Naperville, IL -- (SBWIRE) -- 12/09/2013 -- Reportstack, provider of premium market research reports announces the addition of Future of the Kazakh Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 market report to its offering
This report is the result of SDI's extensive market and company research covering the Kazakh 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 Future of the Kazakh Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 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 Kazakh defense industry.
What is the current market landscape and what is changing?
As one of the emerging powers in Central Asia, Kazakhstan displays a strong potential for growth compared to its neighboring nations. While the country invested US$9.2 billion cumulatively over the period 2009-2013, the defense budget is expected to increase to US$15.3 billion cumulatively in the forecast period. This growth is stimulated by the government's initiatives to procure new defense systems and combat the rising threat of domestic terrorism. Per-capita defense expenditure is expected to grow during the forecast period from US$157.1 in 2014 to US$206.3 in 2018The capital expenditure budget is forecast to increase from US$1.0 billion in 2014 to US$1.4 billion in 2018, recording a CAGR of 8.88%, due to the government's modernization plans. The country's budget for homeland security is also projected to increase over the forecast period, driven by increasing threats from human trafficking, drug smuggling, and internal security. Demand for equipment over the forecast period is mainly expected to revolve around multi-role helicopters, corvettes and small patrol boats, air defense systems, and transport armored vehicles.
What are the key drivers behind recent market changes?
Certain factors pertaining to the security of Kazakhstan are expected to drive the defense expenditure of the nation in the coming years. These include the risk of attacks from internal and external terrorist groups, and border conflicts with the Algeria and Spain. Additionally, ammunition modernization initiatives will be an area of focus for military expenditure over the forecast period.
What makes this report unique and essential to read?
The Future of the Kazakh Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, 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 2014to 2018, 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 Kazakh 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 Kazakhstan. 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
Corruption and bribery have heavily bruised all sectors of business activity in Kazakhstan, including that of the defense industry. According to Transparency International's Corruption Perceptions Index 2012, Kazakhstan is classified as a highly corrupt country. Corruption has manifested itself in various forms ranging from bureaucratic and political affairs and misappropriation of public resources to fraud transactions related to state assets. Unaccountability and secretive and opaque contract dealings have aggravated the level of corruption within the sector.
Following its segregation from the Soviet Union in the early 1990s, Kazakhstan remains dependent on Russia for its arms and ammunitions. The country shares close business relations with the Russian government and this is expected to continue over the forecast period. However, since 2002, Kazakhstan started establishing trade relations with countries in the European Union (EU) based on the Partnership and Cooperation Agreement (PCA) that provides the basis for co-operation for industrial and technological agreements. Therefore, as long as these relationships persist, Russia and certain European countries are set to dominate the Kazakh defense market in the forecast period; creating an obstacle for the suppliers of US and Chinese territories.
Kazakhstan's inventory of artillery and ammunitions was inherited from the Soviet Union after it was dissolved in 1991. These Soviet-made command, control, communications, and intelligence systems, coupled with aged vehicles and machinery, severely limits Kazakhstan's armed forces' capabilities and requires significant upgrading and replacement. However, the country was unable to opt for an equipment modernization program in the 1990s and early 2000s owing to inadequate funding. With a steady increase in its defense budget in the last couple of years, the country is expected to spend a considerable amount on military modernization. The expenditure will be directed towards the introduction of automated command and control (C2) systems within the military, upgrading military equipment, enhancing air and missile defense systems, modernizing its arms and ammunitions inventory, intensifying the combat training of soldiers and setting up advanced military infrastructure.
Kazakhstan is one of the prime hubs of human trafficking in Central Asia. The country serves as a source, transit, and a destination for human trafficking, where men, women, and even children are being forced into numerous illicit activities. Human trafficking gangs use Kazakhstan as a stopover point, where people are trafficked from the neighboring states of Uzbekistan,Kyrgyzstan,Tajikistan, andUkraineand, subsequently, transferred to European countries such asRussia and Lebanon,and theUnited Arab Emirates(UAE). While women are subjected to forced labor in domestic services, construction and agricultural industries, and face commercialsexual exploitation, men are compelled to perform various illegal tasks. The government's slow response has aggravated the problem and Kazakhstan is currently on the Tier 2 Watch List for human trafficking. The country is collaborating with other nations, especially those with the Commonwealth of Independent States (CIS) and the International Organization for Migration (IOM) to combat human trafficking. Over the forecast period, the Kazakh government is expected to invest in strengthening its border security and surveillance to control such activities.
During the period 2008-2010, Kazakhstan displayed a low level of imports, with a jump of 86.8% in 2010. In an attempt to enhance the capabilities of its armed forces, Kazakhstan is expected to import defense equipment such as helicopters, naval boats, and radar systems during the forecast period. Kazakhstan currently does not export arms as the domestic defense industry is under-developed, but this is a trend that is expected to change over the forecast period with the attempts of the government to develop and expand the domestic defense manufacturing industry.
Eurocopter SAS., Russian Aircraft Corporation "MiG, Uralvagonzavod, Sagem , Astrium, Thales
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