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

  • ID: 4898162
  • Report
  • December 2019
  • Region: Pakistan
  • 142 pages
  • GlobalData

FEATURED COMPANIES

  • Aselsan
  • Boeing
  • Lockheed Martin
  • Raytheon
  • MORE
Pakistani Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Summary

Pakistan is one of the major non-NATO allies of the US and a significant partner with China in the area of defense and security equipment development. The internal instability caused by terrorist groups along with Pakistan’s long standing territorial dispute with neighbor countries are major factors driving the year on year increase the Pakistani defense budget. Insurgencies in Balochistan and Khyber Pakhtunkhwa, rising terrorism and territorial dispute with India and Afghanistan are key issues which are expected to propel spending of government in defense sector.

Pakistan is expected to spend US$48.5 billion on defense over 2020-2024 to manage internal instability and bolster its defense capabilities with respect to India. The country’s total defense budget, excluding US aid has increased at sluggish rate over 2015-2019, with a CAGR of 0.69%, the country invested US$7.6 billion in the defense sector in 2015, which further increased to US$7.8 billion in 2019. The defense budget of Pakistan decreased drastically from US$9.4 billion in 2018 to US$7.8 billion due to economic instability and turmoil which has resulted in depreciation of Pakistani currency against US dollar.

Between 2015 and 2019, Pakistan’s average capital expenditure allocation was 36.8% of the total defense budget, while its revenue expenditure allocation was 63.2%. The country’s military hardware upgrade strategies are expected to increase the average capital allocation to 37.8% over the forecast period. Pakistan’s homeland security (HLS) expenditure, targeted towards the prevention of drug smuggling, human trafficking, robbery, corruption, and cyber-attacks, is on the increase due to the growing instances of criminal and illicit activities within the nation. HLS expenditure, valued at US$1.0 billion in 2019, grew from US$0.9 billion in 2015, at a CAGR of 2.68%.

Pakistan’s domestic defense industry is able to fulfill the majority of the national requirements for low and mid-market technology defense systems, but is largely unable to supply technologically advanced defense systems. US was once biggest exporter of arms to the Pakistan however the rising tensions between these two countries has considerably affected the weapons sales. From 2014-2018 there is large reduction in the arms transfer between these two countries. However, the Pakistani export market is set to gradually grow over the forecast period, as the country begins to develop high quality indigenous defense systems.

The report “The Future of Pakistani 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. This report offers detailed analysis of Pakistani 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 “The Future of Pakistani Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024” provides an in-depth analysis of the following -
  • Pakistani defense industry market size and drivers: detailed analysis of Pakistani 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 Pakistani 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 Pakistani 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: Karachi Shipyard & Engineering Works (KSEW), Pakistan Aeronautical Complex (PAC), Pakistan Ordnance Factories (POF), Pakistan Space and Upper Atmosphere Research Commission (SUPARCO), Heavy Industries Taxila (HIT), The Heavy Mechanical Complex (HMC), Surveillance and Target Unmanned Aircraft (SATUMA), Boeing, Raytheon, Lockheed Martin, Chengdu Aircraft Industry Group, Turkish Aerospace Industries (TAI), Aselsan

Scope
  • One of the most attractive defense markets in South Asia, Pakistan is anticipated to invest US$48.6 billion cumulatively over the forecast period, compared to US$42.3 billion spent during 2015-2019. Expenditure is anticipated to focus more on the procurement of equipment to augment air defense capabilities, enhance the operational capabilities of the current fleet of naval vessels, and better communication and surveillance systems.
  • The share of capital expenditure as a percentage of overall defense expenditure is anticipated to rise from an average of 36.8% during 2015-2019 to 37.8% over the forecast period.
  • The Pakistani MoD is expected to invest in land based C4ISR, conventional diesel electric submarine, multirole aircraft, airborne C4ISR, missile defense system, attack helicopters, Main Battle Tanks (MBT), corvettes MRO, and frigates.
Reasons to buy
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of Pakistani 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 Pakistani 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

FEATURED COMPANIES

  • Aselsan
  • Boeing
  • Lockheed Martin
  • Raytheon
  • 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. 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 & Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Pakistani annual defense expenditure to reach US$10.9 billion by 2024
3.2.2. Territorial disputes and the war against terrorism expected to drive defense expenditure
3.2.3. The country’s defense expenditure as a percentage of GDP to increase over 2020-2024
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure share to average 37.8% during the forecast period
3.3.2. Capital expenditure to record a CAGR of 6.43% over 2020-2024
3.3.3. Pakistan Defense Procurement Scenario
3.3.4. Budget allocation for the army to be highest over the forecast period
3.3.5. Defense expenditure allocation for the army expected to increase over the forecast period
3.3.6. Per capita defense expenditure expected to increase during the forecast period
3.3.7. Homeland Security Market Size and Forecast
3.3.8. Allocation for the police forms the major component of homeland security expenditure
3.3.9. Measures to curb organized crime and cyber-attacks will drive homeland security expenditure
3.4. Benchmarking with Key Global Markets
3.4.1. Pakistani defense expenditure expected to record a CAGR of 6.48% over 2020-2024
3.4.2. Pakistani defense expenditure is low compared to other Asian defense spenders
3.4.3. Pakistan’s defense expenditure is anticipated to reach 2.4% of GDP in 2024
3.5. Market Opportunities: Key Trends and Growth Stimulators
3.5.1. Top 10 Defense Market Sectors by Value (US$ Million) - Projections over period 2019-2024
3.5.2. Fighter and multi-role aircraft
3.5.3. Frigates
3.5.4. Land-Based C4ISR

4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports projected to increase over the forecast period
4.1.2. China and the US were the leading suppliers of arms to Pakistan during 2014-2018
4.1.3. Aircraft and armored vehicles accounted for the majority of defense imports between 2014 and 2018
4.2. Export Market Dynamics
4.2.1. DEPO expected to start defense exports

5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of the supplier: low to medium
5.1.2. Bargaining power of the buyer: high
5.1.3. Barriers to entry: medium to high
5.1.4. Intensity of rivalry: low to medium
5.1.5. Threat of substitution: low to medium

6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Defense procurements assigned to DGDP and DGMP
6.1.2. Pakistani government updated Offset Act for defense equipment procurements
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy & Process
6.2.3. Foreign firms enter the Pakistani defense industry through Foreign Military Sales (FMS)
6.2.4. Collaborations and joint ventures - a viable market entry route
6.3. Key Challenges
6.3.1. Corruption in the Pakistani defense sector hinders its growth
6.3.2. Unstable political system coupled with internal instability discourages foreign participation
6.3.3. Economic crisis in Pakistan is expected to act as major restrain to the growth of defense industry over the forecast period

7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. Foreign suppliers manufacture defense systems overseas and deliver to Pakistan
7.1.2. Growing domestic defense industry is predominantly state run
7.2. Key Domestic Companies
7.3. Key Foreign Companies

8. Business Environment and Country Risk
8.1. Economic Performance

9. Appendix
9.1. About the Author
9.2. Disclaimer

List of Tables
Table 1: Pakistan - Ongoing Procurement Programs, 2019
Table 2: Pakistan - Future Procurement Programs, 2019
Table 3: Pakistan - Defense Procurement Programs by Value (US$ Million), 2019-2024
Table 4: Pakistani Defense Cooperation
Table 5: Pakistani Military Training Exercises
Table 6: Pakistan - Defense Expenditure (PKR Billion & US$ Billion), 2015-2024
Table 7: Pakistan - Defense Expenditure Including US Aid, 2015-2019
Table 8: Pakistan - GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
Table 9: Pakistan - Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Table 10: Pakistan - Defense Capital Expenditure (PKR Billion & US$ Billion), 2015-2024
Table 11: Pakistan - Defense Capital Expenditure Breakdown (%), 2015-2024
Table 12: Pakistan - Defense Budget in PKR Billion, by Service (PKR Billion / %), 2015-2024
Table 13: Pakistan - Defense Budget in US$ Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2015-2024
Table 14: Pakistan - Per Capita Defense Expenditure (US$), 2015-2024
Table 15: Pakistan - Homeland Security Expenditure (PKR Billion / US$ Billion), 2015-2024
Table 16: Benchmarking with Key Markets - 2015-2019 vs. 2020-2024
Table 17: Pakistan - Defense Market Sectors by Value (US$ Million), 2019-2024
Table 18: Offset Multiplier Categories
Table 19: FMS route followed by Foreign Companies
Table 20: Market Entry Strategies by Key Foreign Companies
Table 21: Key Foreign Companies and Operations in Pakistan’s Defense Industry
Table 22: Top Defense Suppliers in Pakistan’s Defense Industry - By Value (US$ Million) 2019-2024
Table 23: Competitive Landscape of Pakistan’s Defense Industry
Table 24: Karachi Shipyard & Engineering Works - Product Focus
Table 25: Karachi Shipyard & Engineering Works - Alliances
Table 26: Karachi Shipyard & Engineering Works - Recent Contract Wins
Table 27: Pakistan Aeronautical Complex - Product Focus
Table 28: Pakistan Aeronautical Complex - Alliances
Table 29: Pakistan Aeronautical Complex - Recent Contract Wins
Table 30: Pakistan Ordnance Factories - Product Focus
Table 31: Pakistan Ordnance Factories - Alliances
Table 32: Pakistan Ordnance Factories - Recent Contract Wins
Table 33: Pakistan Space and Upper Atmosphere Research Commission - Product Focus
Table 34: Pakistan Space and Upper Atmosphere Research Commission - Alliances
Table 35: Pakistan Space and Upper Atmosphere Research Commission - recent contract wins
Table 36: Heavy Industries Taxila - product focus
Table 37: Heavy Industries Taxila - alliances
Table 38: Heavy Industries Taxila - recent contract wins
Table 39: The Heavy Mechanical Complex - product focus
Table 40: The Heavy Mechanical Complex - alliances
Table 41: SATUMA - product focus
Table 42: SATUMA - recent contract wins
Table 43: Boeing - Product Focus
Table 44: Boeing - Recent Contract Wins
Table 45: Raytheon - Product Focus
Table 46: Raytheon - Recent Contract Wins
Table 47: Lockheed Martin - Product Focus
Table 48: Lockheed Martin - alliances
Table 49: Lockheed Martin - Recent Contract Wins
Table 50: Chengdu Aircraft Industry Group - Product Focus
Table 51: Chengdu Aircraft Industry Group - Alliances
Table 52: Chengdu Aircraft Industry Group - Recent Contract Wins
Table 53: Turkish Aerospace Industries (TAI) - Main Products
Table 54: Turkish Aerospace Industries (TAI) - Alliances
Table 55: Turkish Aerospace Industries (TAI) - Recent Contract Wins
Table 56: Aselsan - Main Products
Table 57: Aselsan - Alliances
Table 58: Aselsan - Recent Contract Wins

List of Figures
Figure 1: Pakistan Defense Budget, 2020 and 2024
Figure 2: Pakistan Defense Imports, 2014 and 2018
Figure 3: Pakistan National Security Threats
Figure 4 : Pakistan’s Top Prospective Procurements/Developments
Figure 5: Pakistan’s Partner Countries for Defense Cooperation and Military Training
Figure 6: Pakistan - Defense Expenditure (PKR Billion), 2015-2024
Figure 7: Pakistan - Defense Expenditure (US$ Billion), 2015-2024
Figure 8: Pakistan - US Military and Security Aid (US$ Million), 2015-2019
Figure 9: Pakistan - Defense Expenditure Including US Aid (US$ Billion), 2015-2019
Figure 10: Pakistan - Defense Budget Excluding US Aid (US$ Billion) vs Pakistani Defense Expenditure Including US Aid (US$ Billion), 2015-2019
Figure 11: Pakistan - GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2015-2024
Figure 12: Pakistan - Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
Figure 13: Pakistan - Defense Capital Expenditure (PKR Billion), 2015-2024
Figure 14: Pakistan - Defense Capital Expenditure (US$ Billion), 2015-2024
Figure 15: Pakistan - Defense Expenditure Breakdown (%), 2015-2024
Figure 16: Pakistan - Defense Expenditure Allocation by Service (PKR Billion), 2015-2024
Figure 17: Pakistan - Defense Expenditure Allocation by Service (US$ Billion), 2015-2024
Figure 18: Pakistan - Per Capita Defense Expenditure (US$), 2015-2024
Figure 19: Pakistan - Homeland Security Budget (PKR Billion), 2015-2024
Figure 20: Pakistan - Homeland Security Budget (US$ Billion), 2015-2024
Figure 21: Benchmarking with Key Markets - 2015-2019 vs 2020-2024
Figure 22: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2019 and 2024
Figure 23: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2019
Figure 24: Pakistan - Fighter and Multirole Aircraft Market Size (US$ Million), 2019-2024
Figure 25: Pakistan - Frigates MRO Market Size (US$ Million), 2019-2024
Figure 26: Pakistan - Land-Based C4ISR Market Size (US$ Million), 2019-2024
Figure 27: Top Pakistani Defense Procurements in Terms of Their Supplier Relationships
Figure 28: Pakistan - Defense Import Trend (US$ Million), 2014-2018 (TIV Values)
Figure 29: Pakistan - Defense Imports by Country (%), 2014-2018
Figure 30: Pakistan - Defense Imports by Category (%), 2014-2018
Figure 31: Industry Dynamics Porter’s Five Forces Analysis
Figure 32: Pakistan - Defense Procurements System, 2019
Figure 33: Pakistan Budgeting Process
Figure 34: The Pakistani Defense Market Share Analysis, 2019-2024
Figure 35: Boeing - Revenue Trend Analysis (US$ Billion), 2014-2018
Figure 36: Boeing - Operating Profit Trend Analysis (US$ Billion), 2014-2018
Figure 37: Boeing - Net Profit Trend Analysis (US$ Billion), 2014-2018
Figure 38: Raytheon - Revenue Trend Analysis (US$ billion), 2014-2018
Figure 39: Raytheon - Operating Profit Trend Analysis (US$ billion), 2012-2016
Figure 40: Raytheon - Net Profit Trend Analysis (US$ billion), 2012-2016
Figure 41: Lockheed Martin Corp. - Revenue Trend Analysis (US$ billion), 2014-2018
Figure 42: Lockheed Martin Corp. - Operating Profit Trend Analysis (US$ billion), 2014-2018
Figure 43: Lockheed Martin Corp. - Net Profit Trend Analysis (US$ billion), 2014-2018
Figure 44: Pakistan - GDP Per Capita (US$), 2015-2025
Figure 45: Pakistan - GDP, Current Prices (US$ Billion), 2015-2025
Figure 46: Pakistan - Export of Goods and Services (LCU Billion), 2005-2014
Figure 47: Pakistan - Imports of Goods and Services (LCU), 2005-2014
Figure 48: Pakistan - Local Currency per US$ Exchange Rate, 2015-2024
Figure 49: Pakistan - Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 50: Pakistan - Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 51: Pakistan - Government Cash Surplus/Deficit as a Percentage of GDP, 2005-2013
Figure 52: Pakistan - Goods Exports as a Percentage of GDP, 2005-2014
Figure 53: Pakistan - Goods Imports as a Percentage of GDP, 2005-2014
Figure 54: Pakistan - Service Imports as a Percentage of GDP, 2005-2014
Figure 55: Pakistan - Service Exports as a Percentage of GDP, 2005-2014
Figure 56: Pakistan - Foreign Direct Investment (US$ Billion), 2005-2014
Figure 57: Pakistan - Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
Figure 58: Pakistan - Mining, Manufacturing, Utilities Output (PKR Billion), 2005-2014
Note: Product cover images may vary from those shown
  • Karachi Shipyard & Engineering Works (KSEW)
  • Pakistan Aeronautical Complex (PAC)
  • Pakistan Ordnance Factories (POF)
  • Pakistan Space and Upper Atmosphere Research Commission (SUPARCO)
  • Heavy Industries Taxila (HIT)
  • The Heavy Mechanical Complex (HMC)
  • Surveillance and Target Unmanned Aircraft (SATUMA)
  • Boeing
  • Raytheon
  • Lockheed Martin
  • Chengdu Aircraft Industry Group
  • Turkish Aerospace Industries (TAI)
  • Aselsan
Note: Product cover images may vary from those shown
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