Future of the Finnish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2019
This report is the result of SDI’s extensive market and company research covering the Finnish 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.
Why was the report written?
The Future of the Finnish Defense Industry – Market Attractiveness, Competitive Landscape, and Forecasts to 2019offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Finnish defense industry.
What is the current market landscape and what is changing?
Finland’s total defense expenditure stands at US$3.7 billion in 2014 and is expected to grow at a CAGR of 5.79% over the forecast period, to reach US$4.34 billion in 2019. Finnish defense expenditure is primarily driven by participating in peacekeeping initiatives, the upgrade of military equipment such asF-18 Hornet jet fighters, the soldier modernization program, and the procurement of advanced technology equipment. The Finnish defense industry is expected to focus its expenditure on NASAMS II missile system, Leopard 2A6 main battle tanks, soldier combat systems, transport helicopters, ballistic protection and smart munitions systems, cyber security, and C4ISR systems. The country’s defense budget stands at 1.16% of GDP in 2014 and is expected to increase marginally to 1.23% of GDP by 2019. During 2010–2014, the average capital expenditure allocation stood at 31.6% of the total defense budget, and this is expected to increase marginally over the forecast period to reach 32.1%. Revenue expenditure is expected to decrease from an average of 68.4% during 2010–2014 to 67.9% in the forecast period due to austerity measures by the government. The defense ministry plans to reduce the number of mobilized troops from 350,000 to 230,000 by 2015 and save on training costs by conducting joint activities with the Nordic partners.
What are the key drivers behind recent market changes?
Modernization of defense systems, participation in peacekeeping initiatives, and the perceived threat from Russia expected to drive Finnish defense expenditure.
What makes this report unique and essential to read?
The Future of the Finnish Defense Industry – Market Attractiveness, Competitive Landscape, and Forecasts to 2019provides detailed analysis of the current industry size and growth expectations from 2015 to 2019, 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 provides detailed analysis of the current industry size and growth expectations from 2015 to 2019, 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 Finnish 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 Finland. 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.
reason to buy
The Finnish defense industry favors Nordic and European countries for defense trade, as Finland is a member of the European Defense Agency and NORDEFCO (Nordic Defence Cooperation), which limits the scope for foreign companies to enter Finland’s defense industry. Furthermore, the country follows a strict offset policy, according to which, offsets are mandatory for all transactions exceeding US$13.3 million and investors are required to reinvest 100% of the value of the contract into the Finnish economy. In the case of failure to perform, the foreign investor is obligated to pay a predetermined percentage of the unfulfilled offset obligation.
The Finnish defense forces are affected by the economic slowdown and are cutting operating costs, which is likely to affect training programs and encouraging participation in joint cross-border air and naval Nordic operations to save cost. Finland’s state debt is forecast to increase further, causing lean times for the country’s defense industry. The proposed steps for the forecast period include the closure of some military bases, a more centralized leadership structure, and the discontinuation of the existing four Provincial Command military districts. These changes will be implemented as part of a National Defense Reform Program (NDRP), which also includes a reduction in the number of professional soldiers across all ranks and the redundancies of administrative civilian personnel in the defense forces during 2012–2016.Furthermore, these cuts are leading to the procurement of second-hand equipment from other countries and joint procurement programs with Nordic countries. In January 2014, the defense force has decided to carry out a reform which will reduce the military divisions from 26 to 16 in the coming two years with an estimated cost saving of US$183 million by 2015.