The Bruneian Defense Industry - Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017
Published by ICD-Research
on Nov 19, 2012
- 62 pages
PDF format - Delivered by Email within 1 business day
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.
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.