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Market Research Report

Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

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Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Published: November 26, 2018 Content info: 90 Pages
Description

"Future of the Peruvian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023", published by GlobalData, 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.

This report offers detailed analysis of the Peruvian 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 Peruvian defense industry market size and drivers: detailed analysis of the Peruvian 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
  • Porter's Five Force analysis of the Peruvian defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry
  • Import and Export Dynamics: analysis of prevalent trends in the country's imports and exports over the last five years
  • Market opportunities: details of the top five defense investment opportunities over the next 10 years
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Peruvian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Scope

  • Peru's defense budget values US$2.3 billion in 2018 and registered a CAGR of -1.24% during the historic period. The persistent threat from insurgent guerrilla organization 'the Shining Path group', border conflicts with Chile, active participation in peacekeeping missions, narco-terrorism, defense sector reforms, and modernization initiatives drove defense expenditure over the historic period.
  • Peru's domestic defense industry is still undeveloped; therefore, the country did not export any arms during the historic period. However, the Ministry of Defense (MoD) has recently announced that it wants to strengthen its arms manufacturing capacity, starting with the production of naval units in its three hubs at Callao, Chimbote, and Iquitos.

Reasons to buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Peruvian 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 Peruvian defense industry covering sections including demand drivers, Porter's Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.
Table of Contents
Product Code: GDDF0536MR

Table of Contents

1. Introduction 7

  • 1.1. What is this Report About? 7
  • 1.2. Definitions 7
  • 1.3. Summary Methodology 9
  • 1.4. About GlobalData 10

2. Executive Summary 11

3. Market Attractiveness and Emerging Opportunities 13

  • 3.1. Current Market Scenario 14
    • 3.1.1. Primary Threat Perception 14
    • 3.1.2. Military Doctrine and Strategy 15
    • 3.1.3. Military Fleet Size 16
    • 3.1.4. Procurement Programs 20
    • 3.1.5. Social, Political and Economic Environment and Support for Defense Projects 21
    • 3.1.6. Political and Strategic Alliances 22
  • 3.2. Defense Market Size Historical and Forecast 23
    • 3.2.1. Defense expenditure to grow at a CAGR of 2.12% over the forecast period 23
    • 3.2.2. Threat of narco-terrorism, defense reforms and modernization, border disputes, and peacekeeping operations to drive defense expenditure 25
    • 3.2.3. Defense budget as a percentage of GDP is anticipated to average 0.9% during the forecast period 27
  • 3.3. Analysis of Defense Budget Allocation 29
    • 3.3.1. Revenue expenditure accounts for the majority of the Peruvian defense budget 29
    • 3.3.2. Peruvian defense capital expenditure is expected to grow at a CAGR of 3.48% during the forecast period 31
    • 3.3.3. Per capita defense expenditure expected to increase during the forecast period 34
  • 3.4. Homeland Security Market Size and Forecast 36
    • 3.4.1. Homeland security expenditure is expected to grow at a CAGR of 5.32% during the forecast period 36
    • 3.4.2. Measures to prevent cocaine trafficking and organized crime to drive HLS expenditure 39
    • 3.4.3. Peru considered at 'moderate risk' of a terrorist attack 41
    • 3.4.4. Peru experiences moderate levels of terrorist activity 42
    • 3.4.5. Peru has a terrorism index score of 2.5 44
  • 3.5. Benchmarking with Key Global Markets 45
    • 3.5.1. Peruvian defense budget expected to register marginal growth over the forecast period 45
    • 3.5.2. Peru's military expenditure is limited compared to countries with the largest defense expenditure 47
    • 3.5.3. Peru allocates a low percentage of GDP to defense 48
  • 3.6. Market Opportunities: Key Trends and Growth Stimulators 49
    • 3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023 49
    • 3.6.2. Transport Aircraft 50
    • 3.6.3. Frigates 51
    • 3.6.4. Multi-role Aircraft 52

4. Defense Procurement Market Dynamics 53

  • 4.1. Import Market Dynamics 55
    • 4.1.1. Defense imports expected to increase during the forecast period 55
    • 4.1.2. South Korea to account for the majority of Peru's defense imports during the forecast period 56
    • 4.1.3. Aircraft and Naval Vessels are the most imported military hardware 58

5. Industry Dynamics 59

  • 5.1. Five Forces Analysis 59
    • 5.1.1. Bargaining Power of Supplier: Low to Medium 60
    • 5.1.2. Bargaining Power of Buyer: Medium to High 60
    • 5.1.3. Barriers to Entry: Medium 60
    • 5.1.4. Intensity of Rivalry: Medium to High 60
    • 5.1.5. Threat of Substitution: Medium to High 60

6. Market Entry Strategy 61

  • 6.1. Market Regulation 61
    • 6.1.1. Budgeting process 61
    • 6.1.2. Procurement Policy and Process 61
    • 6.1.3. Offset policy aids development of domestic defense industry 62
    • 6.1.4. Peru allows 100% FDI in the defense industry 62
  • 6.2. Market Entry Route 63
    • 6.2.1. The country's biennial defense exhibition provides an attractive entry route 63
    • 6.2.2. Direct selling is the preferred market entry route for foreign OEMs 64
  • 6.3. Key Challenges 65
    • 6.3.1. Small defense budget and limited technological capability limits the market entry of foreign companies 65
    • 6.3.2. Lack of transparency hampers the growth of the Peruvian defense industry 65

7. Competitive Landscape and Strategic Insights 66

  • 7.1. Competitive Landscape Overview 66
  • 7.2. Key Domestic Companies 68
    • 7.2.1. Los Servicios Industriales de la Marina (SIMA): Overview 68
    • 7.2.2. Los Servicios Industriales de la Marina (SIMA): Products and Services 68
    • 7.2.3. Los Servicios Industriales de la Marina (SIMA): Recent Announcements and Strategic Initiatives 69
    • 7.2.4. Los Servicios Industriales de la Marina (SIMA): Alliances 69
    • 7.2.5. Los Servicios Industriales de la Marina (SIMA): Recent Contract Wins 69
    • 7.2.6. The Army Ammunition Factory (FAME): Overview 70
    • 7.2.7. The Army Ammunition Factory (FAME): Products and Services 70
    • 7.2.8. The Army Ammunition Factory (FAME): Recent Announcements and Strategic Initiatives 71
    • 7.2.9. Desarrollos Industriales Casanave: Overview 72
    • 7.2.10. Desarrollos Industriales Casanave: Products and Services 72
    • 7.2.11. Desarrollos Industriales Casanave: Recent Announcements and Strategic Initiatives 73
    • 7.2.12. Desarrollos Industriales Casanave: Alliances 73

8. Business Environment and Country Risk 74

  • 8.1. Economic Performance 74
    • 8.1.1. GDP Per Capita (US$) 74
    • 8.1.2. GDP, Current Prices (US$ Billion) 75
    • 8.1.3. Exports of Goods and Services, Current Prices (LCU billion) 76
    • 8.1.4. Imports of Goods and Services, Current Prices (LCU billion) 77
    • 8.1.5. Gross National Disposable Income (US$ billion) 78
    • 8.1.6. Local Currency Unit per US$ (Period Average) 79
    • 8.1.7. Market Capitalization of Listed Companies (US$ Billion) 80
    • 8.1.8. Market Capitalization of Listed Companies (% of GDP) 81
    • 8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP (LCU) 82
    • 8.1.10. Goods Exports as a Percentage of GDP 83
    • 8.1.11. Goods Imports as a Percentage of GDP 84
    • 8.1.12. Services Imports as a Percentage of GDP 85
    • 8.1.13. Services Exports as a Percentage of GDP 86
    • 8.1.14. Foreign Direct Investment, net (BoP, current US$ Billion) 87
    • 8.1.15. Net Foreign Direct Investment as a Percentage of GDP 88
    • 8.1.16. Mining, Manufacturing, Utilities Output LCU Billion 89

9. Appendix 90

  • 9.1. About GlobalData 90
  • 9.2. Disclaimer 90
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List of Tables

  • Table 1: Peruvian Ground Forces Strength 16
  • Table 2: Peruvian Navy Strength 18
  • Table 3: Peruvian Air Force Strength 19
  • Table 4: Peruvian - Ongoing Development and Procurement Programs (US$ Million), 2014-2018 20
  • Table 5: Peruvian - Future Procurement Programs 20
  • Table 6: Peruvian Defense Expenditure (PEN Billion & US$ Billion), 2014-2023 23
  • Table 7: Peruvian GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023 27
  • Table 8: Peruvian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 29
  • Table 9: Peruvian Defense Capital Expenditure (PEN Billion & US$ Million), 2014-2023 32
  • Table 10: Peruvian Per Capita Defense Expenditure (US$), 2014-2023 34
  • Table 11: Peruvian Homeland Security Expenditure (PEN Billion & US$ billion), 2014-2023 37
  • Table 12: Terrorism Index, 2018 42
  • Table 13: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 45
  • Table 14: Top Peru Defense Sectors by Value (US$ Million), 2018-2023 49
  • Table 15: Peru Budget Formation Timetable 61
  • Table 16: Defense Offset Regulations in Peru 62
  • Table 17: Top Defense Suppliers in The Peruvian Defense Industry - By Value (US$ Million) 2018-2023 66
  • Table 18: Competitive Landscape of the Peruvian Defense Industry 67
  • Table 19: Los Servicios Industriales de la Marina (SIMA) - Products and Services 68
  • Table 20: Los Servicios Industriales de la Marina (SIMA) - Alliances 69
  • Table 21: Los Servicios Industriales de la Marina (SIMA) - Recent Contract Wins 69
  • Table 22: The Army Ammunition Factory (FAME) - Product Focus 70
  • Table 23: Desarrollos Industriales Casanave - Product Focus 72
  • Table 24: Desarrollos Industriales Casanave - Alliances 73

List of Figures

  • Figure 1: Peruvian Defense Expenditure (PEN Billion), 2014-2023 24
  • Figure 2: Peruvian Defense Expenditure (US$ Billion), 2014-2023 24
  • Figure 3: Peruvian GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023 28
  • Figure 4: Peruvian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 30
  • Figure 5: Peruvian Capital Budget Allocation (PEN Million), 2014-2023 33
  • Figure 6: Peruvian Capital Budget Allocation (US$ Million), 2014-2023 33
  • Figure 7: Peruvian Per Capita Defense Expenditure (US$), 2014-2023 35
  • Figure 8: Peruvian Homeland Security Budget (PEN Billion), 2014-2023 38
  • Figure 9: Peruvian Homeland Security Budget (US$ Billion), 2014-2023 38
  • Figure 10: Terrorism Heat Map, 2018 41
  • Figure 11: Terrorism Index, 2018 44
  • Figure 12: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 46
  • Figure 13: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2018 and 2023 47
  • Figure 14: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018 48
  • Figure 15: Transport Aircraft Market Size (US$ Million), 2018-2023 50
  • Figure 16: Frigates Market Size (US$ Million), 2018-2023 51
  • Figure 17: Multi-role Aircraft Market Size (US$ Million), 2018-2023 52
  • Figure 18: Top Peruvian Defense Procurements in Terms of Their Supplier Relationships 54
  • Figure 19: Peruvian Defense Import Trend, 2013-2017 (TIV values) 55
  • Figure 20: Peruvian Defense Imports by Country (%), 2013-2017 57
  • Figure 21: Peruvian Defense Imports by Category (%), 2013-2017 58
  • Figure 22: Industry Dynamics - Porter's Five Forces Analysis 59
  • Figure 23: Peruvian GDP Per Capita (US$), 2015-2025 74
  • Figure 24: Peruvian GDP at Current Prices (US$ Billion), 2015-2025 75
  • Figure 25: Peruvian Exports of Goods and Services, Current Prices (LCU Billion), 2005-2014 76
  • Figure 26: Peruvian Imports of Goods and Services, Current Prices (LCU Billion), 2005-2014 77
  • Figure 27: Peruvian Gross National Disposable Income (US$ billion) 2007-2014 78
  • Figure 28: Local Currency Unit per US$, 2015-2024 79
  • Figure 29: Market Capitalization of Listed Companies in Peru (US$ Billion), 2005-2012 80
  • Figure 30: Market Capitalization of Listed Companies in Peru (% of GDP), 2005-2012 81
  • Figure 31: Peruvian Government Cash Surplus/ Deficit as a % of GDP (LCU), 2005-2012 82
  • Figure 32: Peruvian Goods Exports as a % of GDP, 2005-2013 83
  • Figure 33: Peruvian Goods Imports as a % of GDP, 2005-2013 84
  • Figure 34: Peruvian Services Imports as a % of GDP, 2005-2013 85
  • Figure 35: Peruvian Services Exports as a % of GDP, 2005-2013 86
  • Figure 36: Peruvian Foreign Direct Investment, net (BoP, current US$ Billion), 2005-2013 87
  • Figure 37: Peruvian Net Foreign Direct Investment as a % of GDP, 2005-2013 88
  • Figure 38: Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014 89
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