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Future of the Thai Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

Description

Product Synopsis

This report is the result of SDI's extensive market and company research covering the Thai defense industry, and 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 Future of the Thai Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 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 Thai defense industry.

What is the current market landscape and what is changing?

Thai defense expenditure increased at a CAGR of 5.14% during the review period and valued US$6.1 billion in 2013. The focus of the Thai government will be on the modernization of its armed forces, the arms race with other Asian countries, and border security

What are the key drivers behind recent market changes?

Modernization of the armed forces, the arms race with other Asian countries, and border security to drive Thai defense spending.

What makes this report unique and essential to read?

The Future of the Thai Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, 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.

Key Features and Benefits

The report provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, including highlights of key growth stimulators, and 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 their implications and impact on the Thai 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 Thailand. 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

Even though Thailand has an offset policy in order to enhance its domestic defense capabilities, it accepts indirect offsets as an eligible activity. Furthermore, the nation allows counter-purchase, according to which foreign suppliers can buy non-defense related goods such as fruits and rice in exchange for defense equipment. Additionally, a lack of multipliers within Thailand's offset policy fails to encourage foreign OEMs to provide technology transfers or jointly develop defense equipment with the country. Consequently, foreign suppliers are not incentivized to invest into the Thai defense sector and, as a result, the domestic defense sector is unable to gain access to military related technology. With the country failing to attract investors into its defense sector, the Thai military industry is unable to be part of the global supply chain for multinational defense companies.

The Thai government fulfills most of its defense needs by importing military equipment from foreign countries such as Ukraine, Russia, Germany, France, and Spain. The overall exports of the country during the period 2008-2012 were negligible, resulting in poor inflow of foreign investment. During the forecast period, defense exports are expected to remain low as a result of less joint development and collaboration programs, and low levels of defense exports are expected to remain the key challenge for the Thai defense industry.

The Thai defense budget, which stands at US$6.1 billion for 2013, is lower than most of its neighbors - the Philippines is one of the few countries with a lower defense budget - and this relatively small defense budget size frequently deters investors from venturing into the country. Moreover, the Thai government has also made offsets mandatory for all defense procurements exceeding US$10.5 million. In an attempt to encourage domestic defense development, the Thai government awards additional significance to direct offsets; however, due to the lack of sufficient investment and a shortage of skilled Thai labor, foreign OEMs are unable to transfer sophisticated technology to domestic defense companies. The combination of the factors outlined above reduces the attractiveness of the Thai defense industry for foreign OEMs.

Key Highlights

Thailand hosts the Asian Defense and Security Exhibition, Conferencing and Networking event biennially. The event began in 2003 and provides a platform to manufacturers across the world to showcase their defense equipment. During 2012, the event attracted 250 individual exhibitors from 250 countries such as Germany, the US, Czech Republic, France, Korea, Israel, Singapore, Belarus, Russia, Poland, and Thailand. With the country embarking on a defense modernization plan, foreign OEMs have an opportunity to enter the fast-growing Thai defense market. The Thai government finalized deals catering to force restructuring, military education, package procurement, and research and development during the defense exhibition in March 2012, providing foreign OEMs with a good opportunity to enter the Thai defense market.

During 2008-2012, Aircraft dominated Thailand's defense imports with a share of 436.6% of total imports. Armored vehicles, missiles, and ships are other major segments in which the country imported defense equipment during this period, accounting for 19.1%, 15.2%, and 11.5% respectively. Over the period 2013-2017, the country is expected to import helicopters, armored vehicles, and frigates to counter southern insurgency and strengthen its navy.

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 Defence Intelligence

2 Executive Summary

3 Market Attractiveness and Emerging Opportunities

  • 3.1. Defense Market Size Historical and Forecast
    • 3.1.1. The Thai defense budget expected to grow at a CAGR of 7.22% over the forecast period
    • 3.1.2. Modernization of the armed forces, arms race with other Asian countries and border security to drive Thai defense spending
    • 3.1.3. Defense expenditure as a percentage of GDP is expected to reach 1.49% by 2018
  • 3.2. Analysis of Defense Budget Allocation
    • 3.2.1. Capital expenditure allocation is expected to increase over the forecast period
    • 3.2.2. Expenditure on Army to account half of the total defense budget
    • 3.2.3. Air force expenditure to grow at a CAGR of 7.35% over the forecast period
    • 3.2.4. Naval expenditure is expected to reach US$1.8 billion by 2018
    • 3.2.5. Thailand to spend US$4.3 billion on support services during the forecast period
  • 3.3. Homeland Security Market Size and Forecast
    • 3.3.1. Thai homeland security spending expected to grow at a CAGR of 2.08% over the forecast period
    • 3.3.2. Counter terrorism and maritime security to drive Thai Homeland security expenditure
    • 3.3.3. Thailand faces a high level of threat from foreign terrorist organizations
    • 3.3.4. Thailand has a terrorism index score of "2.3"
  • 3.4. Benchmarking with Key Global Markets
    • 3.4.1. Thai defense expenditure expected to increase over the forecast period
    • 3.4.2. Thai defense expenditure is relatively smaller than other Asian countries
    • 3.4.3. Thailand defense budget as a percentage of GDP is expected to decline over the forecast period
    • 3.4.4. Iraq, Pakistan, and Afghanistan are the most terror-prone countries
  • 3.5. Market Opportunities: Key Trends and Growth Stimulators
    • 3.5.1. Border Security
    • 3.5.2. Main Battle Tank (MBT)
    • 3.5.3. Multi mission and Rescue Helicopters
    • 3.5.4. Transport Helicopters
    • 3.5.5. Anti-ship Missiles
    • 3.5.6. Fighters and Multi-Role Aircraft
    • 3.5.7. Frigates

4 Defense Procurement Market Dynamics

  • 4.1. Import Market Dynamics
    • 4.1.1. Thailand's defense imports are expected to increase over the forecast period
    • 4.1.2. Sweden and Ukraine to remain the key arms suppliers to Thailand
    • 4.1.3. Helicopters and armored vehicles are expected to be the key imports for Thailand
  • 4.2. Export Market Dynamics
    • 4.2.1. No defense exports for Thailand

5 Industry Dynamics

  • 5.1. Five Forces Analysis
    • 5.1.1. Bargaining power of supplier: low
    • 5.1.2. Bargaining power of buyer: high
    • 5.1.3. Barrier to entry: low to medium
    • 5.1.4. Intensity of rivalry: high
    • 5.1.5. Threat of substitution: high

6 Market Entry Strategy

  • 6.1. Market Regulation
    • 6.1.1. Thai defense industry is largely driven by the government's offset policy
    • 6.1.2. The Thai defense sector is partially regulated
  • 6.2. Market Entry Route
    • 6.2.1. Defense exhibitions can be used as a direct entry route to the Thai defense industry
    • 6.2.2. Foreign Military Sales (FMS) to Thailand
    • 6.2.3. Foreign defense organizations venture into the market by partnering with a domestic defense firm
  • 6.3. Key Challenges
    • 6.3.1. Negligible defense exports pose a challenge for domestic defense companies
    • 6.3.2. Limited defense budget discourages investors from market entry
    • 6.3.3. Corruption and lack of transparency impede the growth of Thailand's defense industry
    • 6.3.4. Presence of indirect offset hampers the growth of the domestic defense sector

7 Competitive Landscape and Strategic Insights

  • 7.1. Competitive Landscape Overview
  • 7.2. Key Private Sector Companies
    • 7.2.1. Avia Saab Technologies Co. Ltd.: overview
    • 7.2.2. Avia Saab Technologies Co. Ltd.: Products and services
    • 7.2.3. Avia Saab Technologies Co. Ltd.: recent announcements and strategic initiatives
    • 7.2.4. Avia Saab Technologies Co. Ltd.: recent contract wins
    • 7.2.5. Avia Satcom: overview
    • 7.2.6. Avia Satcom: products and services
    • 7.2.7. Avia Satcom: Alliances
    • 7.2.8. Avia Satcom: recent contract wins
    • 7.2.9. Infowave (Thailand) Co., Ltd.: Overview
    • 7.2.10. Infowave (Thailand) Co., Ltd.: Products and services
    • 7.2.11. Infowave (Thailand) Co., Ltd.: Alliances

8 Business Environment and Country Risk

  • 8.1. Demographics
    • 8.1.1. Total Rural population
    • 8.1.2. Total urban population
    • 8.1.3. Number of households
  • 8.2. Economic Performance
    • 8.2.1. GDP per capita at constant prices
    • 8.2.2. GDP at current prices (US$)
    • 8.2.3. Exports of goods and services (current US$ bn)
    • 8.2.4. Imports of goods and services (current US$ bn)
    • 8.2.5. Gross national disposable income (US$ Bn)
    • 8.2.6. Manufacturing Output (US$ Bn)
    • 8.2.7. Consumer price index
    • 8.2.8. Wholesale price index
    • 8.2.9. LCU per US$ (period average)
    • 8.2.10. LCU per Euro (period average)
    • 8.2.11. Lending rate (%)
    • 8.2.12. Deposit rate (%)
    • 8.2.13. Real Interest rate (%)
    • 8.2.14. Market capitalization of listed companies (US$ bn)
    • 8.2.15. Market capitalization of listed companies (% of GDP)
    • 8.2.16. Total Government cash surplus/deficit (LCU billion)
    • 8.2.17. Government cash surplus/deficit as a percentage of GDP (LCU)
    • 8.2.18. Central government debt (LCU billion)
    • 8.2.19. Central government debt as a percentage of GDP (LCU)
    • 8.2.20. Goods exports as a percentage of GDP
    • 8.2.21. Goods imports as a percentage of GDP
    • 8.2.22. Goods balance as a percentage of GDP
    • 8.2.23. Services imports as a percentage of GDP
    • 8.2.24. Service exports as a percentage of GDP
    • 8.2.25. Services balance as a percentage of GDP
    • 8.2.26. Foreign direct investment, net (BoP, current US$ billions)
    • 8.2.27. Net foreign direct investment as a percentage of GDP
    • 8.2.28. International reserves, including gold (US$ billions)
    • 8.2.29. External Debt as a percentage of GDP
  • 8.3. Energy and utilities
    • 8.3.1. Total Conventional Thermal Electricity Net Generation (Billion kWh)
    • 8.3.2. Hydroelectricity Net Generation (Billion kWh)
    • 8.3.3. Nuclear Electricity Net Generation (Billion kWh)
    • 8.3.4. Total Conventional Thermal Electricity Installed Capacity (Million kW)
    • 8.3.5. Total Electricity Exports (Million kW)
    • 8.3.6. Total Electricity Imports (Million kW)
    • 8.3.7. Proved Reserves of Natural Gas (Trillion Cubic Feet)
    • 8.3.8. Total Petroleum Consumption (Thousand Barrels Per Day)
    • 8.3.9. Crude Oil Proved Reserves (Billion Barrels)
    • 8.3.10. Total Non-Hydro Renewable Electricity Net Generation (Billion kW)
  • 8.4. Infrastructure Quality and Availability
    • 8.4.1. Air transport, freight (million ton-km)
    • 8.4.2. Overall construction (US$ million)
  • 8.5. Mineral
    • 8.5.1. Mining, Manufacturing, Utilities Output (USD Bn)
  • 8.6. Technology
    • 8.6.1. Patents Granted
  • 8.7. Telecommunication
    • 8.7.1. Telephone lines (in Millions)
    • 8.7.2. Telephone lines Penetration Rate (per 100 people)

9 Appendix

  • 9.1. About SDI
  • 9.2. Disclaimer

List of Tables

  • Table 1: Thai Defense Expenditure (US$ Billion), 2009-2013
  • Table 2: Thai Defense Expenditure (US$ Billion), 2014-2018
  • Table 3: Thai GDP Growth vs. Defense Expenditure Growth vs. Defense Expenditure as Percentage of GDP, 2009-2013
  • Table 4: Thai GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2014-2018
  • Table 5: Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2009-2013
  • Table 6: Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2018
  • Table 7: Thai Defense Expenditure for Army (US$ billion), 2009-2013
  • Table 8: Thai Defense Expenditure for Army (US$ billion), 2014-2018
  • Table 9: Thai Defense Expenditure for Air Force (US$ billion), 2009-2013
  • Table 10: Thai Defense Expenditure for Air Force (US$ billion), 2014-2018
  • Table 11: Thai Defense Expenditure for Navy (US$ billion), 2009-2013
  • Table 12: Thai Defense Expenditure for Navy (US$ billion),2014-2018
  • Table 13: Thai Homeland Security Expenditure (US$ billion), 2009-2013
  • Table 14: Thai Homeland Security Expenditure (US$ billion), 2014-2018
  • Table 15: Benchmarking with Key Markets - 2008-2012 vs. 2013-2017
  • Table 16: SDI Terrorism Index
  • Table 17: Thai Defense Offset Regulations
  • Table 18: FMS deals to Thailand
  • Table 19: Avia Saab Technologies Co. Ltd. - Product Focus
  • Table 20: Avia Saab Technologies Co. Ltd. - Recent Contract Wins
  • Table 21: Avia Satcom - Product Focus
  • Table 22: Avia Satcom - Alliances
  • Table 23: Avia Satcom - Recent Contract Wins
  • Table 24: Infowave (Thailand) Co., Ltd. - Product Focus
  • Table 25: Infowave (Thailand) Co., Ltd. - Alliances

List of Figures

  • Figure 1: Thai Defense Expenditure (US$ Billion), 2009-2013
  • Figure 2: Thai Defense Expenditure (US$ Billion), 2014-2018
  • Figure 3: Thai GDP Growth vs. Defense Expenditure Growth vs. Defense Expenditure as Percentage of GDP, 2009-2013
  • Figure 4: Thai GDP Growth vs. Defense Expenditure Growth and Defense Expenditures Percentage of GDP, 2014-2018
  • Figure 5:Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2009-2013
  • Figure 6: Thai Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2018
  • Figure 7: Thai Defense Expenditure for Army (US$ billion), 2009-2013
  • Figure 8: Thai Defense Expenditure for Army (US$ billion), 2014-2018
  • Figure 9: Thai Defense Expenditure for Air Force (US$ billion), 2009-2013
  • Figure 10: Thai Defense Expenditure for Air Force(US$ billion), 2014-2018
  • Figure 11: Thai Defense Expenditure for Navy (US$ billion), 2009-2013
  • Figure 12: Thai Defense Expenditure for Navy (US$ billion), 2014-2018
  • Figure 13: Thai Homeland Security Expenditure (US$ billion), 2009-2013
  • Figure 14: Thai Homeland Security Expenditure (US$ billion), 2014-2018
  • Figure 15: SDI Terrorism Heat Map, 2011
  • Figure 16: SDI Terrorism Index, 2011
  • Figure 17: Benchmarking with Key Markets - 2008-2012 vs. 2013-2017
  • Figure 18: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2012 and 2017
  • Figure 19: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2012
  • Figure 20: Thai Border Security Market Size (US$ Million), 2013-2023
  • Figure 21: Thai Main Battle Tank Market Size (US$ Million), 2013-2023
  • Figure 22: Multi mission and Rescue Helicopters Market Size (US$ Million), 2013-2023
  • Figure 23: Transport Helicopters Market Size (US$ Million), 2013-2023
  • Figure 24: Thai Anti-ship Missiles Market Size (US$ Million), 2013-2023
  • Figure 25: Fighters and Multi-Role Aircraft Market Size (US$ Million), 2013-2023
  • Figure 26: Frigates Market Size (US$ Million), 2013-2023
  • Figure 27: Thailand's Defense Import Trend, 2008-2012 (TIV values)
  • Figure 28: Thailand's Defense Import by Country (%), 2008-2012 (TIV values)
  • Figure 29: Thailand Defense Imports by Category (%), 2008-2012
  • Figure 30: Industry Dynamics - Porter's Five Forces Analysis
  • Figure 31: Thailand Rural population (In million), 2008-2017
  • Figure 32: Thailand Urban population (In million), 2008-2017
  • Figure 33: Thailand - Number of Households (Million), 2008-2017
  • Figure 34: Thailand's GDP Per Capita at Constant Prices (US$), 2008-2017
  • Figure 35: Thailand - GDP at Current Prices (US$ Billion), 2008-2017
  • Figure 36: Thailand's Exports of goods and services (US$), 2002-2011
  • Figure 37: Thailand's Imports of goods and services (US$), 2002-2011
  • Figure 38: Thailand's Gross national disposable income (US$ billion), 2002-2011
  • Figure 39: Thailand's Gross national disposable income (US$ billion), 2002-2011
  • Figure 40: Thailand's Consumer price index, 2008-2017
  • Figure 41: Thailand's Wholesale price index, 2002-2011
  • Figure 42: Thailand LCU per US$, 2008-2017
  • Figure 43: Thailand LCU per US$, 2008-2017
  • Figure 44: Thailand's Lending rate (%), 2002-2011
  • Figure 45: Thailand's Deposit rate (%), 2001-2010
  • Figure 46: Thailand's Real Interest rate (%), 2002-2011
  • Figure 47: Thailand's market capitalization of listed companies (US$ billion), 2002-2011
  • Figure 48: Thailand's market capitalization of listed companies (% of GDP), 2002-2011
  • Figure 49: Thailand's Total Government cash surplus/deficit (LCU billion), 2003-2010
  • Figure 50: Thailand's Government cash surplus/deficit as % of GDP (LCU), 2003-2010
  • Figure 51: Thailand's - Central government debt (LCU billion), 2003-2010
  • Figure 52: Thailand's Central government debt as % of GDP (LCU), 2003-2010
  • Figure 53: Thailand - Goods exports as a % of GDP (%), 2001-2010
  • Figure 54: Thailand - Goods imports as a % of GDP (%), 2001-2010
  • Figure 55: Thailand's Goods balance as a % of GDP (%), 2001-2010
  • Figure 56: Thailand's Services imports as a % of GDP (%), 2001-2010
  • Figure 57: Thailand Service exports as a % of GDP (%), 2001-2010
  • Figure 58: Thailand - Services balance as a % of GDP (%), 2001-2010
  • Figure 59: Thailand - Foreign direct investment, net (BoP, current US$ billion), 2001-2010
  • Figure 60: Thailand's Net foreign direct investment as % of GDP, 2001-2010
  • Figure 61: Thailand's International reserves, including gold (US$ billion), 2002-2011
  • Figure 62: Thailand's International reserves, including gold (US$ billion), 2001-2010
  • Figure 63: Thailand - Total Conventional Thermal Electricity Net Generation (Billion Kilowatt hours), 2001-2010
  • Figure 64: Thailand's Hydroelectricity Net Generation (Billion Kilowatt hours), 2001-2010
  • Figure 65: Thailand's Nuclear Electricity Net Generation (Billion Kilowatt hours), 2001-2010
  • Figure 66: Thailand's Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts), 2001-2010
  • Figure 67: Thailand's Total Electricity Exports (Million Kilowatts), 2001-2010
  • Figure 68: Thailand's Total Electricity Imports (Million Kilowatts), 2001-2010
  • Figure 69: Thailand's Proved Reserves of Natural Gas (Trillion Cubic Feet), 2002-2011
  • Figure 70: Thailand's Total Petroleum Consumption (Thousand Barrels Per Day), 2002-2011
  • Figure 71: Crude Oil Proved Reserves (Billion Barrels), 2002-2011
  • Figure 72: Total Non-Hydro Renewable Electricity Net Generation (Billion Kilowatts), 2001-2010
  • Figure 73: Thailand's Air transport, freight (million ton-km), 2001-2010
  • Figure 74: Thailand - Overall construction (US$ million), 2007-2016
  • Figure 75: Thailand's Mining, Manufacturing, Utilities Output (USD Bn), 2002-2011
  • Figure 76: Thailand's Patents Granted, 2002-2011
  • Figure 77: Thailand's Telephone lines, 2001-2010
  • Figure 78: Thailand's Telephone lines Penetration Rate (per 100 people), 2001-2010
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