Future of the South AfricanDefense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2021

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The South African defense budget values US$4.1 billion in 2016, dropping from US$4.6 billion in 2012, and registered a CAGR of -2.56% during 2012–2016. Even though the actual budget increased in local currency, it showed a downward trend in terms of dollar value owing to variations in the exchange rate. However, modest growth in defense expenditure is expected during the forecast period at a CAGR of 1.83%, to reach a value US$4.6 billion in 2021. The country’s defense budget is mainly driven by factors such as modernization initiatives, participation in peacekeeping missions, and border security challenges.

Scope

• During 2012–2016, South African defense expenditure registered a growth rate of -2.56%,decreasing from US$4.6billion in 2012 to US$4.1 billion in 2016

• South African military expenditure, valued at US$4.1billion in 2016, is expected to increase to US$4.6 billion by 2021, registering a CAGR of 1.83% over the forecast period

• South African military expenditure will be driven by the country’s participation in peacekeeping programs, border security challenges, and a focus on the modernization of its armed forces

• The Defense Ministry is expected to procure Naval Vessels, Transport Aircraft, and MIL-IT Software and Hardware

Reasons to Buy

This report will give the user confidence to make the correct business decisions based on a detailed analysis of the South African 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 South African defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

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

Table of Contents

1. Introduction

1.1. What is this Report About?

1.2. Definitions

1.3. Summary Methodology

1.4. SDI Research 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. South African defense expenditure expected to grow at a CAGR of XX% over the forecast period

3.1.2. Modernization initiatives, peacekeeping missions, and border security expected to drive defense expenditure

3.1.3. Military expenditure as a percentage of GDP is expected to increase during the forecast period

3.2. Analysis of Defense Budget Allocation

3.2.1. Capital expenditure share to remain constant over the forecast period

3.2.2. Capital expenditure expected to increase over the forecast period

3.2.3. „Others? Defense accounted for the largest percentage share of the overall defense budget

3.2.4. Army expenditure to grow at a modest pace over the forecast period

3.2.5. Naval expenditure expected to grow at a CAGR of XX% during the forecast period

3.2.6. Air force expenditure expected to increase over the forecast period

3.2.7. Per-capita defense expenditure expected to increase over the forecast period

3.3. Homeland Security Market Size and Forecast

3.3.1. Homeland security (HLS) expenditure expected to value US$XX billion in 2021

3.3.2. Homeland security expenditure to be driven by rising threat of global terrorism and high violent crime rates…

3.3.3. South Africa faces a high level of threat from foreign terrorist organizations

3.3.4. South Africa has a score of XX on the Terrorism Index

3.4. Benchmarking with Key Global Markets

3.4.1. South African defense expenditure expected to remain low compared to leading spenders

3.4.2. The country will continue to be a small player in the global defense market

3.4.3. South African defense expenditure as a percentage of GDP is lower than the majority of leading defense spenders

3.4.4. South Africa faces negligible threat from foreign terrorist organizations

3.5. Market Opportunities: Key Trends and Growth Stimulators

3.5.1. Naval Vessels:

3.5.2. Transport Aircraft:

3.5.3. MIL IT-Software:

4. Defense Procurement Market Dynamics

4.1. Import Market Dynamics

4.1.1. Defense imports expected to remain constant during the forecast period

4.1.2. Sweden dominated South African defense imports during 2010–2014

4.1.3. Aircraft were the major defense imports during 2010–2014

4.2. Export Market Dynamics

4.2.1. Defense export value declined significantly during 2011–2015

4.2.2. Ecuador dominates South African defense export market during 2011–2015

4.2.3. Armored vehicles accounted for the majority of country?s defense exports

5. Industry Dynamics

5.1. Five Forces Analysis

5.1.1. Bargaining power of supplier: low

5.1.2. Bargaining power of buyer: Medium

5.1.3. Barrier to entry: Medium

5.1.4. Intensity of rivalry: High

5.1.5. Threat of substitution: Medium

6. Market Entry Strategy

6.1. Market Regulation

6.1.1. Offset policy ensures support for local companies

6.1.2. FDI is channeled to benefit local business

6.2. Market Entry Route

6.2.1. Foreign OEMs find alternative routes into the market

6.2.2. Joint ventures and collaborations provide market entry opportunities

6.3. Key Challenges

6.3.1. Corruption and bribery

6.3.2. Lack of transparency

6.3.3. Lack of relevant defense policy

7. Competitive Landscape and Strategic Insights

7.1. Competitive Landscape Overview

7.2. Key Private Sector Companies

7.2.1. Denel: overview

7.2.2. Denel: Major Products and Services

7.2.3. Denel: recent announcements and strategic initiatives

7.2.4. Denel: alliances

7.2.5. Denel: recent contract wins

7.2.6. Denel: financial analysis

7.2.7. Ansys Limited: overview

7.2.8. Ansys Limited: Major Products and Services

7.2.9. Ansys Limited: alliances

7.2.10. Ansys Limited: Recent Contract Wins

7.2.11. Ansys Limited: financial analysis

7.3. Key Private Sector Companies

7.3.1. Reutech: overview

7.3.2. Reutech: products and services

7.3.3. Reutech: recent announcements and strategic initiatives

7.3.4. Reutech: alliances

7.3.5. Reutech: recent contract wins

7.3.6. Saab Grintek: overview

7.3.7. Saab Grintek: products and services

7.3.8. Saab Grintek: recent announcements and strategic initiatives

7.3.9. Saab Grintek: alliances

7.3.10. Saab Grintek: recent contract wins

7.3.11. Land Systems South Africa: overview

7.3.12. Land Systems South Africa: products and services

7.3.13. Land Systems South Africa: recent announcements and strategic initiatives.

7.3.14. Land Systems South Africa: alliances

7.3.15. Land Systems South Africa: recent contract wins

7.3.16. IVEMA: overview

7.3.17. IVEMA: products and services

7.3.18. IVEMA: recent contract wins

7.3.19. Aerosud: overview

7.3.20. Aerosud: products and services

7.3.21. Aerosud: recent announcements and strategic initiatives

7.3.22. Aerosud: alliances

7.3.23. Aerosud: recent contract wins

7.3.24. Turbomeca Africa: overview

7.3.25. Turbomeca Africa: products and services

7.3.26. Turbomeca Africa: alliances

7.3.27. Turbomeca Africa: recent contract wins

7.3.28. Global Armour: overview

7.3.29. Global Armour: products and services

7.3.30. Global Armour: recent announcements and strategic initiatives

7.3.31. Global Armour: alliances

7.3.32. Global Armour: recent contract wins

7.3.33. Milkor (Pty) Ltd: overview

7.3.34. Milkor (Pty) Ltd.: products and services

7.3.35. Milkor (Pty) Ltd.: recent announcements and strategic initiatives

7.3.36. Milkor (Pty) Ltd.: recent contract wins

7.3.37. Paramount Advanced Technologies: overview

7.3.38. Paramount Advanced Technologies: products and services

7.3.39. Paramount Advanced Technologies: recent announcements and strategic initiatives

7.3.40. Paramount Advanced Technologies: recent contract wins

7.3.41. Tellumat Defense: Overview

7.3.42. Tellumat Defense: products and services

7.3.43. Tellumat Defense: Recent announcements and strategic initiatives

7.3.44. Tellumat Defense: Alliances

7.3.45. Tellumat Defense: Recent contract wins

8. Business Environment and Country Risk

8.1. Economic Performance

8.1.1. GDP Per Capita

8.1.2. GDP, Current Prices

8.1.3. Local Currency Unit per USD

8.1.4. Exports of Goods and Services (LCU)

8.1.5. Imports of Goods and Services (LCU)

8.1.6. Gross National Disposable Income (USD Bn)

8.1.7. Goods Exports as % of GDP

8.1.8. Goods Imports as % of GDP

8.1.9. Government Cash Surplus/Deficit as % of GDP

8.1.10. Service Imports as % of GDP

8.1.11. Service Exports as % of GDP

8.1.12. Foreign Direct Investments

8.1.13. Net Foreign Direct Investments as % of GDP

8.1.14. Market Capitalization of listed companies (US$ Bn)

8.1.15. Market Capitalization of listed companies as % of GDP

8.2. Minerals

8.2.1. Mining, Manufacturing, Utilities Output

9. Appendix

9.1. About SDI

9.2. Disclaimer

Table

Table 1: South African Defense Expenditure (ZAR &US$ Billion), 2012–2021

Table 2: South African GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2012–2021

Table 3: South African Defense Budget Split Between Capital and Revenue Expenditure (%), 2012–2021

Table 4: South African Defense Capital Expenditure (US$ Billion), 2012–2021

Table 5: South African Defense Budget Split Between Army, Navy, Air Force and Others, 2012–2021

Table 6: South African Defense Expenditure budget for Army (ZAR&US$ billion), 2012–2021

Table 7: South African Defense Expenditure budget for Navy (ZAR &US$ billion), 2012–2021

Table 8: South African Defense Expenditure budget for Air Force (ZAR &US$ billion), 2012–2021

Table 9: South African Per-Capita Defense Expenditure (US$), 2012–2021

Table 10: South African Defense Expenditure (ZAR &US$ Billion), 2012–2021

Table 11: Benchmarking with Key Markets – 2012–2016 vs. 2017–2021

Table 12: SDI Terrorism Index

Table 13: Methodology for Offset Credits

Table 14: Denel – Product Focus

Table 15: Denel – Alliances

Table 16: Denel – Recent Contract Wins

Table 17: Ansys Limited – Product Focus

Table 18: Ansys Limited – Alliances

Table 19: Ansys Limited – Recent Contract Wins

Table 20: Reutech – Product Focus

Table 21: Reutech – Alliances

Table 22: Reutech – Recent Contract Wins

Table 23: Saab Grintek – Product Focus

Table 24: Saab Grintek – Alliances

Table 25: Saab Grintek – Recent Contract Wins

Table 26: Land Systems South Africa – Product Focus

Table 27: Land Systems South Africa – Alliances

Table 28: Land Systems South Africa – Recent Contract Wins

Table 29: IVEMA – Product Focus

Table 30: IVEMA – Recent Contract Wins

Table 31: Aerosud – Product Focus

Table 32: Aerosud – Alliances

Table 33: Aerosud – Recent Contract Wins

Table 34: Turbomeca Africa – Product Focus

Table 35: Turbomeca Africa – Alliances

Table 36: Turbomeca Africa – Recent Contract Wins

Table 37: Global Armour- Major Products & Services

Table 38:Global Armour- Alliances

Table 39: Aerosud – Recent Contract Wins

Table 40: Milkor (Pty) – Major Products & Services

Table 41: Milkor (Pty), Ltd. – recent contract wins

Table 42: Paramount Advanced Technologies – Major Products & Services

Table 43: Paramount Advanced Technologies – Recent contract wins

Table 44: Tellumat Defense- Major Products & Services

Table 45: Tellumat Defense- Alliances

Table 46: Tellumat Defense- Recent contract wins

Figures

Figure 1: South African Defense Expenditure (ZAR Billion), 2012–2021

Figure 2: South African Defense Expenditure (US$ Billion), 2012–2021

Figure 3: South African GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as a Percentage of GDP Growth, 2012–2021 18

Figure 4:South African Defense Budget Split Between Capital and Revenue Expenditure (%), 2012–2021

Figure 5: South African Defense Capital Expenditure (ZAR billion), 2012–2021

Figure 6: South African Defense Capital Expenditure (US$ billion), 2012–2021

Figure 7: South African Defense budget Split Between Army, Navy, Air Force and Others, 2012–2021

Figure 8: South African Defense Expenditure budget for Army (ZAR billion), 2012–2021

Figure 9: South African Defense Expenditure budget for Army (US$ billion), 2012–2021

Figure 10: South African Defense Expenditure for Navy (ZAR Billion), 2012–2021

Figure 11: South African Defense Expenditure for Navy (US$ million), 2012–2021

Figure 12: South African Defense Expenditure for Air Force (ZAR Billion), 2012–2021

Figure 13: South African Defense Expenditure for Air Force (US$ million), 2012–2021

Figure 14: South African Per-Capita Defense Expenditure (US$), 2012–2021

Figure 15: South African Homeland Security Budget (ZAR Billion), 2012–2021

Figure 16: South African Homeland Security Budget (US$ Billion), 2012–2021

Figure 17: SDI Terrorism Heat Map, 2016

Figure 18: SDI Terrorism Index, 2016

Figure 19: Benchmarking with Key Markets – 2012–2016 vs. 2017–2021

Figure 20: Defense Expenditure of the World?s Largest Military Spenders (US$ Billion), 2016and 2021

Figure 21: Defense Expenditure as Percentage of GDP of Largest Military Spenders (%), 2016

Figure 22: Naval Vessels Market Size (US$ Million), 2016–2026

Figure 23: Transport Aircraft Market Size(US$ Million), 2016–2026

Figure 24: MIL-IT Software Market Size (US$ Million), 2016–2026

Figure 25: South Africa Defense Imports Trend, 2010–2014

Figure 26: South African Defense Imports by Country (%), 2010–2014

Figure 27: South African Defense Imports by Category (%), 2010–2014

Figure 28: South Africa Defense Exports Trend, 2011–2015

Figure 29: South African Defense Exports by Country (US$ million), 2011–2015

Figure 30: South African?s Defense Exports by Category (%), 2011–2015

Figure 31: Industry Dynamics Porter?s Five Forces Analysis

Figure 32: Denel –Revenue Trend Analysis (2010–2014)

Figure 33: Denel –Net Profit Trend Analysis (2010-2014)

Figure 34: Ansys–Revenue Trend Analysis (2010–2014)

Figure 35: Ansys –Net Profit Trend Analysis (2010-2014)

Figure 36: South African GDP Per Capita, 2015–2025

Figure 37: South African GDP Current Prices, 2015–2025

Figure 38: South African LCU per USD, 2015–2024

Figure 39: South African Exports of Goods and Services (LCU), 2005–2014

Figure 40: South African LCU per USD, 2005–2014

Figure 41: South African Gross National Disposable Income (USD Bn), 2005–2014

Figure 42:South African Good Exports as (% of GDP), 2005–2014

Figure 43: South African Good Imports as (% of GDP), 2005–2014

Figure 44: South African Goods Balance (% GDP), 2005–2012

Figure 45: South African Service Imports (% GDP), 2005–2014

Figure 46: South African Service Exports (% GDP), 2005–2014

Figure 47: South African Foreign Direct Investments (BoP, current US$ billion), 2005–2014

Figure 48: South African Net Foreign Direct Investments (% GDP), 2005–2014

Figure 49: South African International Reserves, including gold (US$ billion), 2005–2012

Figure 50: South African Market Capitalization of listed companies (% of GDP), 2005–2012

Figure 51: South African Mining, Manufacturing, Utilities Output (US$ billion), 2005–2014

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