Summary
Venezuela is amongst the largest arms importers in Latin America and accounts for nearly one-third of the military goods imported in the region. The increasing military expenditure is largely supported by revenues from the world’s largest proven oil reserves in the country. This burgeoning defense expenditure can be attributed to the modernization of the armed forces, re-armament programs, border disputes, and a strong focus on the development of the indigenous military sector. Defense expenditure in Venezuela is expected to register a CAGR of nearly 0.4% to reach about US$8.8 Billion by 2022.

Venezuelan homeland security (HLS) expenditure stands at over US$21 Billion in 2017 and is expected to register a CAGR of almost 0.8%, to cross US$22 Billion in 2022 from around US$21.5 Billion in 2018. The expenditure is primarily driven by the need to respond to growing threats from organized crime, current civil unrest, and cyber threats. At the same time, a growing economic crisis is expected to cut down HLS expenditure.
Venezuela’s domestic defense production capabilities are relatively underdeveloped. And, as a result, the country relies on foreign OEMs to fulfill its military requirements for sophisticated equipment. During the historic period, Russia emerged as the largest supplier of military hardware to the country with over 70% share of imports, followed by China at around 17%, and Spain at just over 5%.

Historically, Russian defense firms have entered the Venezuelan defense industry through direct sales. However, 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 in order to strengthen its domestic defense manufacturing capabilities. Moreover, the country has witnessed a number of military partnership agreements with Brazil, Russia, Ecuador, and Argentina, among many others.

The report “Future of the Venezuelan Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022” offers detailed analysis of the Venezuelan 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, this report provides an in-depth analysis of the following -

  • The Venezuelan defense industry market size and drivers: Detailed analysis of the Venezuelan 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 Venezuelan 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 Venezuelan 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: CA Venezolana de Industrias Militares (CAVIM), UCOCAR, and Diques y Astilleros Nacionales CA (DIANCA)

Scope

  • With a defense budget of US$8.6 billion in 2017, Venezuela is amongst the largest arms importers in Latin America and accounts for nearly one-third of the military goods imported in the region. The increasing military expenditure is largely supported by revenues from the world’s largest proven oil reserves in the country. This burgeoning defense expenditure can be attributed to the modernization of the armed forces, re-armament programs, border disputes, and a strong focus on the development of the indigenous military sector.
  • The country’s capital expenditure (CAPEX) is anticipated to increase during the forecasted. A number of procurements have fueled growth of the capital budget allocation, including the Shannxi Y-8 transport aircraft, Norinco VN-4 armored vehicles, T-72BIV MBTs (Russian tanks) and BTR-80 armored vehicles, S-125 Pechora-2M SAM systems, Sukhoi fighter jets, 2S23 Nona-SVK self-propelled guns, Stan Patrol 5009 offshore patrol vessels, Stan Patrol 4207 coastal patrol vessels, Enstrom 480 helicopters, and Diamond Aircraft DA40NG Star trainers. Key opportunities for equipment suppliers are expected in areas such as multi-role aircraft, naval vessels, missile systems, surveillance systems, and UAVs.
  • The Venezuelan homeland security expenditure is primarily driven by the need to respond to growing threats from organized crime, current civil unrest, and cyber threats. At the same time, a growing economic crisis is expected to cut down HLS expenditure. The country will invest in biometric systems, border protection and training, CCTV systems, electronic surveillance systems, radar systems, and UAVs. Additionally, opportunities in security systems and platforms are expected to arise as a result of the country concentrating on strengthening border security.

Reasons To Buy

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