This publication has been discontinued on October 24, 2012.
This report is the result of SDI/ICD Research's extensive market and company research covering the Finnish defense industry. It provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news.
Introduction and Landscape
Why was the report written?
The Finnish Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain a market share in the Finnish defense industry.
What is the current market landscape and what is changing?
The Finnish defense budget stood at US$3.93 billion in 2011 and recorded a CAGR of 6.44% during 2007-2011. Finnish defense expenditure is expected to decline at a CAGR of -1.53% during the forecast period as a result of the Euro zone crisis and the consequent Economy Management Plan by government. The high ratio of debt to GDP will lead to a decline in capital expenditure along with redundancies of defense personnel to control revenue expenses.
What are the key drivers behind recent market changes?
Finland's defense expenditure is primarily driven by military threat from Russia on the eastern border, the procurement of advanced air defense systems, and participation in international peacekeeping missions.
What makes this report unique and essential to read?
The Finnish Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016 provides detailed analysis of the current industry size and growth expectations from 2011 to 2016, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas.
Key Features and Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2011 to 2016, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
The report includes trend analysis of imports and exports, together with its implications and impact on the Finnish defense industry.
The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
The report helps the reader to understand the competitive landscape of the defense industry in Finland. 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.
Key Market Issues
Finland has been perceived as a country with low levels of corruption. However, since 2006, three alleged instances of bribery and corruption involving the country's defense sector have been highlighted. As a result, the country's ranking in the Transparency International Corruption Perceptions Index has been dropping since 2007. Domestic defense industry officials are accused of handing out bribes to foreign public officials in order to win a contract for the supply of 126 armored personnel carriers to Croatia.
The Finnish defense budget deficit in 2011 stood at US$10.6 billion, due to which the country may be compelled to reduce its defense budget in the next ten years. Currently, the Ministry of Defense is contemplating reductions of US$300 million in its defense budget for 2012-13, which may eventually lead to the cancellation of defense-related projects and air defense modernization projects. A potential cut to Finland's defense budget is an area of concern for foreign investors.
Finnish imports more than doubled from US$43 million to US$97 million during 2009-2011. Poland retained its position as the largest consumer of Finnish defense goods, and ships and armored vehicles constituted the majority of exports. In terms of imports, Finland focused on aircraft and tactical missiles during 2011 and is improving its air defense systems through large imports of anti-aircraft missiles and advanced radars, amounting to US$25 million in 2012.
The Finnish homeland security expenditure is anticipated to register a CAGR of 2.11% during the forecast period to reach an estimated US$1.93 billion by 2016. On a cumulative basis, Finland is expected to spend US$9.21 billion on its homeland security during the period 2012-2016. The nation's homeland security budget is focused on policing the increasing criminal activities in the nation, including the illicit drug trade and human trafficking across its eastern border with Russia.
In order to enhance domestic defense capabilities, the government encourages foreign investors to enter the Finnish defense industry by partnering with domestic defense firms. Defense firms such as United Shipbuilding Corp. of Russia and Saab of Sweden have entered the Finnish defense sector through this route. Additionally, domestic defense firms collaborate with foreign defense firms for military-related research and development (R&D) projects.
Table of Contents
Table of Contents
1.1 What is this Report About?
1.3 Summary Methodology
1.4 SDI Terrorism Index
1.5 About Strategic Defence Intelligence (www.strategicdefenceintelligence.com)
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1 Defense Market Size Historical and Forecast
3.1.1 Finnish defense budget to decline at a CAGR of XX% during the forecast period
3.1.2 Modernization initiatives, international peacekeeping missions and a perceived security threat from Russia will driving forces of Finnish defense expenditure
3.1.3 Defense expenditure as a percentage of GDP to reach XX% by 2016
3.2 Analysis of Defense Budget Allocation
3.2.1 Capital expenditure allocation expected to decrease during the forecast period
3.2.2 Share of Defense expenditure in GDP would reduce to XX% in 2016
3.2.3 Finnish Defense expenditure to decline with weak growth of Finnish economy in 2012-2016
3.3 Homeland Security Market Size and Forecast
3.3.1 Homeland security market to register a growth with CAGR of XX% during 2012-2016
3.3.2 Homeland security spending is expected to increase
3.3.3 Finland considered a low risk country for terror activities
3.3.4 Interesting trends in budget allocation of Ministry of Interior (MoI)
3.4 Benchmarking with Key Global Markets
3.4.1 Finnish defense budget to decrease at a low CAGR of XX% during 2012-2016
3.4.2 Finnish defense expenditure is the small compared to leading spenders
3.4.3 Finland behind on NATO specifications in defense spending
3.4.4 Finland ranked twenty-second among top global arms exporters during 2007-2011
3.5 Market Opportunities: Key Trends and Growth Stimulators
3.5.1 Increasing offensive strength through higher imports of advanced missile systems
3.5.2 Air Force modernization with special focus on securing Finnish airspace
3.5.3 Finland to develop offensive strength of Cyber Defense Unit (CDU)
3.5.4 Defense communication system will witness a surge in demand.
4 Defense Procurement Market Dynamics
4.1 Import Market Dynamics
4.1.1 Defense imports expected to increase during the forecast period
4.1.2 Sweden is the major supplier to Finland
4.1.3 Aircraft and missiles constitute the majority of Finnish arms imports
4.2 Export Market Dynamics
4.2.1 Finnish exports recovering from fall in 2009
4.2.2 EU countries account for a majority of Finnish defense exports
4.2.3 Armored vehicles are the largest exported defense hardware
5 Industry Dynamics
5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low to high
5.1.2 Bargaining power of buyer: high
5.1.3 Barrier to entry: medium
5.1.4 Intensity of rivalry: low to high
5.1.5 Threat of substitution: low to high
6 Market Entry Strategy
6.1 Market Regulation
6.1.1 Government encourages offsets in order to order to develop domestic defense industrial base
6.1.2 Finnish defense sector is open to foreign direct investments