Naperville, IL -- (SBWIRE) -- 06/25/2012 -- This report is the result of ICD Research / Strategic Defence Intelligence’s extensive market and company research covering the Australian defense industry. It 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 Australian 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 Australian defense industry.
What is the current market landscape and what is changing?
While Australian defense expenditure is estimated to reach US$28.5 billion in 2012, this value is expected to grow at a CAGR of 5.13% over the forecast period, to reach US$38.8 billion by 2017. This is the direct result of government plans to modernize its military, to assist the allied troops in the global war against terrorism and the rising number of peacekeeping missions undertaken by the Australian forces. Along with the defense budget, the capital and revenue expenditure also is expected to show steady growth in the forecast period. Furthermore, the defense budget as a percentage of its GDP is expected to increase from its estimated figure of 1.8% in 2012 to 2% by 2017.
What are the key drivers behind recent market changes?
In 2009, the Australian government launched a new military modernization plan to upgrade its forces in order to counteract the threat posed by rising global terrorism, changing political dynamics in the Asia-Pacific region and the rising number of peacekeeping operations undertaken by Australian forces. The Australian Government is also expected to increase budget allocation for revenue expenditure in order to manage matters such as death, retirement benefits and support services.
What makes this report unique and essential to read?
The Australian defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017provides 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
Market opportunity and attractiveness
The report provides detailed analysis of the Australian defense 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.
The report includes trend analysis of imports and exports, together with its implications and impact on the Australian 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.
Market entry strategy
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.
Competitive landscape and strategic insights
The report helps the reader to understand the competitive landscape of the defense industry in Australia. 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
Cost overruns and project delays continue to worry defense industry
The Australian DMO has taken criticism for the project delays and cost overruns associated with its domestic defense procurements, several of which have cost double the original estimations. Currently, the Australian defense industry is facing cost overruns and delays in its project to acquire 100 F-35 joint strike fighters. As a result, similar opportunities may be offered to foreign firms, rather than domestic firms, during the forecast period.
Global supply chain pose challenge for foreign OEMs
The Australian Industry Capability (AIC) program supports the domestic defense industry by encouraging foreign OEMs to grant domestic access to the global supply chain in exchange for market entry. Global supply chain deeds can be entered into voluntarily or as part of a procurement contract, and insist that the foreign OEM procures its equipment or components from a domestic company. While global supply chain deeds offer substantial export opportunities to domestic firms, they can pose major concerns for foreign OEMs, as Australian defense products are often expensive due to high labor costs and expensive logistics related to the country’s geographical location.
Australian SME’s face constant threat of cyber attacks
The Australian Government’s November 2009 Cyber Security Strategy professed the fact that Australian Government computer networks are increasingly under threat from malicious cyber-attacks. Recently the Government has initiated the Internet Gateway Reduction Program, which aims to reduce the number of internet gateways to the minimum for improved operational efficiency, reliability and security. The domestic Australian cyber security industry is entering into partnerships with the US cyber security participants in order to gain technical and strategic insights into the domain.
Australia’s defense expenditure expected to increase at a CAGR of 5.13% during the forecast period
During the review period, the defense expenditure of Australia exhibited a CAGR of -1.42% to reach an estimated US$28.5 billion in 2012, and is expected to grow at a CAGR of 5.13% over the forecast period to reach US$38.8 billion by 2017.The government is expected to make cumulative capital acquisitions of US$40.2 billion during the forecast period, 35% of which will be procured from domestic firms, in order to support government plans to increase the independence of its defense industry. The acquisitions are expected to focus on the improvement of capabilities of the Australian Air Force and Australian Navy.
Homeland security spending is expected to increase at a CAGR of 10.60% during the forecast period
Australian homeland security expenditure registered a CAGR of 5.85% during the review period and is expected to grow at a CAGR of 10.60% during the forecast period to reach an estimated US$411.08 million in 2017. The Australian government is expected to spend US$1.7 billion cumulatively on its homeland security (HLS) market over the forecast period, including border protection, aviation security and protection against illegal fishing.
Defense imports are expected to increase during the forecast period
While Australian defense imports fell during 2006-2008, the country witnessed a sudden rise in defense imports in 2009 due to government efforts to modernize its military. In accordance with the 2010 defense White Paper, growth is expected to continue during the forecast period. The government is also focused on encouraging foreign OEMs to outsource manufacturing to gain the necessary technology to modernize its military. Therefore, Australia’s imports of advanced defense systems from foreign companies are expected to increase during the forecast period
Raytheon Australia, Boeing Defense Australia, Saab Systems, General Dynamics Land Systems Australia, Lockheed Martin Australia, Navantia, Australian Aerospace, Serco Sodexho Defense Services, Thales Australia, Australian Submarine Corporation