The South African Defense Sector – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015 by ICDResearch

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									The South African Defense Sector –
Market Opportunities and Entry
Strategies, Analyses and Forecasts to
2015
Market Intelligence Report

Reference code: ICDDF0012MR10
Published: APRIL 2010

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© ICD Research. This report is a licensed product and is not to be photocopied
TABLE OF CONTENTS



LIST OF TABLES..........................................................................................................................................8
1 Introduction......................................................................................................................................... 11
1.1       About this Report............................................................................................................................... 11
1.2       Definitions........................................................................................................................................... 11
1.3       Methodology....................................................................................................................................... 13
1.3.1 Secondary research ................................................................................................................................ 13
1.3.2 Primary researc h .................................................................................................................................... 13
1.3.3 Conventions ........................................................................................................................................... 14
1.4       ICD Research Terrorism Index ......................................................................................................... 14
1.5       About ICD Research Defense Intelligence Centre ......................................................................... 14
2      Executive Summary .......................................................................................................................... 15
3      Market Attractiveness and Emerging Opportunities ............................................................... 17
3.1       Defense Market Size and Forecast .................................................................................................. 17
3.1.1 South Africa‘s annual defense expenditure to reac h US$5.6 billion by 2015 ................................................ 17
3.1.2 Crime, peacekeeping missions, border security, military modernization initiatives and FIFA 2010 World
      Cup to drive defense expenditure ............................................................................................................ 18
3.2       Analysis of Defense Budget Allocation .......................................................................................... 20
3.2.1 Capit al expenditure share to dec rease over the next five years .................................................................. 20
3.2.2 Capit al expenditure for air force to be highest with fastest growth rate ........................................................ 21
3.2.3 Army and air force to share the majority of the defense budget .................................................................. 22
3.2.4 Capit al expenditure alloc ated for the army to grow moderately ................................................................... 23
3.2.5 Air force takes the majority of the capital expenditure budget ..................................................................... 24
3.2.6 Naval spend on new acquisitions expected to grow at a steady rate following a decline in recent years ........ 25
3.2.7 Defense intelligence capital expenditure to reach US$61 million by 2015 ................................................... 26
3.3       Homeland Security Market Size and Forecast ............................................................................... 27
3.3.1 Homeland security market expected to grow at 10% until 2015 .................................................................. 27
3.3.2 Rising threat of global terrorism could affect the country, though it remains low at present ........................... 27
3.4       Benchmarking with Key Global Markets......................................................................................... 30
3.4.1 South Africa will continue to be a relatively small player in the defense market ........................................... 30
3.4.2 South Africa ranked nineteenth among top arms importing count ries for 2005–09 ....................................... 33
3.4.3 South Africa ranked sixteenth among top arms exporting countries for 2005 –09 ......................................... 34
3.4.4 South Africa fac es minimal risk of terror attacks ........................................................................................ 35
3.5       Market Opportunities: Key Trends and Growth Stimulators ........................................................ 37
3.5.1 Demand for monitoring and security equipment to increase ....................................................................... 37
3.5.2 Greater demand for unmanned aerial vehicles .......................................................................................... 37
3.5.3 Increased demand for military transport fleet is expected........................................................................... 37
3.5.4 Demand for maritime patrol and surveillance equipment to increase .......................................................... 38
3.5.5 Government‘s plan to enhance landward capability to offer attractive opportunities ..................................... 39

The South African Defense Sector – Market Opportunities and Entry Strategies, Analyses and Forecasts to 2015
© ICD Research. This report is a licensed product and is not to be photocopied                                                                     Page 2
TABLE OF CONTENTS


3.5.6 Demand for survey vessels provides opportunities for investors ................................................................. 40
3.5.7 A viation security is one of the key focus areas in homeland security .......................................................... 40
4      Defense Procurement Market Dynamics .................................................................................... 41
4.1       Import Market Dynamics ................................................................................................................... 41
4.1.1 Defense imports value has declined considerably over the last two years ................................................... 41
4.1.2 Recently Sweden replaced Germany as the highest arms export er to South A frica ..................................... 42
4.1.3 Aircrafts, surveillance and patrolling ships constitute major import category ................................................ 44
4.2       Export Market Dynamics ................................................................................................................... 45
4.2.1 Defense export value has shown significant growth in the last five years .................................................... 45
4.2.2 US is the biggest importer of arms from Sout h Africa ................................................................................. 46
4.2.3 Armored vehicles constitute major export category ................................................................................... 48
5      Industry Dynamics ............................................................................................................................ 
								
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