Future of the Finnish Defense Industry Market Attractiveness, Competitive Landscape and Forecasts to 2018

Monday 17 June 2013, Amsterdam

Although Finland’s defense budget contracted between 2009 and 2013 – at a CAGR of -0.76% - the government’s desire to strengthen the country’s defense capabilities is expected to spark positive growth in the Finnish defense market between 2014 and 2018, according to new research released by Strategic Defence Intelligence.
This is expected to see a market expansion at an estimated CAGR or 1.56% between 2012-2018 reaching US$3.9 billion. The Finnish government is projected to spend US$18.8 billion on its armed forces, of which an estimated US$6.7 billion will be spent on the procurement of defense systems and weapons.
 


Defense Imports & Exports Set To Improve

In order to increase defense exports and cater to the international arms market, the Finnish government encourages domestic defense companies to collaborate with foreign defense firms. Conversely, foreign investors seek to capitalize on Finnish defense capabilities through the joint development of military hardware. Additionally, the country is focused on defense collaboration with other Nordic countries, thereby enhancing the domestic industrial capabilities of Finland, Norway, and Sweden, and forming a consolidated defense industry. For example, the country jointly established Nammo in 1998 through the merger of the ammunition activities of Raufoss ASA, which is based in Norway, and Celcius AB, which is based in Sweden.

Research findings have discovered that Italy emerged as the largest supplier of defense systems to Finland with a share of 23% of total imports, followed by Switzerland with 20.3%, and Sweden with 16.2%. In 2008, Switzerland supplied 45.8% of the Finnish imports while France, with a 22.4% share, was the second largest supplier to the country. Due to the economic crisis during 2008–2009, defense imports slumped by 72.6%, declining from US$157 million during 2008 to US$43 million in 2009. During the forecast period it is expected that Sweden, France, and Italy will continue to be strong defense trade partners for the country.

Armored vehicles have been discovered as the largest exported defense hardware

The procurement deal signed with Croatia in 2007 meant that armored vehicles were the largest contributor to Finnish defense exports with 53.2% share during 2008-2012 followed by ships with 20%. However, from 2008 onwards, Finland made no exports of ships. During the forecast period, it is anticipated that armored vehicles will continue to dominate the country’s arms exports due to an increase in the global demand for this product.  

This report reveals extensive market and company research covering the Finnish Defence industry, providing a detailed analysis of both historic and forecast defence industry values with regards to the Eurozone crisis.