The South African Defense Sector Market Opportunities And Entry Strategies, Analyses And Forecas

in Defense


Summary

This report offers insights into the market opportunities and entry strategies adopted by foreign OEMs
(original equipment manufacturers) to gain a market share in the South African defense industry. In
particular, it offers in-depth analysis of the following:

Market opportunity and attractiveness: detailed analysis of the current industry size and
growth expectations during 20102015, including highlights of the key growth stimulators. It also
benchmarks the industry against key global markets and provides detailed understanding of
emerging opportunities in specific areas.
Procurement dynamics: trend analysis of imports and exports, together with its implications and impact on the South African defense industry.
Industry structure: five forces analysis to identify various power centers in the industry and how these are likely to develop in the future.
Market entry strategy: analysis of possible ways to enter the market, together with detailed descriptions of how existing players have entered the market, including key contracts, alliances, and strategic initiatives.
Competitive landscape and strategic insights: analysis of competitive landscape of the defense industry in South Africa. It provides an overview of key defense companies (both domestic and foreign), together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
Business environment and country risk: a range of drivers at country level, assessing business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and
availability, labor force, demographics, and political and social risk.


Scope

analysis of Defense industry market size from 2004 through 2009 and forecasts till 2015
analysis of defense budget allocation
Benchmarking with key global markets
Market opportunities
Defense procurement dynamics
Industry dynamics
Market entry strategy
Competitive landscape and strategic insights
Business environment and country risk

Reasons To Buy

Gain insight into South African defense industry with current, historic and forecast market values
Get insight on market opportunity and attractiveness
Get insight on industry procurement dynamics
Gain insight on industry structure
Gain insight into the regulations governing the South African defense industry and the potential market entry strategies with an expert analysis of the competitive structure
Identify top companies of the South African defense industry along with profiles of all those companies


Key Highlights

The South African defense market, though not particularly large, is a moderately growing market with a defense expenditure allocation of US$3.6 billion for 2009. Post-apartheid, the country witnessed a significant decline in its defense budget, both in terms of value and as a percentage of GDP. Furthermore, a peaceful neighboring environment and very low terrorist activity levels contribute to the recent overall reductions in defense spending. Nevertheless, although the threat from external aggression is low, the country has one of the highest crime rates in the world. However, its hosting of the FIFA World Cup 2010 and concerns about the future prospects of the country, should an incident have occurred, has intensified the South African governments focus on tackling crime. Furthermore, as the country is engaged in various peacekeeping missions under the United Nations, African Union and Southern African Development Community, external funding for these missions additionally increases the defense budget.
By the end of 2015, Progressive Intelligence estimates that South Africas defense expenditure as a percentage of its gross domestic product (GDP) will rise from its current level of 1.3% to 1.5%. This translates as budget increase from US$3.6 billion in 2009 to US$5.6 billion in 2015, and a compound annual growth rate (CAGR) of 9.06%. Currently, 78% of the defense budget is allocated for revenue expenditure, and the remaining for capital expenditure, a trend that is expected to continue until 2015. As a result of the challenges caused by increased crime levels, it is expected that there will be a greater immediate demand for monitoring and security check equipment, including CCTV. Over the next two to three years, it is also predicted that there will be a rise in demand for UAVs (unmanned aerial vehicles), military transport fleet, maritime surveillance equipments, including patrol aircrafts, landward defense systems, and survey vessels


Keywords

Defense, South Africa, Denel, Ansys Limited, Reutech, Saab Grintek, Land Systems South Africa, IVEMA (Pty) Ltd , Aerosud, Turbomeca Africa, Global Armour, Milkor (Pty) Ltd, Advanced Technologies and Engineering, Tellumat Defense, , , , , , , , , , , , , , , ,

Table of Contents :
1 Introduction
1.1 About this Report
1.2 Definitions
1.3 Methodology
1.3.1 Secondary research
1.3.2 Primary research
1.3.3 Conventions
1.4 ICD Research Terrorism Index
1.5 About ICD Research Defense Intelligence Centre
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities

List of Tables
Table 1: Top Country Ranking by Value of Arms Imports, 2005-09*
Table 2: Top Country Ranking by Value of Arms Exports, 2005-09*
Table 3: ICD Research Terrorism Index
Table 4: Offset Regulations in South Africa
Table 5: Methodology for Offset Credits
Table 6: Denel - Alliances
Table 7: Denel Recent Contract Wins
Table 8: Ansys Limited - Alliances
Table 9: Ansys Limited Recent Contract Wins
Table 10: Reutech - Alliances

List of Figures
Figure 1: South Africa Defense Market Size and Forecast (US$ billion), 200515F
Figure 2: South Africas Defense Expenditure as a percentage of GDP, 20052015F
Figure 3: Split between Revenue and Capital Expenditure (%), 20052015F
Figure 4: South African Defense Capital Expenditure Breakup (%), 20052015F
Figure 5: South African Defense Budget and Capital Expenditure Share for Army, Navy, and Air force - 2010
Figure 6: South African Capital Expenditure Budget for Army (US$ million), 200515F
Figure 7: South African Capital Expenditure Budget for Air Force (US$ million), 200515F
Figure 8: South African Capital Expenditure Budget for Navy (US$ million), 200515F
Figure 9: South African Capital Expenditure Budget for Defense Intelligence (US$ million), 200515F
Figure 10: ICD Research Terrorism Heat Map
Figure 11: ICD Research Terrorism Heat Index, 2009
Figure 12: Benchmarking with Key Global Markets Historical vs. Expected Defense Budget Growth
Figure 13: Defense Expenditure of the Largest Military Spenders in the World, 2009 and 2015F (US$ billion)
Figure 14: Defense Expenditure of Largest Military Spenders as a percentage of GDP, 2009
Figure 15: South African Defense Imports TIV Value (US$ million), 2005 09*
Figure 16: South African Defense Imports TIV Value by Country (US$ million), 200509*
Figure 17: South African Defense Imports by Country (%), 2009*
Figure 18: South African Defense Imports Category (%), 20052009*
Figure 19: South African Defense Exports (US$ million), 200509*
Figure 20: South African Defense Exports by Region (US$ million), 200509*
Figure 21: South Africas Defense Exports Share by Country (%), 2009*
Figure 22: South Africas Defense Exports Category (%), 200509 *
Figure 23: Industry Dynamics Porters Five Forces Analysis
Figure 24: Denel - Revenue Trend Analysis (US$ million), FY 200509
Figure 25: Denel Operating Profit Trend Analysis, (US$ million), FY 200509


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This article was published on 2010/12/17