Future of the Netherlands’ Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023

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The Future of the Netherlands Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2023, published by Strategic Defense Intelligence, 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.

Synopsis

This report offers detailed analysis of the The Netherlands 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 Netherlands defense industry market size and drivers: detailed analysis of the Netherlands defense industry during 2019-2023, 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
– Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
– Market opportunities:list of the top ten defense investment opportunities over the next 5 years
– Competitive landscape and strategic insights: analysis of the competitive landscape of the Netherlands defense industry

Scope

– The Netherlands is the seventh-largest economy in the Eurozone.

– During the historic period, defense expenditure increased at a compound annual growth rate (CAGR) of 2.36%, from US$10.1 billion in 2014 to US$11.1 billion in 2018.

– The country’s defense budget is anticipated to average 1.5% of GDP over the forecast period 2019-2023.

Reasons to Buy

– This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Netherlands 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 Netherlands defense industry covering sections including demand drivers, Key Trends , and latest industry contracts

Fokker Technologies
Damen Schelde Naval Shipbuilding
TNO Defense
Thales Nederland
Fokker Aerostructures
RH Marine Group
Lockheed Martin Corp.

Table of Contents

Table of Contents

1. Introduction 8

1.1. What is this Report About? 8

1.2. Definitions 8

1.3. Summary Methodology 10

1.4. About Strategic Defense Intelligence 11

2. Executive Summary 12

3. Market Attractiveness and Emerging Opportunities 14

3.1. Current Market Scenario 15

3.1.1. Primary threat perception 15

3.1.2. Military Doctrine & Strategy 16

3.1.3. Military Fleet Size 20

3.1.4. Procurement Programs 23

3.1.5. Ongoing procurement programs 23

3.1.6. Future procurement programs 24

3.1.7. Top Procurement Programs By Value (US$ Million) 2018-2023 25

3.1.8. Social, Political and Economic Environment & Support for Defense Projects 26

3.1.9. Political & Strategic Alliances 27

3.2. Defense Market Size Historical and Forecast 28

3.2.1. Netherland defense budget to increase at a CAGR of

4.07% over the forecast period 28

3.2.2. Military modernization, and commitment levels to NATO, UN and EU stipulations 30

3.2.3. Netherlands defense expenditure as a percentage of GDP expected to decrease 31

3.3. Analysis of Defense Budget Allocation 33

3.3.1. Share of Capital Expenditure expected to average

22.2% over forecast period 33

3.3.2. Capital expenditure expected to increase at a CAGR of

3.71% over the forecast period 35

3.3.3. The Others segment accounted for the largest percentage share 37

3.3.4. Army will account for the second highest share in the Netherlands defense budget 39

3.3.5. Per capita defense expenditure set to increase 43

3.4. Homeland Security Market Size and Forecast 45

3.4.1. Homeland security market is expected to register a CAGR of

4.30% over the forecast period 45

3.4.2. Counter measures for drug trafficking and terrorism to drive homeland security expenditure 47

3.4.3. Netherlands falls under the “moderate risk of terrorism” category 48

3.4.4. The Netherlands faces some level of threat from foreign terrorist organizations 49

3.4.5. Netherlands has a terrorism index score of

2.4 51

3.5. Benchmarking with Key Global Markets 52

3.5.1. Netherlands defense budget expected to be marginally increase over the forecast period 52

3.5.2. Netherlands military budget is limited compared to other countries 54

3.5.3. The Netherlands is expected to spend an average of

1.5% of GDP on defense over the forecast period 55

3.6. Market Opportunities: Key Trends and Growth Stimulators 56

3.6.1. Top 10 Defense market sectors by value (US$ Million) – Projections over period 2018-2023 56

3.6.2. Land-Based C4ISR 57

3.6.3. Fighters and multi-role aircraft 58

3.6.4. Networking 59

4. Defense Procurement Market Dynamics 60

4.1. Import Market Dynamics 62

4.1.1. Defense imports are expected to increase slightly over the forecast period 62

4.1.2. US was the leading supplier of arms to Netherlands during 2012-2016 63

4.1.3. Aircraft and armored vehicles dominate military hardware imports 64

4.2. Export Market Dynamics 65

4.2.1. Arms exports to recover during the forecast period 65

4.2.2. Netherlands arms exports expected to increase 66

4.2.3. Sensors and ships are the main exported defense products 67

5. Industry Dynamics 68

5.1. Five Forces Analysis 68

5.1.1. Bargaining power of supplier: medium to low 69

5.1.2. Bargaining power of buyer: medium 69

5.1.3. Barrier to entry: medium 69

5.1.4. Intensity of rivalry: high 69

5.1.5. Threat of substitution: low to high 69

6. Market Entry Strategy 70

6.1. Market Regulation 70

6.1.1. Offset policy aids development of domestic defense industry and research activities 70

6.1.2. FDI in defense sector is unrestricted without review 72

6.2. Market Entry Route 73

6.2.1. Budgeting Process 73

6.2.2. Procurement Policy & Process 74

6.2.3. Acquisition of domestic companies is an effective market entry route for foreign firms 75

6.2.4. Collaborations provide market entry opportunities 75

6.2.5. Joint ventures, partnerships and subcontracting offer alternative entry strategies 75

6.2.6. Joint R&D programs provide an effective strategy to gain market access 76

6.3. Key Challenges 77

6.3.1. Inadequate government support for defense industry 77

6.3.2. Defense procurements affected by European debt crisis 77

7. Competitive Landscape and Strategic Insights 78

7.1. Competitive Landscape Overview 78

7.2. Key Domestic Companies 81

7.2.1. Fokker Technologies: overview 81

7.2.2. Fokker Technologies: products 82

7.2.3. Fokker Technologies: recent announcements and strategic initiatives 82

7.2.4. Fokker Technologies: alliances 83

7.2.5. Fokker Technologies: recent contract wins 85

7.2.6. Damen Schelde Naval Shipbuilding: overview 86

7.2.7. Damen Schelde Naval Shipbuilding: products 86

7.2.8. Damen Schelde Naval Shipbuilding: recent announcements and strategic initiatives 86

7.2.9. Damen Schelde Naval Shipbuilding: alliances 88

7.2.10. Damen Schelde Naval Shipbuilding: recent contract wins 88

7.2.11. TNO Defense: overview 90

7.2.12. TNO Defense: products and services 90

7.2.13. TNO Defense: recent announcements and strategic initiatives 92

7.2.14. TNO Defense: alliances 93

7.2.15. TNO Defense: recent contract wins 93

7.2.16. Thales Nederland: overview 94

7.2.17. Thales Nederland: products and services 94

7.2.18. Thales Nederland: recent announcements and strategic initiatives 96

7.2.19. Thales Nederland: alliances 96

7.2.20. Thales Nederland: recent contract wins 97

7.2.21. Fokker Aerostructures: overview 99

7.2.22. Fokker Aerostructures: services 99

7.2.23. Fokker Aerostructures: recent announcements and strategic initiatives 99

7.2.24. Fokker Aerostructures: alliances 100

7.2.25. Fokker Aerostructures: recent contract wins 100

7.2.26. RH Marine Group: overview 101

7.2.27. RH Marine Group: products 101

7.2.28. RH Marine Group: recent announcements and strategic initiatives 101

7.2.29. RH Marine Group: alliances 101

7.2.30. RH Marine Group: recent contract wins 102

7.2.31. Lockheed Martin: overview 103

7.2.32. Lockheed Martin: products 103

7.2.33. Lockheed Martin: recent announcements and strategic initiatives 103

7.2.34. Lockheed Martin: alliances 104

7.2.35. Lockheed Martin: recent contract wins 105

7.2.36. Lockheed Martin Corp.: financial analysis 106

8. Business Environment and Country Risk 108

8.1. Economic Performance 108

8.1.1. Gross Domestic per Capita 108

8.1.2. Gross Domestic Product, current US$ 109

8.1.3. Exports of Goods and Services 110

8.1.4. Imports of Goods and Services 111

8.1.5. Gross National Disposable Income 112

8.1.6. Local Currency Unit per US$ 113

8.1.7. Market Capitalization of Listed Companies 114

8.1.8. Market Capitalization of Listed Companies as a % of GDP 115

8.1.9. Government Cash Surplus/Deficit 116

8.1.10. Goods Exports as a % of GDP 117

8.1.11. Goods Imports as a % of GDP 118

8.1.12. Services Imports as a % of GDP 119

8.1.13. Services Exports as a % of GDP 120

8.1.14. Net Foreign direct investment, (BoP, current US$ Bn) 121

8.1.15. Net FDI as a % of GDP 122

8.1.16. Mining, Manufacturing, Utilities Output 123

9. Appendix 124

9.1. About SDI 124

9.2. Disclaimer 124

Table

List of Tables

Table 1: The Deployment of the Netherlands Armed Forces vs Defense Tasks 16

Table 2: The Netherlands Army Strength 20

Table 3: The Netherlands Navy Strength 21

Table 4: The Netherlands Air Force Strength 22

Table 5: The Netherlands – Ongoing Procurement Programs 23

Table 6: The Netherlands – Future Procurement Programs 24

Table 7: The Netherlands top Defense Procurement Programs by Value (US$ Million) 2018-2023 25

Table 8: The Netherlands Defense Expenditure (EUR Billion and US$ Billion), 2014-2023 28

Table 9: The Netherlands – GDP Growth vs Defense Expenditure as a Percentage of GDP, 2014-2023 31

Table 10: The Netherlands – Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 33

Table 11: The Netherlands – Defense Capital Expenditure (EUR Billion and US$ Billion), 2014-2023 35

Table 12: The Netherlands – Defense Expenditure Breakdown (%), 2014-2023 37

Table 13: The Netherlands Defense Budget Allocations in EUR Billion – Breakdown by Services (Army, Navy, Air Force, Support Command and Others) 2014-2023 39

Table 14: The Netherlands Defense Budget Allocations in US$ Billion – Breakdown by Services (Army, Navy, Air Force, Support Command and Others) 2014-2023 41

Table 15: The Netherlands – Per Capita Defense Expenditure (US$), 2014-2023 43

Table 16: The Netherlands – Homeland Security Expenditure (EUR Billion and US$ Billion), 2014-2023 45

Table 17: Terrorism Index, 2018 49

Table 18: The Netherlands – Benchmarking with Key Markets, 2014-2018 vs 2019-2023 52

Table 19: Top 10 Sectors of the Netherlands Defense Market by Value (US$ Million) – 2018-2023 56

Table 20: Offset Regulations in the Netherlands 70

Table 21: The Netherlands Budget Formation Timetable: 73

Table 22: Top 10 Defense Suppliers in The Netherlands Defense Industry – By Value (US$ Million) 2018-2023 78

Table 23: The Netherlands – Competitive Landscape of the Defense Industry 79

Table 24: Fokker Technologies – Product Focus 82

Table 25: Fokker Technologies- Alliances 83

Table 26: Fokker Technologies- Recent Contract Wins 85

Table 27: Damen Schelde Naval Shipbuilding- Product focus 86

Table 28: Damen Schelde Naval Shipbuilding- Alliances 88

Table 29: Damen Schelde Naval Shipbuilding – Contracts 88

Table 30: TNO Defense- Product focus 90

Table 31: TNO Defense- Alliances 93

Table 32: TNO Defense- Recent Contract Wins 93

Table 33: Thales Nederland- Product focus 94

Table 34: Thales Nederland- Alliances 96

Table 35: Thales Nederland- Recent Contract Wins 97

Table 36:Fokker Aerostructures – Service focus 99

Table 37:Fokker Aerostructures- Alliances 100

Table 38: Fokker Aerostructures- Recent Contract Wins 100

Table 39: RH Marine Group – Product focus 101

Table 40: RH Marine Group – Alliances 101

Table 41: RH Marine Group – Recent Contract Wins 102

Table 42:Lockheed Martin- Product focus 103

Table 43: Lockheed Martin- Alliances 104

Table 44: Lockheed Martin- Recent Contract Wins 105

Figures

List of Figures

Figure 1: The Netherlands – Defense Expenditure (EUR Billion), 2014-2023 29

Figure 2: The Netherlands – Defense Expenditure (US$ Billion), 2014 – 2023 29

Figure 3: The Netherlands – GDP Growth vs. Defense Expenditures as Percentage of GDP Growth, 2014-2023 32

Figure 4: The Netherlands – Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 34

Figure 5: The Netherlands – Defense Capital Expenditure (EUR Billion), 2014-2023 36

Figure 6: The Netherlands – Defense Capital Expenditure (US$ Billion), 2014-2023 36

Figure 7: The Netherlands – Defense Expenditure Breakdown (%), 2014-2023 38

Figure 8: The Netherlands Defense Budget in EUR Billion – Breakdown by Services (Army, Navy, Air Force, Support Command and Others) 2014-2023 40

Figure 9: The Netherlands Defense Budget in US$ Billion – Breakdown by Services (Army, Navy, Air Force, Support Commands and Others) 2014-2023 42

Figure 10: The Netherlands – Per Capita Defense Expenditure (US$), 2014-2023 44

Figure 11: The Netherlands – Homeland Security Budget (EUR Billion), 2014-2023 46

Figure 12: The Netherlands – Homeland Security Budget (US$ Billion), 2014-2023 46

Figure 13: Terrorism Heat Map, 2018 48

Figure 14: The Netherlands – Terrorism Index, 2018 51

Figure 15: The Netherlands – Benchmarking with Key Markets, 2014-2018 vs 2019-2023 53

Figure 16: The Netherlands – Benchmarking with World’s Largest and Top Regional Defense Spenders (US$ Billion), 2018 and 2023 54

Figure 17: The Netherlands – Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 55

Figure 18: The Netherlands – Land-Based C4ISR Market Size (US$ Million), 2018-2023 57

Figure 19: The Netherlands – Fighters and Multi-Role Aircraft Market Size (US$ Million), 2018-2023 58

Figure 20: The Netherlands – Networking Market Size (US$ Million), 2018-2023 59

Figure 21: The Netherlands Defense Procurements In Terms Of Their Supplier Relationships 61

Figure 22: The Netherlands – Defense Import Trends, 2012-2016 (TIV Values US$ Million) 62

Figure 23: The Netherlands – Defense Imports by Country (%), 2012-2016 63

Figure 24: The Netherlands – Defense Imports by Category (%), 2012-2016 64

Figure 25: The Netherlands – Defense Export Trends, 2012-2016 (TIV Values US$ Million) 65

Figure 26: The Netherlands Defense exports by Country (%), 2012-2016 66

Figure 27: The Netherlands Defense Exports by Category (%), 2012-2016 67

Figure 28: Industry Dynamics – Porter’s Five Forces Analysis 68

Figure 29: Lockheed Martin Corp. – Revenue Trend Analysis (US$ billion), 2012-2016 106

Figure 30: Lockheed Martin Corp. – Operating Profit Trend Analysis (US$ billion), 2012-2016 107

Figure 31: Lockheed Martin Corp. – Net Profit Trend Analysis (US$ billion), 2012-2016 107

Figure 32: Netherlands GDP Per Capita US$, 2015-2025 108

Figure 33: Netherlands Gross Domestic Product (current US$ Billion), 2015-2025 109

Figure 34: Netherlands Exports of goods and services (LCU Billion), 2005-2014 110

Figure 35: Netherlands Imports of goods and services (LCU Billion), 2005-2014 111

Figure 36: Netherlands gross national disposable income (US$ Billion), 2005 – 2013 112

Figure 37: Netherlands LCU per US$, 2015-2024 113

Figure 38: Netherlands Market Capitalization of listed Companies (US$ Billion), 2005-2012 114

Figure 39: Netherlands Market Capitalization of listed companies as a % of GDP, 2005-2012 115

Figure 40: Netherlands Government cash Surplus/deficit as a % of GDP, 2005-2012 116

Figure 41: Netherlands Goods Exports as a % of GDP, 2005-2014 117

Figure 42: Netherlands Goods Imports as a % of GDP, 2005-2014 118

Figure 43: Netherlands Services Imports as a % of GDP, 2005-2014 119

Figure 44: Netherlands Services Exports as a % of GDP, 2005-2014 120

Figure 45: Netherlands Net Foreign Direct Investment (current US$ Billion), 2005-2014 121

Figure 46: Netherlands Net FDI as a % of GDP, 2005-2014 122

Figure 47: Netherlands Mining, Manufacturing, Utilities Output(US$ Billion), 2005-2014 123

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