Naperville, IL -- (SBWIRE) -- 07/08/2013 -- Reportstack, provider of premium market research reports announces the addition of Future of the Sri Lankan 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 Sri Lankan 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 Sri Lankan 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 Sri Lankan defense industry.
What is the current market landscape and what is changing?
With a defense budget of US$1.7 billion and less than 5% marked for capital expenditure, Sri Lanka presents few opportunities for foreign defense companies. Rebuilding northern parts of the country, which were destroyed during the war and repayment of loans taken during the war, are expected to drive the country's military expenditure, which is expected to grow at a CAGR of 6.12% over the forecast period. The country is expected to maintain a low allocation for defense procurement over the forecast period, focusing only on procuring necessary arms as the country focuses on reducing its debt.
What are the key drivers behind recent market changes?
During the forecast period the country is expected to invest US$10.7 billion in the fulfillment of its defense requirements, stimulated by factors such as post-war rehabilitation and a tense relationship with India.
What makes this report unique and essential to read?
The Future of the Sri Lankan 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 2014 to 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 Sri Lankan 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 Sri Lanka. 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
During the forecast period the country is expected to invest US$10.7 billion in its armed forces, of which US$0.44 billion is forecast to be on the acquisition of military hardware, offering foreign OEMs limited opportunities to cater to the Sri Lankan defense industry. Furthermore, during the civil war the country procured weapons by taking loans and, therefore, over the next five years a portion of military expenditure will be spent on the repayment of existing loans. The country is focusing on increasing its revenue expenditure from an average of 94% during the review period to an average of 96% during the forecast period, a factor which is also expected to cause the acquisition of defense equipment to further decline. Such factors do not make the Sri Lankan defense market an attractive investment destination for foreign OEMs.
Incidents of malpractice within Sri Lanka's military industrial base may limit the growth of the country's defense sector. In addition to damaging the country's image in the global arms market, it also discourages foreign OEMs from market entry. For example, in 2010 the former Sri Lankan army chief was found guilty of favoring the defense firm of his son-in-law, and was subsequently convicted. Furthermore, the government has been accused of siphoning off a portion of the contract money for the acquisition of four MiG-27 aircraft and the overhaul of three other MiG-27 craft and a MiG-23 UB trainer contract awarded to the Ukraine in 2006. The government has also been accused of transferring the money to a proxy firm in the UK. All these factors hamper the growth of the Sri Lankan defense industry.
De-mining and rehabilitation: The priority task for the Sri Lankan Army is the de-mining of the region, which was previously controlled by the LTTE, as it placed large quantities of ant-tank mines and other IEDs (Improvised Explosive devices) while retreating. The presence of these mines makes the area incapable of habitation and the Army is actively working on de-mining the land, which is about 1,500 sq. km. Additionally, cities and villages in the northern part of the country were destroyed by both separatists and the armed forces. The Sri Lankan Army also undertook the responsibility of rehabilitation and management of these areas during the review period and the same is expected to continue over the forecast period. Furthermore, the Army operates rehabilitation centers which house 11,000 surrendered LTTE cadres along with about 300,000 civilians who were displaced during the war.
Post-LTTE Tamil movement: The Sri Lankan government considers surviving LTTE members including ex-fighters, supporters, and family members of people who have been affiliated with LTTE will pose a security threat to its integrity. About 11,000 detainees with suspected LTTE links have been screened out to rehabilitation camps in the north of the country and are at present detained without legal framework. In addition, a number of organizations such as TGTE and Associates, Global Tamil Forum, and Nediyawan continued the struggle for an independent Tamil homeland, largely from overseas bases. A significant difference between the LTTE and these new groups are that the latter cannot be easily classified as terrorist organizations as they primarily advocate the use of non-violent methods, and therefore cannot be officially outlawed. These security threats are expected to drive the country's homeland security expenditure.
Sri Lankan defense imports registered a continuous increase during 2006-2008 due to the outbreak of civil war in the country during 2006-2009. However, since the war ended in May 2009, the country's overall arms imports have significantly reduced. With the country focusing on the repayment of debts which it undertook during the conflict with the LTTE, Sri Lankan defense imports are projected to reduce during the forecast period.
AmSafe Bridport, Colombo Dockyard Plc.
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