Introduction and Landscape
Why was the report written?
The Bruneian defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Bruneian defense industry.
What is the current market landscape and what is changing?
Brunei's defense market is currently in its nascent stage. However, the threat of international terrorism, border disputes with neighboring countries and a general need to deter aggression from hostile forces have resulted in the initiation of a modernization plan for the country's armed forces. Brunei's defense budget is expected to record a CAGR of 6.8% in the forecast period with defense expenditure as a percentage of GDP growing to an average of 3.1%.
What are the key drivers behind recent market changes?
Bruneian government is looking to upgrade its armed forces by utilizing new military technologies, increasing the quality of military training and strengthening multilateral partnerships. Also there is growing concern that Islamic terrorist groups, such as Jemaah Islamiyah, may carry out terrorist attacks on soft targets in Southeast Asia including Brunei. Finally, Brunei is involved in a dispute over the ownership of Spratly Islands with China, the Philippines, Vietnam, Taiwan and Malaysia. Kin 2008, the aggressive stance adopted by China continues to pose a threat to peace in the region. Increased border security is expected to drive defense spending in the country during the forecast period.
What makes this report unique and essential to read?
The Bruneian Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 provides detailed analysis of the current industry size and growth expectations from 2013 to 2017, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
Key Features and Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2013to 2017, including highlights of key growth stimulators, and also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
The report includes trend analysis of imports and exports, together with their implications and impact on the Brunei defense industry.
The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
The report helps the reader to understand the competitive landscape of the defense industry in Brunei. It provides an overview of key defense companies, both domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
Key Market Issues
A lack of transparency and a small budget hampers the entry of foreign investors into Brunei's defense sector. Military procurement is a closed process with no clear criteria to be met in order to secure an order. In addition, with virtually no participation from the private sector, the country's defense sector lacks the enterprise for rapid development. Moreover, Brunei's defense budget is small compared to its neighbors and other leading defense spenders, failing to attract significant interest from foreign investors.
Brunei does not export any arms to foreign countries as the domestic defense industry is still in its nascent stages. It currently imports arms only from Germany and France but is in talks with other countries such as China, Ukraine, Russia, Indonesia and the US for military procurement. Domestic participation in the defense sector is restricted to the semi-government-owned military procurement firm Royal Brunei Technical Services, which manages the acquisition of systems, equipments and related material and services.
Brunei is not a signatory to the WTO agreement on government procurements, which are conducted by ministries and the State Tender Board of the Ministry of Finance. Foreign investors seeking to enter Brunei's defense market are selectively invited by the government to bid on procurements, with no open tenders being published. The award process often lacks transparency, with tenders sometimes not being awarded or being re-tendered for reasons not made public.
Brunei's military spending, which stands at US$0.44 billion in 2012, has increased at a CAGR of 6.38% during the review period and is projected to register a CAGR of 6.8% during the forecast period, in order to reach US$0.61 billion by 2017. The country's defense expenditure is expected to be driven primarily by modernization initiatives, border disputes, and the prevention of international terrorism. Moreover, years of defense budget underfunding and the need to develop military capacity to deter aggression has created the need for equipment such as fighter aircraft, military helicopters, infantry fighting vehicles, and naval defense systems.
Brunei's defense industrial base is largely undeveloped and as a result the country is highly dependent on foreign suppliers to meet its military needs. Until now the country did not focus much on its defense sector owing primarily to lack of external or internal threats. However, factors such as international terrorism and border disputes a threat to its security.
The country has hosted a biennial defense exhibition since 2007, providing investors with an opportunity to access the country's defense market. During 2009, 250 companies representing 25 countries participated in the event. Exhibitors included Bell Helicopter, Daewoo, EADS, General Dynamics, Lockheed Martin, Renault Trucks Defense and Saab. Brunei's domestic defense industry is largely undeveloped, so a large number of foreign suppliers enter the market through the direct sale of arms.
This report is the result of SDI's extensive market and company research covering the Bruneian defense industry, and provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news.
1.1. What is this Report About?
1.3. Summary Methodology
1.4. SDI Research Terrorism Index
1.5. About Strategic Defence Intelligence (www.strategicdefenceintelligence.com)
2 Executive Summary
3 Market Attractiveness and Emerging Opportunities
3.1. Defense Market Size Historical and Forecast
3.1.1. Brunei's defense expenditure expected to increase at a CAGR of XX% during the forecast period
3.1.2. Modernization initiatives, international terrorism, and border disputes are expected to drive defense spending
3.1.3. Military spending as a percentage of GDP is expected to increase during the forecast period
3.2. Analysis of Defense Budget Allocation
3.2.1. The share of capital expenditure in the overall defense budget is expected to increase during the forecast period
3.2.2. Capital expenditure budget expected to grow during the forecast period
3.2.3. Government to spend US$XX billion on revenue expenditure during the forecast period
3.3. Homeland Security Market Size and Forecast
3.3.1. Homeland security (HLS) expenditure expected to grow moderately over the forecast period
3.3.2. HLS expenditure to be driven by the country's efforts to counter human trafficking, cyber threats, money laundering, and terrorism financing
3.3.3. Brunei faces a moderate level of threat from foreign terrorist organizations
3.4. Benchmarking with Key Global Markets
3.4.1. Brunei's defense expenditure is expected to remain low during the forecast period
3.4.2. Brunei's defense expenditure as percentage of GDP higher than some of the leading defense spenders
3.4.3. Brunei has a high per capita defense expenditure
3.4.4. Brunei faces a low level of threat from foreign terrorist organizations
3.5. Market Opportunities: Key Trends and Growth Stimulators
3.5.1. S-70i helicopter program will provide business opportunities
3.5.2. Solder modernization program will create demand for camouflage combat uniforms
3.5.3. Demand for naval defense equipment expected to increase
3.5.4. Modernization of the air force will create demand for combat aircraft, transport aircraft, helicopters and UAVs
3.5.5. Demand for equipment to enhance land force capabilities is expected to increase
3.5.6. Rise in business opportunities for the services sector
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense imports expected to increase during the forecast period
4.1.2. Germany dominated Brunei's defense imports during 2011
4.1.3. Ships were the major defense imports during 2010 and 2011
4.2. Export Market Dynamics
4.2.1. Brunei does not export military equipment due to a lack of domestic manufacturing capacity
5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of supplier: low
5.1.2. Bargaining power of buyer: medium
5.1.3. Barrier to entry: high
5.1.4. Intensity of rivalry: low to medium
5.1.5. Threat of substitution: low
6 Market Entry Strategy
6.1. Market Regulation
6.1.1. Brunei has not disclosed any offset obligations imposed by the country
6.1.2. FDI in the defense sector is controlled entirely by the government
6.2. Market Entry Route
6.2.1. The biennial defense exhibition provides an attractive entry route
6.2.2. Historical evidence points to direct commercial sales being the preferred entry route
6.3. Key Challenges
6.3.1. A relatively small defense budget fails to attract investors and suppliers
6.3.2. Lack of transparency in the bidding process makes foreign companies wary of investing
7 Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Private Sector Companies
7.2.1. Royal Brunei Technical Services: overview
7.2.2. Royal Brunei Technical Services: services
7.2.3. Royal Brunei Technical Services: recent announcements and strategic initiatives
7.2.4. Royal Brunei Technical Services: alliances
7.2.5. Royal Brunei Technical Services: recent contract wins
8 Business Environment and Country Risk
8.1. Demographics and Social Statistics
8.1.1. Population - Female
8.1.2. Population - Male
8.2. Energy and Utilities
8.2.1. Crude Oil Distillation Capacity
8.2.2. Electricity Installed Capacity
8.2.3. Fossil Fuels Proven natural gas reserves
8.2.4. Fossil Fuels- Proved oil reserves
8.2.5. Natural Gas Consumption
8.2.6. Natural Gas Production
8.2.7. Net Conventional Thermal Electricity Generation
8.2.8. Petroleum, Consumption
8.2.9. Petroleum, Production
8.3. Social and Political Risk
8.3.1. Political Stability Index
9.1. Contact Us
9.2. About SDI
List of Tables
Table 1: Bruneian Defense Expenditure, 2008-2012
Table 2: Bruneian Defense Expenditure, 2013-2017
Table 3: Bruneian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2008-2012
Table 4: Bruneian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2013-2017
Table 5: Bruneian Defense Budget Split Between Capital and Revenue Expenditure (%), 2008-2012
Table 6: Bruneian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2017
Table 7: Brunei's Defense Capital Expenditure (US$ billion), 2008-2012
Table 8: Brunei's Defense Capital Expenditure (US$ billion), 2013-2017
Table 9: Brunei's Defense Budget Allocation for Revenue Expenditure (US$ billion), 2008-2012
Table 10: Brunei's Defense Budget Allocation for Revenue Expenditure(US$ billion),2013-2017
Table 11: Benchmarking with Key Markets - 2008-2012 vs. 2013-2017
Table 12: SDI Terrorism Index
Table 13: Royal Brunei Technical Services - Product Focus
Table 14: Royal Brunei Technical Services - Alliances
Table 15: Royal Brunei Technical Services: - Recent Contract Wins
List of Figures
Figure 1: Bruneian Defense Expenditure, 2008-2012
Figure 2: Bruneian Defense Expenditure, 2013-2017
Figure 3: Bruneian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2008-2012
Figure 4: Bruneian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2013-2017
Figure 5:Bruneian Defense Budget Split Between Capital and Revenue Expenditure (%), 2008-2012
Figure 6: Bruneian Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2017
Figure 7: Brunei's Defense Capital Expenditure (US$ billion),2008-2012
Figure 8: Brunei's Defense Capital Expenditure (US$ billion), 2013-2017
Figure 9: Brunei's Defense Budget Allocation for Revenue Expenditure (US$ billion),2008-2012
Figure 10: Brunei's Defense Budget Allocation for Revenue Expenditure (US$ billion), 2013-2017
Figure 11: SDI Terrorism Heat Map, 2011
Figure 12: SDI Terrorism Index, 2011
Figure 13: Benchmarking with Key Markets - 2008-2012 vs. 2013-2017
Figure 14: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2012 and 2017
Figure 15: Defense Expenditure as Percentage of GDP of Largest Military Spenders (%), 2012
Figure 16: Per-capita Defense Expenditure of the Largest Military Spenders in the World (US$), 2012
Figure 17: Brunei Defense Imports Trend, 2007-2011
Figure 18: Brunei Defense Imports by Country (%), 2007-2011
Figure 19: Brunei's Defense Imports by Category (%), 2007-2011
Figure 20: Industry Dynamics Porter's Five Forces Analysis
Figure 21: Bruneian Population - Female (In Millions), 2008-2017
Figure 22: Bruneian Population - Male (In Millions), 2008-2017
Figure 23: Bruneian Crude Oil Distillation Capacity (Thousand Barrels Per Cal Day), 2000-2009
Figure 24: Bruneian Electricity Installed Capacity (Million Kilowatts), 2000-2009
Figure 25: Bruneian Fossil Fuels Proven natural gas reserves (Trillion Cubic Feet), 2002-2011
Figure 26: Bruneian Fossil Fuels- Proved oil reserves (Billion Barrels), 2002-2011
Figure 27: Bruneian Natural Gas Consumption (Billion Cubic Feet), 2001-2010
Figure 28: Bruneian Natural Gas Production(Billion Cubic Feet),2001-2010
Figure 29: Bruneian Net Conventional Thermal Electricity Generation (BillionKilowatthours), 2001-2010
Figure 30: Bruneian Petroleum Consumption (Thousand Barrels Per Day), 2002-2011
Figure 31: Bruneian Petroleum Production (Thousand Barrels Per Day), 2002-2011
Figure 32: Bruneian Political Stability Index, 2002-2010
Companies Mentioned in this Report
Royal Brunei Technical Services
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