Summary
Increased threat of terrorism from the Islamic group, Al-Qaeda in the Islamic Maghreb (AQIM) operating in North Africa, an arms race with neighboring countries such as Morocco and Tunisia, and the ongoing modernization of the armed forces are key factors that have compelled Algeria to bolster its defenses and develop a robust defense posture.

With a defense budget of US$10.3 billion in 2017, Algeria is currently the largest military spender in the African region and the world’s tenth largest defense importer of military goods. Military expenditure is strongly supported by the presence of the oil and natural gas industry, where the revenues are directed towards strengthening defense and security.

The country’s capital expenditure is expected to grow at a robust CAGR of 9.48% during the forecast period 2017 to 2022. The Algerian Government is expected to procure replacement air refueling tankers, transport aircraft, multi role fighters, armored vehicles, corvettes, and frigates, among others. Additionally, opportunities in security systems and platforms such as unmanned aerial vehicles (UAV), thermal imaging sensors, motion sensors, alarms, and radar systems are expected to arise as a result of the country’s focus on strengthening border security.

Algeria’s sudden rise as a major military force in Africa can be attributed to its burgeoning economy and a desire to establish its military superiority in the region. Algeria’s domestic defense manufacturing capabilities are still underdeveloped, due to which the country mainly relies on foreign imports. Historically, Algeria has primarily imported weapons and related systems from Russia, occupying a 60.4% share; however, this trend is gradually changing as it opens its market to other countries and reduces its dependency on one particular nation.

The country is increasing efforts to reduce its military dependency on foreign suppliers and, therefore, is largely concentrating on the joint development of defense systems as to strengthen its domestic defense manufacturing capabilities. Furthermore, Algeria has witnessed a number of JVs with Algerian, Russian, French, and Serbian companies in areas such as armored vehicles, unmanned aircraft, military healthcare, and counter-terrorism equipment.

This report offers insights into market opportunities and entry strategies adopted by foreign OEMs (original equipment manufacturers) to gain a market share in the Algerian defense industry.

In particular, it offers in-depth analysis of the following -

  • Market opportunity and attractiveness: detailed analysis of the current industry size and growth expectations during 2018-2022, including highlights of the key growth stimulators. It also benchmarks the industry against key global markets and provides detailed understanding of emerging opportunities in specific areas
  • Procurement dynamics: trend analysis of imports and exports, together with the implications and impact this will have on the Algerian defense industry
  • Industry structure: Five Forces analysis to identify various power centers in the industry and how these are expected to develop in the future
  • Market entry strategy: analysis of possible ways to enter the market, coupled with detailed descriptions of how existing companies have entered the market, including: key contracts, alliances, and strategic initiatives
  • Competitive landscape and strategic insights: analysis of the competitive landscape of the defense industry in Algeria, providing an overview of key defense companies (both domestic and foreign), together with insights such as: key alliances, strategic initiatives, and a brief financial analysis
  • Business environment and country risk: a range of drivers at country level, assessing the business environment and country risk. It covers historical and forecast values for a range of indicators, evaluating business confidence, economic performance, infrastructure quality and availability, labor force, demographics, and political and social risk


Companies included within the research comprise of JSC Rosoboronexport, Entreprise Nationale des V?hicules Industriels, NIMR-Algerie , Khenchela Mechanical Constructions Establishment (ECMK),Seriana Company of Industrial Achievements (ERIS) and National Office of Explosive Substances, EPE

Scope

  • With a defense budget of US$10.3 billion in 2017, Algeria is currently the largest military spender in the African region and the world’s tenth largest defense importer of military goods. Military expenditure is strongly supported by the presence of the oil and natural gas industry, where the revenues are directed towards strengthening defense and security. The increased threat of terrorism from the Islamic group, Al-Qaeda in the Islamic Maghreb (AQIM) operating in North Africa, an arms race with neighboring countries such as Morocco and Tunisia, and the ongoing modernization of the armed forces are key factors to drive military expenditure. The instability in neighboring Libya, coupled with the rapid spread of the Islamic State (IS) in the country, has compelled Algeria to bolster its defenses and develop a robust defense posture.
  • During 2013-2017, an average of 20% of the country’s total defense budget was allocated to capital expenditure, while an average of 80% was reserved for revenue expenditure. The capital expenditure share valued 19.6% in 2017, and is expected to marginally increase during the forecast period to reach 21.5% in 2022. This is primarily due to Algeria having initiated a broad range of military modernization programs, with explicit emphasis on developing the country’s domestic defense industrial capabilities. In 2016, the Algerian Government announced future modernization plans in order to develop a strong defense industry, much of which is expected to focus on domestic industrial capability development.
  • The MoD is expected to invest in fighter and multi-role aircraft, transport aircraft, attack helicopters, and Armored Personnel Carrier (APC).

Reasons To Buy

  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Algerian 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 Algerian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts