Table of Contents
1 Introduction 10
1.1 What is this Report About? 10
1.2 Definitions 10
1.3 Summary Methodology 12
1.4 About Strategic Defence Intelligence 13
2 Executive Summary 14
3 Market Attractiveness and Emerging Opportunities 18
3.1 Current Market Scenario 19
3.1.1 Primary Threat Perception 19
3.1.2 Military Doctrine & Strategy 20
3.1.3 Military Fleet Size 40
3.1.4 Procurement Programs 46
3.1.5 Top Procurement Programs by Value (US$ Million) 2018-2023 52
3.1.6 Social, Political and Economic Environment and Support for Defense Projects 53
3.1.7 Political and Strategic Alliances 54
3.2 Defense Market Size Historical and Forecast 56
3.2.1 Russia’s defense budget to grow at a CAGR of 5.86% to value US$68.9 billion by 2023 56
3.2.2 Military modernization and defense exports to drive defense expenditure over the forecast period 59
3.2.3 Defense expenditure as a percentage of GDP is expected to average 3.56% over the forecast period 62
3.3 Analysis of Defense Budget Allocation 64
3.3.1 The majority of Russia’s defense budget is allocated to revenue expenditure 64
3.3.2 Capital expenditure is expected to record a CAGR of 6.21% during the forecast period 66
3.3.3 Per capita defense expenditure expected to increase over the forecast period 69
3.4 Homeland Security Market Size and Forecast 70
3.4.1 Russian homeland security expenditure forecast to reach US$43.4 billion by 2023 70
3.4.2 Border security and the fight against cyber-attacks are the main factors encouraging growth in the homeland security market 72
3.4.3 The Terrorism Heat Map considers Russia a “highly affected” region 74
3.4.4 Russia faces a “high risk” from acts of terrorism 75
3.4.5 Russia faces a significant threat from terrorists 77
3.5 Benchmarking with Key Global Markets 78
3.5.1 Russia’s defense budget is expected to grow significantly during the forecast period 78
3.5.2 Russia is the world’s third largest defense spender 80
3.5.3 Russia allocated 3.4% of its GDP to defense in 2018 81
3.6 Market Opportunities: Key Trends and Growth Stimulators 82
3.6.1 Top Defense Market Sectors by Value (US$ Million) - Projections over 2018-2023 82
3.6.2 Land Based C4ISR 83
3.6.3 Critical Infrastructure Protection (CIP) - Physical Security 85
3.6.4 Airborne C4ISR 87
4 Defense Procurement Market Dynamics 88
4.1 Import Market Dynamics 89
4.1.1 The country’s defense imports are low owing to a developed indigenous sector 89
4.1.2 Ukraine was the key defense supplier to Russia 91
4.1.3 Aircraft and engines were the key defense imports during 2013-2017 92
4.2 Export Market Dynamics 93
4.2.1 Russia’s exports witnessed a decline during 2013-2017 93
4.2.2 India, China, and Vietnam are Russia’s main defense equipment purchasers 94
4.2.3 Aircraft and ships account for the majority of Russia’s defense exports 95
5 Industry Dynamics 96
5.1 Five Forces Analysis 96
5.1.1 Bargaining Power of Supplier: Medium to High 97
5.1.2 Bargaining Power of Buyer: High 97
5.1.3 Barrier to Entry: High 97
5.1.4 Intensity of Rivalry: High 97
5.1.5 Threat of Substitution: High 97
6 Market Entry Strategy 98
6.1 Market Regulation 98
6.1.1 Entry into the defense sector is highly regulated 98
6.2 Market Entry Route 99
6.2.1 Budgeting Process 100
6.2.2 Procurement Policy and Process 102
6.3 Key Challenges 103
6.3.1 Russian government’s aversion to Western defense technology 103
7 Competitive Landscape and Strategic Insights 104
7.1 Competitive Landscape Overview 104
7.1.1 The domestic industry is consolidating to provide better focus and fund allocation 106
7.1.2 Defense sector is dominated by domestic firms, with no foreign presence 106
7.2 Key Domestic Companies 107
7.2.1 United Aircraft Corporation - Overview 107
7.2.2 United Aircraft Corporation - Major Products 107
7.2.3 United Aircraft Corporation - Recent Announcements and Strategic Initiatives 107
7.2.4 United Aircraft Corporation - Alliances 109
7.2.5 United Aircraft Corporation (UAC) - Recent Contract Awards 110
7.2.6 United Aircraft Corporation (UAC) - Financial Analysis 111
7.2.7 Sukhoi - Overview 113
7.2.8 Sukhoi - Major Products 113
7.2.9 Sukhoi- Recent Announcements and Strategic Initiatives 114
7.2.10 Sukhoi - Alliances 116
7.2.11 Sukhoi: Recent Contract Awards 116
7.2.12 Irkut Corporation - Overview 118
7.2.13 Irkut Corporation - Major Products 118
7.2.14 Irkut Corporation - Recent Announcements and Strategic Initiatives 119
7.2.15 Irkut Corporation - Alliances 119
7.2.16 Irkut Corporation - Recent Contract Wins 120
7.2.17 Irkut Corporation - Financial Analysis 121
7.2.18 Rostec - Overview 123
7.2.19 Rostec - Major Products 124
7.2.20 Rostec- Recent Announcements and Strategic Initiatives 124
7.2.21 Rostec - Alliances 125
7.2.22 Rostec: Recent Contract Awards 126
7.2.23 Uralvagonzavod - Overview 127
7.2.24 Uralvagonzavod - Major Products 127
7.2.25 Uralvagonzavod - Recent Announcements and Strategic Initiatives 127
7.2.26 Uralvagonzavod - Alliances 128
7.2.27 Uralvagonzavod - Recent Contract Wins 129
7.2.28 Splav - Overview 130
7.2.29 Splav - Major Products 130
7.2.30 Splav - Recent Announcements and Strategic Initiatives 130
7.2.31 Splav - Alliances 130
7.2.32 KBP Instrument Design Bureau - Overview 131
7.2.33 KBP Instrument Design Bureau - Major Products 131
7.2.34 KBP Instrument Design Bureau - Recent Announcements and Strategic Initiatives 132
7.2.35 KBP Instrument Design Bureau - Recent Contract Wins 133
7.2.36 V.A.Degtyarev Plant - Overview 134
7.2.37 V.A.Degtyarev Plant - Major Products 135
7.2.38 Kalashnikov Concern - Overview 136
7.2.39 Kalashnikov Concern - Major Products 136
7.2.40 Kalashnikov Concern - Recent Announcements and Strategic Initiatives 137
7.2.41 Oboronprom Corporation - Overview 138
7.2.42 Oboronprom Corporation - Major Products 138
7.2.43 Oboronprom Corporation - Recent Announcements and Strategic Initiatives 139
7.2.44 Oboronprom Corporation - Alliances 140
7.2.45 Oboronprom Corporation - Recent Contract Wins 140
7.2.46 United Engine Corporation (UEC) - Overview 142
7.2.47 United Engine Corporation (UEC) - Major Products 142
7.2.48 United Engine Corporation (UEC) - Recent Announcements and Strategic Initiatives 142
7.2.49 Tactical Missiles Corporation: Overview 143
7.2.50 Tactical Missiles Corporation - Major Products 144
7.2.51 Tactical Missiles Corporation - Recent Announcements and Strategic Initiatives 144
7.2.52 Tactical Missiles Corporation - Alliances 145
7.2.53 Tactical Missiles Corporation - Recent Contract Wins 145
7.2.54 Almaz-Antey - Overview 146
7.2.55 Almaz-Antey - Major Products 146
7.2.56 Almaz-Antey - Recent Announcements and Strategic Initiatives 146
7.2.57 Almaz-Antey - Alliances 147
7.2.58 Almaz-Antey - Recent Contract Wins 147
7.2.59 Kurganmashzavod - Overview 148
7.2.60 Kurganmashzavod - Major Products and Services 148
7.2.61 Kurganmashzavod - Recent Announcements and Strategic Initiatives 149
7.2.62 Kurganmashzavod - Alliances 149
7.2.63 Kurganmashzavod - Recent Contract Wins 150
7.2.64 United Shipbuilding Corporation - Overview 151
7.2.65 United Shipbuilding Corporation (USC) - Major Products and Services 152
7.2.66 United Shipbuilding Corporation (USC) - Recent Announcements and Strategic Initiatives 153
7.2.67 United Shipbuilding Corporation - Recent Contract Wins 154
8 Business Environment and Country Risk 155
8.1 Economic Performance 155
8.1.1 GDP Per Capita, US$ 155
8.1.2 GDP (current US$ Billion) 156
8.1.3 Exports of Goods and Services (LCU Billion) 157
8.1.4 Imports of Goods and Services (LCU Billion) 158
8.1.5 Gross National Disposable Income (US$ Billion) 159
8.1.6 LCU per US$ (Period Average) 160
8.1.7 Market Capitalization of Listed Companies (US$ Billion) 161
8.1.8 Market Capitalization of Listed Companies (% of GDP) 162
8.1.9 Government Cash Surplus/Deficit as a Percentage of GDP (LCU) 163
8.1.10 Goods Exports as a Percentage of GDP 164
8.1.11 Goods Imports as a Percentage of GDP 165
8.1.12 Services Imports as a Percentage of GDP 166
8.1.13 Services Exports as a Percentage of GDP 167
8.1.14 Foreign Direct Investment, net (BoP, current US$ Billion) 168
8.1.15 Net Foreign Direct Investment as a Percentage of GDP 169
8.1.16 Mining, Manufacturing, and Utilities Output (LCU Billion) 170
9 Appendix 171
9.1 About SDI 171
9.2 Disclaimer 171