defense Expenditure Breakdown (%), 2015-2024
Table 14: Norwegian Defense Budget in NOK Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Table 15: Norwegian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Table 16: Norway Per-Capita Defense Expenditure (US$), 2015-2024
Table 17: Norwegian Homeland Security Expenditure (NOK Billion & US$ Billion), 2015-2024
Table 18: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
Table 19: Top ten Norwegian Defense Market Sectors by Value (US$ Million) - 2019-2024
Table 20: Offset Multiplier Categories
Table 21: Market Entry Strategies by Key Foreign Companies
Table 22: FMS deals to Norway
Table 23: Competitive Landscape of the Norway Defense Industry
Table 24: Kongsberg Defense Systems - Product Focus
Table 25: Kongsberg Defense Systems - Alliances
Table 26: Kongsberg Defense Systems - Recent Contract Wins
Table 27: Forsvarets ForskningsInstitutt - Product Focus
Table 28: Forsvarets ForskningsInstitutt - Alliances
Table 29: Forsvarets ForskningsInstitutt - Recent Contract Wins
Table 30: NAMMO AS - Product Focus
Table 31: NAMMO AS - Alliances
Table 32: NAMMO AS - Recent Contract Wins
Table 33: Kitron - Product Focus
Table 34: Kitron - Alliances
Table 35: Kitron - Recent contract wins
Table 36: Thales Norway AS - Product Focus
Table 37: Thales Norway AS - Alliances
Table 38: Thales Norway AS - Recent Contract Wins
Table 39: Umoe Mandal - Product and Services Focus
Table 40: Umoe Mandal - Alliances
Table 41: Eidsvoll Electronics AS - Product Focus
Table 42: Eidsvoll Electronics - Alliances
Table 43: Eidsvoll - Recent Contract Wins

List of Figures

Figure 1 : Norwegian Defense Budget: 2020 and 2024
Figure 2 : Norwegian Defense Imports: 2014 and 2018
Figure 3 : Norway’s Top Three Prospective Procurements/Developments
Figure 4: Norway National Security Threats
Figure 5: Norway’s Partnering Countries for Defense Cooperation and Military Training
Figure 6: Norwegian Defense Expenditure (NOK Billion), 2015-2024
Figure 7: Norwegian Defense Expenditure (US$ Billion), 2015-2024
Figure 8: Norwegian GDP Growth vs. Defense Expenditure as Percentage of GDP, 2015-2024
Figure 9: Norwegian Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Figure 10: Norwegian Defense Capital Expenditure (NOK Billion), 2015-2024
Figure 11: Norwegian Defense Capital Expenditure (US$ Billion), 2015-2024
Figure 12: Norwegian Defense Expenditure Share - (%) Split by Services (Army, Navy, Air Force and Others), 2015-2024
Figure 13: Norwegian Defense Budget in NOK Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Figure 14: Norwegian Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Figure 15: Norwegian Per Capita Defense Expenditure (US$), 2015-2024
Figure 16: Norwegian Homeland Security Expenditure (NOK billion), 2015-2024
Figure 17: Norwegian Homeland Security Expenditure (US$ billion), 2015-2024
Figure 18: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
Figure 19: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2019 and 2024
Figure 20: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
Figure 21: Fighters and Multirole Aircraft (US$ Million), 2019-2024
Figure 22: Land based C4ISR (US$ Million), 2019-2024
Figure 23: Physical Security (US$ Million), 2019-2024
Figure 24: Norwegian Defense Procurements In Terms Of their Supplier Relationships
Figure 25: Norwegian Defense Import Trend, 2014-2018 (TIV values*)
Figure 26: Norwegian Defense Import by Country, 2014-2018 (TIV values)
Figure 27: Norwegian Defense Imports by Category (%),2014-2018
Figure 28: Norwegian Defense Exports Trend, 2014-2018 (TIV values*)
Figure 29: Norwegian Defense exports by Country (%), 2014-2018
Figure 30: Norwegian Defense Exports by Category (%), 2014-2018
Figure 31: Industry Dynamics - Porter’s Five Forces Analysis
Figure 32: Norway Budgeting Process
Figure 33: Norwegian Market Challenges
Figure 34: Norwegian GDP Per Capita at Constant Prices (US$), 2015-2025
Figure 35: Norway GDP at Current Prices (US$ Billion), 2015-2025
Figure 36: Norwegian Exports of Goods and Services (LCU Bn), 2005-2014
Figure 37: Norwegian Imports of Goods and Services (LCU Bn), 2005-2014
Figure 38: Norwegian Gross National Disposable Income (US$ billion), 2005-2013
Figure 39: Norway LCU per US$, 2015-2024
Figure 40: Norwegian Market Capitalization of Listed Companies (US$ billion), 2005-2012
Figure 41: Norwegian Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 42: Norwegian Total Government Cash Surplus/Deficit (LCU billion), 2003-2012
Figure 43: Norwegian Government Cash Surplus/Deficit as a % of GDP (LCU), 2005-2012
Figure 44: Norway Goods Exports as a % of GDP (%), 2005-2013
Figure 45: Norway Goods Imports as a % of GDP (%), 2005-2013
Figure 46: Norwegian Services Imports as a % of GDP (%), 2005-2013
Figure 47: Norwegian Service Exports as a % of GDP (%), 2005-2013
Figure 48: Norway Foreign Direct Investment, net (BoP, current US$ billion), 2005-2013
Figure 49: Norwegian Net Foreign Direct Investment as a % of GDP, 2005-2014
Figure 50: Norwegian Mining, Manufacturing, Utilities Output (US$ billion), 2005-2014