Future of the Jordanian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020

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Published: March 01, 2016 Report Code: GD-DF0357MR-ST

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Jordan’s defense budget increased marginally from US$1.70 billion in 2011 to US$1.71 billion in 2015, registering a CAGR of 0.27%. The slow growth rate can be attributed to the country’s struggling economy, high unemployment rates, lack of natural resources, and the burden of hosting a large refugee population. However, Jordan’s recent attempts to upgrade its military equipment are expected to drive its defense expenditure over the forecast period, which is projected to rise from US$1.8 billion in 2015 to US$1.9 billion by 2020, at a CAGR of 2.05%. The country is estimated to maintain the budget allocation for capital expenditure at an average of 3.3% over the forecast period • During 2011–2015, Jordanian defense expenditure registered a growth rate of 0.27%, increasing from US$1.70 billion in 2011 to US$1.71 billion in 2015 • Military expenditure is anticipated to register a CAGR of 2.05% during 2016–2020, to value US$1.9 billion in 2020 • Over the forecast period, the country’s budget for homeland security is expected to be US$8.8 billion cumulatively • The key areas of investment are expected to be armored vehicles, patrol boats, and border surveillance equipment

Scope

Strategic Defense Intelligence’sreport – Future of the Jordanian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020 offers detailed analysis of the industry with market size forecasts from 2016–2020. This report will also analyze factors that influence demand in the industry, key market trends, and challenges faced by industry participants.In particular, it provides an in-depth analysis of the following:

• Defense industry market size and drivers: detailed analysis of the defense industry during 2016–2020, including highlights of the demand drivers and growth stimulators. 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 the army, navy, and air force. It also details the key challenges faced by defense market participants within the country

• Porter’s Five Force analysis of the defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, 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 from 2015 to 2025

• Competitive landscape and strategic insights: including an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Reasons to Buy

Identify and track the global defense market and make regional comparisons to effectively target new revenue streams

Understand the importance of being led by the defense ministries in the military procurement market and define your strategies with insight on what your customers really want by analyzing recent orders, technical specifications, and the country’s expected investment pattern during 2016–2020

Make correct business decisions based on detailed analysis of the defense industry from 2016–2020,which includes the total competitive landscape of the sector with detailed profiles of the top domestic and foreign defense manufacturers along with information about their products, alliances, recent contract wins, and financial analysis

Determine prospective investment areas by gaining an in-depth understanding of the industry in terms of market opportunities

Channel resources by identifying various military requirements that are expected to generate revenues across different sectors during 2016–2020

King Abdullah II Design and Development Bureau (KADDB)

Table of Contents

1 Introduction

1.1. What is this Report About?

1.2. Definitions

1.3. Summary Methodology

1.4. SDI Terrorism Index

1.5. About Strategic Defense Intelligence

2 Executive Summary

3 Market Attractiveness and Emerging Opportunities

3.1. Defense Market Size Historical and Forecast

3.1.1. Jordanian defense budget expected to increase at a CAGR of

2.05% over the forecast period

3.1.2. Hostility among the neighboring countries and foreign military aid are expected to be key factors driving defense expenditure

3.1.3. Jordanian defense expenditure as a percentage of GDP is expected to average 3% over the forecast period

3.2. Analysis of Defense Budget Allocation

3.2.1. Revenue expenditure expected to continue to take precedence over capital expenditure during the forecast period

3.2.2. Financial Aid from the US contributes a major share of the country's capital expenditure

3.2.3. Per capita defense expenditure to grow steadily over the forecast period

3.3. Homeland Security Market Size and Forecast

3.3.1. Jordanian homeland security expenditure expected to increase at a CAGR of

5.98%

3.3.2. Internal conflicts and unauthorized activities in refugee camps will be the key factors driving homeland security expenditure

3.3.3. Jordan considered at 'some risk' of terrorist attack

3.4. Benchmarking with Key Global Markets

3.4.1. Jordan ranks among the lowest defense spending countries in the world

3.4.2. Jordan ranks low in terms of defense expenditure as a percentage of GDP

3.4.3. Jordan is at some risk of terror attacks

3.5. Market Opportunities: Key Trends and Drivers

3.5.1. Demand for border security systems expected to rise

3.5.2. Demand for armored vehicleslikely to surge over the forecast period

3.5.3. Procurement of patrol boats expected to increase

4 Defense Procurement Market Dynamics

4.1. Import Market Dynamics

4.1.1. The majority of Jordan's military equipment is generated through foreign imports

4.1.2. The Netherlands, the US, and Belgiumwere the dominant suppliers of defense equipment toJordan

4.1.3. Aircraft and missiles dominated Jordanian defense imports

4.2. Export Market Dynamics

4.2.1. Defense exports expected to grow during the forecast period

4.2.2. Pakistan and Kenya accounted for the largest shares in Jordan's total defense exports

4.2.3. Defense exports mainly include aircraftand armored vehicles

5 Industry Dynamics

5.1. Five Forces Analysis

5.1.1. Bargaining power of supplier: high

5.1.2. Bargaining power of buyer: low

5.1.3. Barrier to entry: medium

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. The Jordanian Government allows FDI in the defenseindustry

6.1.2. Jordandoes not imposeany offset obligations

6.2. Market Entry Route

6.2.1. Government-to-government dealsare the preferred market entry route for foreign OEMs

6.2.2. Joint venturesand technology transferform attractive entry routesfor foreign manufacturers

6.3. Key Challenges

6.3.1. Small defense budget hinders the entry of foreign companies in Jordan

6.3.2. Corruption acts as an obstacle for market entry

7 Competitive Landscape and Strategic Insights

7.1. Competitive Landscape Overview

7.1.1. Jordanian defense sector is dominated by foreign competitors

7.2. Key DomesticCompanies

7.2.1. KADDB: Overview

7.2.2. KADDB: Major Products and Services

7.2.3. KADDB: Recent Announcements and Strategic Initiatives

7.2.4. KADDB: Alliances

8 Business Environment and Country Risk

8.1. Economic Performance

8.1.1. GDP per Capita

8.1.2. Gross Domestic Product

8.1.3. Exports of Goods and Services

8.1.4. Imports of Goods and Services

8.1.5. Gross National Disposable Income

8.1.6. LCU per US$ (period average)

8.1.7. Market Capitalization of Listed Companies

8.1.8. Market Capitalization of Listed Companies as a % GDP

8.1.9. Total Government Cash Surplus/Deficit as % of GDP

8.1.10. Goods Exports as a % of GDP

8.1.11. Goods Imports as a % of GDP

8.1.12. Services Imports as a % of GDP

8.1.13. Services Exports as a % of GDP

8.2. Minerals

8.2.1. Mining, Manufacturing, Utilities Output

9 Appendix

9.1. About SDI

9.2. Disclaimer

Table

Table 1: Jordanian Defense Expenditure (US$ Billion), 2011-2015

Table 2: Jordanian Defense Expenditure (US$ Billion), 2016-2020

Table 3: Jordanian Defense Expenditure (JOD Billion), 2011-2015

Table 4: Jordanian Defense Expenditure (JOD Billion), 2016-2020

Table 5: Jordanian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2011-2015

Table 6: Jordanian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016-2020

Table 7: Jordanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011-2015

Table 8:JordanianDefense Budget Split Between Capital and Revenue Expenditure (%), 2016-2020

Table 9: Jordan's Capital Expenditure Split by Allocated Capital Expenditure and US Military Aid (US$ Million),2011-2015

Table 10: Jordan's Capital Expenditure Split by Allocated Capital Expenditure and US Military Aid (US$ Million),2016-2020

Table 11: Jordanian Per Capita Defense Expenditure (US$), 2011-2015

Table 12: Jordanian Per Capita Defense Expenditure (US$), 2016-2020

Table 13: Jordanian Homeland Security Expenditure (US$ Billion), 2011-2015

Table 14: Jordanian Homeland Security Budget (US$ Billion), 2016-2020

Table 15: Jordanian Homeland Security Expenditure (JOD Billion), 2011-2015

Table 16: Jordanian Homeland Security Budget (JOD Billion), 2016-2020

Table 17: Benchmarking with Key Markets – 2011-2015 vs. 2016-2020

Table 18: Terrorism Index

Table 19: KADDB- Major Products & Services

Table 20: KADDB- Alliances

Figures

Figure 1: Jordanian Defense Expenditure (US$ Billion), 2011-2015

Figure 2: Jordanian Defense Expenditure (US$ Billion), 2016-2020

Figure 3: Jordanian Defense Expenditure (JOD Billion), 2011-2015

Figure 4: Jordanian Defense Expenditure (JOD Billion), 2016-2020

Figure 5: Jordanian GDP Growth vs. Defense Expenditure Growth and Defense Expenditures Percentage of GDP Growth, 2011-2015

Figure 6: Jordanian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016-2020

Figure 7: Jordanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011-2015

Figure 8: Jordanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016-2020

Figure 9:Jordan'sCapital Expenditure Split by Allocated Capital Expenditure and US Military Aid (US$ Million), 2011-2015

Figure 10: Jordan's Capital Expenditure Split by Allocated Capital Expenditure and US Military Aid (US$ Million),2016-2020

Figure 11:Jordanian Per Capita Defense Expenditure (US$), 2011-2015

Figure 12: Jordanian Per Capita Defense Expenditure (US$), 2016-2020

Figure 13: Jordanian Homeland Security Expenditure (US$ Billion), 2011-2015

Figure 14: Jordanian Homeland Security Budget (US$ Billion), 2016-2020

Figure 15: Jordanian Homeland Security Expenditure (JOD Billion), 2011-2015

Figure 16: Jordanian Homeland Security Budget (JOD Billion), 2016-2020

Figure 17: Terrorism Heat Map, 2015

Figure 18: Terrorism Index, 2015

Figure 19: Benchmarking with Key Markets – 2011-2015 vs. 2016-2020

Figure 20: Benchmarking with World's Largest Defense Spenders (US$ Billion), 2015 and 2020

Figure 21: Benchmarking with Large Defense Spenders as % of GDP – 2015

Figure 22: JordanianDefense Import Trend, 2011-2015 (TIV values)

Figure 23: Jordanian Defense Imports by Country (%), 2011-2015

Figure 24: Jordanian Defense Imports by Weapon Category (%), 2011-2015

Figure 25: Jordanian Defense Export Trend, 2011-2015 (TIV values)

Figure 26: Jordanian Defense Exports by Country (%), 2011-2015

Figure 27: Jordanian Defense Exports by Weapon Category (%), 2011-2015

Figure 28: Industry Dynamics – Porter's Five Forces Analysis

Figure 29: Jordanian GDP per Capita (US$), 2015-2024

Figure 30: Jordanian GDP (current US$ Billion), 2015-2024

Figure 31: Jordanian Exports of Goods and Services (LCU), 2005-2014

Figure 32: Jordanian Imports of Goods and Services (LCU), 2005-2014

Figure 33: Jordanian Gross National Disposable Income (US$ Billion), 2003-2012

Figure 34: Jordanian LCU per US$, 2015-2024

Figure 35: Jordanian Market Capitalization of Listed Companies (US$ Billion), 2003-2012

Figure 36: Jordanian Market Capitalization of Listed Companies (% of GDP), 2003-2012

Figure 37: Jordanian Total Government Cash Surplus/Deficit as % of GDP, 2003-2012

Figure 38: Jordanian Goods Exports as a % of GDP, 2005-2012

Figure 39: Jordanian Goods Imports as a % of GDP, 2005-2013

Figure 40: Jordanian Services Imports as a % of GDP, 2005-2013

Figure 41: Jordanian Services Exports as a % of GDP, 2005-2013

Figure 42: Mining, Manufacturing, Utilities Output (in Millions), 2005-2014

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