Naperville, IL -- (SBWIRE) -- 06/25/2012 -- Product Synopsis: This report is the result of SDI/ICD Research’s extensive market and company research covering the Russian 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 Russian Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2017 offers the reader insights into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Russian defense industry.
What is the current market landscape and what is changing?
Russia is the world’s third largest defense spender and is forecast to spend US$556.4 billion on defense over the forecast period. Over the forecast period, the Russian government is forecast to continue investing in the modernization of its armed forces, including the replacement of Soviet era equipment.
What are the key drivers behind recent market changes?
Russian defense expenditure was primarily driven by factors such as the level of global demand for its defense systems, its focus on homeland security and its ongoing military reform program. Russia is expected to spend US$277 billion on the acquisition of weapons systems during the forecast period. Ongoing modernization of armed forces is forecast to affect growth of its defense market over the forecast period.
What makes this report unique and essential to read?
The Russian 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 Russian 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 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 Russian defense industry.
The report covers five forces analysis to identify various power centers in the industry and how these are forecast 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 Russia. It provides an overview of key defense companies together with insights such as key alliances, strategic initiatives and a brief financial analysis.
Key Market Issues
In 2008, the Russian government passed the Strategic Sectors Law (SSL), requiring any foreign firms wishing to purchase a controlling interest in a domestic defense firm to be pre-approved by the government. If approved, the foreign firm can only operate as a minority shareholder in the venture and cannot make decisions which would affect the manufacture or sale of the defense systems produced. This restrictive market entry policy has severely limited opportunities for prospective foreign OEMs to enter the Russian defense industry.
From the Soviet era onwards, Russia has traditionally developed its own defense technology in competition with Western nations. Following the disbanding of the Soviet Union, Russia’s investment in the modernization of its defense systems reduced drastically, as funds were diverted towards the reconstruction of the country. Since this disbanding, Russia has been reluctant to allow foreign companies into its defense industry, an attitude that has proved to be a strong entry barrier for foreign OEMs.
The Russian defense sector is saturated with domestic firms, which cater to the majority of the Russian armed forces’ defense needs. Therefore, entry for foreign defense companies is severely restricted, with governmental approval required. Also, foreign firms are not allowed to establish ventures in order to manufacture defense goods in Russia, with foreign companies only permitted to hold a minority share in Russian defense firms and not having the right to make decisions pertaining to the manufacture or sale of defense systems.
Russian defense expenditure registered a CAGR of 10.19% over the review period and is estimated at US$77.9 billion in 2013. It is forecast to grow at a CAGR of 18.00% over the forecast period to reach an estimated US$151 billion in 2017. In total, the country is forecast to spend an estimated US$556.4 billion on its armed forces over the forecast period, of which approximately US$277 billion will be allocated for capital expenditure.
Russia’s homeland security is forecast to grow at a CAGR of 5.90% over the forecast period to reach an estimated US$83.3 billion in 2017. This spending will primarily focus on equipping personnel with surveillance and early warning systems and on providing satellite images of critical infrastructure for disaster recovery planning.
Over the review period, Russia was the world’s second largest arms exporter behind the US. The low cost arms produced by the country and large amount of credit offered to countries such as Venezuela increased arms sales over the review period, with India and China accounting for the highest share of Russia’s defense exports. Over the forecast period, Russia is forecast to continue to account for a significant share of global arms exports.
SukhoiSplavTactical Missiles CorporationAlmaz-AnteyUnited Aircraft CorporationKBP Instrument Design BureauV.A.Degtyarev PlantKurganmashzavodUralvagonzavodIzhevsk Mechanical WorksIrkut CorporationOboronprom Corporation
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