Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022


Summary

South African military expenditure, declined at a CAGR of 3.18% during 2013-2017. However, it is anticipated to register a CAGR of 4.35% during the forecast period, to value US$4.6 Billion in 2022. The country is an active participant in stability and peacekeeping operations governed by the UN (United Nations), African Union, and the Southern African Development Community, and, as such, seeks higher expenditure on the defense sector.

Capital expenditure is expected to increase at a CAGR of 4.39% over the forecast period, compared to the negative CAGR of 3.34% recorded during 2013-2017. The country is expected to cumulatively spend US$4.2 Billion over the forecast period on procuring defense equipment.

South African homeland security expenditure is expected to register a growth rate of 4.19%. This expenditure is primarily driven by South Africa’s focus on enhancing its defense capabilities to counter high violent crime rates and rising threats of global terrorism. Consequently, demand for surveillance equipment such as CCTV and biometric identification systems is expected to increase during the forecast period.

South African defense imports were highest during 2012-2014 due to the procurement of 26 Gripen aircraft. Aircraft accounted for the largest expenditure during this period, with Sweden the biggest supplier. The other import partners include Russia, the US, France, Israel, and the UK. Aircraft, engines, satellites, missiles, and sensors were the other imports during 2012-2016.

The report “Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the South African 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 South African defense industry market size and drivers: Detailed analysis of the South African defense industry during 2018-2022, 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 South African 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 South African defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.



Companies mentioned in this report: Denel, Ansys Limited, Reutech, Saab Grintek, IVEMA (Pty) Ltd, Aerosud, Global Armour, Milkor (Pty) Ltd, Paramount Advanced Technologies and Tellumat Defense.


Scope

  • The South African defense budget valued at US$3.7 billion in 2017, a fall from US$4.2billion in 2013, and registered a CAGR of -3.18% during 2013-2017. Even though the actual budget increased in local currency, it showed a downward trend in terms of dollar value owing to variations in the exchange rate.
  • During 2013-2017, an average of 19.8% of the country’s total defense budget was allocated to capital expenditure, while an average of 80.2% was reserved for revenue expenditure. Furthermore, capital expenditure is expected to remain constant over the forecast period. The South African Defense Force has expensive and advanced military equipment and the country will focus more on upgrade and maintenance activities over the forecast period. This had been neglected over the years due to insufficient funding and improper budget allocation, which resulted in gradual equipment wear and tear.
  • The MoD is expected to invest in Infantry Fighting vehicles (IFV), transport aircraft and corvettes.




Reasons To Buy

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