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Future of the Kuwaiti Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

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Date: 11-Sep-2018
No. of pages: 114
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The Future of the Kuwaiti Defense Industry Market Attractiveness, Competitive Landscape and Forecasts to 2023, published by Strategic Defence Intelligence, provides readers with detailed analysis of both historic and forecast defense industry values, factors influencing demand, the challenges faced by industry participants, analysis of industry leading companies, and key news.

Synopsis

This report offers detailed analysis of the Kuwaiti defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following


  • The Kuwaiti defense industry market size and drivers: detailed analysis of the Kuwaiti defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns

  • Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country

  • Porter’s Five Force analysis of the Kuwaiti defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, bargaining power of buyers, threat of substitution, intensity of rivalry, and barriers to entry

  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years

  • Market opportunities: details of the top five defense investment opportunities over the next 10 years

  • Competitive landscape and strategic insights: analysis of the competitive landscape of the Kuwaiti defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis


Scope


  • With a military expenditure of US$7.6 billion in 2018, Kuwait is expected to cumulatively spend US$48.3 billion on its military over the forecast period. Kuwaiti military and security expenditure, which stood at US$7.6 billion in 2018, registered a CAGR of 6.87% during the historic period.

  • Between 2014 and 2018, the country allocated an average of 19.3% of the total defense budget to capital expenditure, and the remaining 80.7% to revenue expenditure

  • The country’s revenue expenditure is characterized by high levels of investment in operating its military, such as salaries and the pensions of retired personnel.

  • Over the forecast period, the Kuwaiti Ministry of National Defense (MND) is expected to increase its current level of allocation for capital expenditure, averaging 21.3% of the total defense budget.

  • The MoD is expected to invest in multirole aircraft, corvettes, and airborne C4ISR among others


Reasons to buy


  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Kuwaiti defense industry market trends for the coming five years

  • The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period

  • Detailed profiles of the top domestic and foreign defense manufacturers with information about their products, alliances, recent contract wins, and financial analysis wherever available. This will provide the user with a total competitive landscape of the sector

  • A deep qualitative analysis of the Kuwaiti defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts


Companies Mentioned


  • Lockheed Martin

  • Raytheon

  • Abu Dhabi Ship Building (ADSB)

  • Boeing

  • Eurofighter Jagdflugzeug

  • Airbus Helicopters

  • General Dynamics

Future of the Kuwaiti Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 8
1.1. What is this Report About? 8
1.2. Definitions 8
1.3. Summary Methodology 10
1.4. About Strategic Defence Intelligence 11

2. Executive Summary 12

3. Market Attractiveness and Emerging Opportunities 13
3.1.1. Primary Threat Perception 14
3.1.2. Military Doctrine and Strategy 15
3.1.3. Military Fleet Size 17
3.1.4. Procurement Programs 20
3.1.5. Social, Political and Economic Environment and Support for Defense Projects 23
3.1.6. Political and Strategic Alliances 24
3.2. Defense Market Size Historical and Forecast 25
3.2.1. Defense and security expenditure to cumulatively value US$48.3 billion over the forecast period 25
3.2.2. The border dispute with Iraq, coupled with its military modernization program, will be key factors to drive defense expenditure 27
3.2.3. Defense budget as a percentage of GDP to average 6.2% over the forecast period 28
3.3. Analysis of Defense Budget Allocation 30
3.3.1. Capital expenditure allocation to increase over the forecast period 30
3.3.2. Capital expenditure is expected to grow at a CAGR of 7.73% over the forecast period 32
3.3.3. Per capita defense expenditure to increase over the forecast period 34
3.4. Homeland Security Market Size and Forecast 35
3.4.1. Cyber threats, illegal drug trade, and human trafficking will be the key factors to drive homeland security 35
3.4.2. Kuwait is considered at ‘moderate risk’ of terrorist attack 36
3.4.3. Kuwait faces moderate threat from terrorist organizations 37
3.4.4. Kuwait has a terrorism index score of 3.8 39
3.5. Benchmarking with Key Global Markets 40
3.5.1. Kuwaitis a comparatively low defense spender 40
3.5.2. The country has a relatively low defense budget compared to other Middle Eastern nations 42
3.5.3. Kuwaiti defense expenditure as a percentage of GDP is expected to decrease 43
3.6. Market Opportunities: Key Trends and Drivers 44
3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023 44
3.6.2. Multi-Role Aircraft 45
3.6.3. Naval Vessels MRO - Corvettes 46
3.6.4. Airborne C4ISR 47

4. Defense Procurement Market Dynamics 48
4.1. Import Market Dynamics 49
4.1.1. Kuwaiti defense industry is import driven 49
4.1.2. Kuwait imports the majority of its military equipment from the US 50
4.1.3. Air Defense Systems, Aircraft and Missiles to dominate Kuwaiti defense imports 51
4.2. Export Market Dynamics 52
4.2.1. Kuwait’s defense export market is negligible 52

5. Industry Dynamics 53
5.1. Five Forces Analysis 53
5.1.1. Bargaining power of the supplier: high 54
5.1.2. Bargaining power of the buyer: medium to high 54
5.1.3. Barrier to entry: medium 54
5.1.4. Intensity of rivalry: low to medium 54
5.1.5. Threat of substitution: high 54

6. Market Entry Strategy 55
6.1. Market Regulation 55
6.1.1. The Kuwaiti Government does not disclose FDI in the defense industry 55
6.1.2. Offset policy aids the transfer of advanced technologies and integration into the local economy 55
6.2. Market Entry Route 57
6.2.1. Budgeting process 57
6.2.2. Procurement policy and process 57
6.2.3. Foreign military sales (FMS) is the preferred entry route 57
6.2.4. Gulf Co-operation Council (GCC) to form joint Military Command, which could be an alternative entry route for foreign OEM’s 57
6.3. Key Challenges 58
6.3.1. The US and Russia dominate the market, posing challenges to other foreign firms 58
6.3.2. Scarcity of skilled labor 58

7. Competitive Landscape and Strategic Insights 59
7.1. Competitive Landscape Overview 59
7.1.1. The Kuwaiti defense sector is dominated by foreign competitors 59
7.2. Key Foreign Companies 61
7.2.1. Lockheed Martin: Overview 61
7.2.2. Lockheed Martin: Products and services 61
7.2.3. Lockheed Martin: Recent announcements and strategic initiatives 61
7.2.4. Lockheed Martin: Alliances 64
7.2.5. Lockheed Martin: Recent contract wins 65
7.2.6. Lockheed Martin: Financial analysis 66
7.2.7. Raytheon: Overview 68
7.2.8. Raytheon: Major products 68
7.2.9. Raytheon: Recent announcements and strategic initiatives 68
7.2.10. Raytheon: Alliances 71
7.2.11. Raytheon: Contracts 73
7.2.12. Raytheon: Financial analysis 74
7.2.13. Abu Dhabi Ship Building PJSC: Overview 76
7.2.14. Abu Dhabi Ship Building PJSC: Recent announcements and strategic initiatives 76
7.2.15. Abu Dhabi Ship Building PJSC: Contracts 76
7.2.16. Boeing: Overview 77
7.2.17. Boeing: Products 77
7.2.18. Boeing: Recent announcements and strategic initiatives 78
7.2.19. Boeing: Alliances 79
7.2.20. Boeing: Contracts 81
7.2.21. Eurofighter Jagdflugzeug: Overview 82
7.2.22. Eurofighter Jagdflugzeug: Products 82
7.2.23. Eurofighter Jagdflugzeug: Recent Announcements and Strategic Initiatives 82
7.2.24. Eurofighter Jagdflugzeug: Recent contract wins 83
7.2.25. Airbus Helicopters: Overview 84
7.2.26. Airbus Helicopters: Products and services 84
7.2.27. Airbus Helicopters: Recent announcements and strategic initiatives 84
7.2.28. Airbus Helicopters: Alliances 85
7.2.29. Airbus Helicopters: Recent contract wins 85
7.2.30. General Dynamics: Overview 87
7.2.31. General Dynamics: Products 87
7.2.32. General Dynamics: Recent announcements and strategic initiatives 88
7.2.33. General Dynamics: Alliances 90
7.2.34. General Dynamics: Recent contract wins 91
7.2.35. General Dynamics: financial analysis 96

8. Business Environment and Country Risk 98
8.1. Economic Performance 98
8.1.1. GDP per Capita 98
8.1.2. Gross Domestic Product 99
8.1.3. Exports of Goods and Services 100
8.1.4. Imports of Goods and Services 101
8.1.5. Gross National Disposable Income (US$ Billion) 102
8.1.6. LCU per US$ (Period Average) 103
8.1.7. Market Capitalization of Listed Companies 104
8.1.8. Market Capitalization of Listed Companies as a Percentage GDP 105
8.1.9. Total Government Cash Surplus/Deficit as a Percentage of GDP 106
8.1.10. Goods Exports as a Percentage of GDP 107
8.1.11. Goods Imports as a Percentage of GDP 108
8.1.12. Services Imports as a Percentage of GDP 109
8.1.13. Services Exports as a Percentage of GDP 110
8.1.14. Net Foreign Direct Investment 111
8.1.15. Net Foreign Direct Investment as a Percentage of GDP 112
8.1.16. Mining, Manufacturing, Utilities Output 113

9. Appendix 114
9.1. About SDI 114
9.2. Disclaimer 114

List of Tables

Table 1: Kuwait - Army Strength, 2018 17
Table 2: Kuwait - Air Force Strength, 2018 18
Table 3: Kuwait - Navy Strength, 2018 19
Table 4: Kuwaiti - Ongoing Development and Procurement Programs, 2018 20
Table 5: Kuwait - Future Procurement Programs, 2018 21
Table 6: Kuwaiti - Top Defense Procurement Programs by Value (US$ Million), 2018-2023 22
Table 7: Kuwaiti Defense and Security Expenditure (KWD Billion & US$ Billion), 2014-2023 25
Table 8: Kuwaiti GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2014-2023 28
Table 9: Kuwaiti Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 30
Table 10: Kuwaiti Defense Capital Expenditure, (KWD Million & US$ Billion), 2014-2023 32
Table 11: Kuwaiti Per Capita Defense Expenditure (US$), 2014-2023 34
Table 12: Terrorism Index, 2018 37
Table 13: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 40
Table 14: Top Kuwaiti Defense Sectors by Value (US$ Million), 2018-2023 44
Table 15: Offset Regulations in Kuwait 56
Table 16: Competitive Landscape of the Kuwaiti Defense Industry 59
Table 17: Top Defense Suppliers in the Kuwaiti Defense Industry by Value (US$ Million), 2018-2023 60
Table 18: Lockheed Martin - Product Focus 61
Table 19: Lockheed Martin - Alliances 64
Table 20: Lockheed Martin- Recent Contract Wins 65
Table 21: Raytheon - Major Products 68
Table 22: Raytheon - Alliances 71
Table 23: Raytheon - Contracts 73
Table 24: Abu Dhabi Ship Building PJSC - Contracts 76
Table 25: Boeing - Product Focus 77
Table 26: Boeing - Alliances 79
Table 27: Boeing - Contracts 81
Table 28: Eurofighter Jagdflugzeug - Products 82
Table 29: Eurofighter Jagdflugzeug - Recent Contract Wins 83
Table 30: Airbus Helicopters - Products and Services 84
Table 31: Airbus Helicopters - Alliances 85
Table 32: Airbus Helicopters - Contract Wins 85
Table 33: General Dynamics - Product Focus 87
Table 34: General Dynamics - Alliances 90
Table 35: General Dynamics - Recent Contract Wins 91

List of Figures

Figure 1: Kuwaiti Defense and Security Expenditure (KWD Billion), 2014-2023 26
Figure 2: Kuwaiti Defense and Security Expenditure (US$ Billion), 2014-2023 26
Figure 3: Kuwaiti GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2014-2023 29
Figure 4: Kuwaiti Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 31
Figure 5: Kuwaiti Defense Capital Expenditure (KWD Million), 2014-2023 33
Figure 6: Kuwaiti Defense Capital Expenditure (US$ Billion), 2014-2023 33
Figure 7: Kuwaiti Per Capita Defense Expenditure (US$), 2014-2023 34
Figure 8: Terrorism Heat Map, 2018 36
Figure 9: Terrorism Index, 2018 39
Figure 10: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 41
Figure 11: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2018 and 2023 42
Figure 12: Benchmarking with Large Defense Spenders as a Percentage of GDP, 2018 43
Figure 13: Multi-Role Aircraft Market Size (US$ Million), 2018-2023 45
Figure 14: Naval Vessels MRO-Corvettes Market Size (US$ Million), 2018-2023 46
Figure 15: Airborne C4ISR Market Size (US$ Million), 2018-2023 47
Figure 16: Top Kuwaiti Defense Procurements in Terms of Supplier Relationships 48
Figure 17: Kuwaiti Defense Import Trend, 2013-2017 (TIV values) 49
Figure 18: Kuwaiti Defense Imports by Country (%), 2013-2017 50
Figure 19: Kuwaiti Defense Imports by Weapon Category (%), 2013-2017 51
Figure 20: Industry Dynamics - Porter’s Five Forces Analysis 53
Figure 21: Lockheed Martin - Revenue Trend Analysis (US$ billion), 2013-2017 66
Figure 22: Lockheed Martin - Operating Profit Trend Analysis (US$ billion), 2013-2017 67
Figure 23: Lockheed Martin - Net Profit Trend Analysis (US$ billion), 2013-2017 67
Figure 24: Raytheon - Revenue Trend Analysis (US$ billion), 2013-2017 74
Figure 25: Raytheon - Operating Profit Trend Analysis (US$ billion), 2013-2017 75
Figure 26: Raytheon - Net Profit Trend Analysis (US$ billion), 2013-2017 75
Figure 27: General Dynamics - Revenue Trend Analysis (US$ Billion), 2013-2017 96
Figure 28: General Dynamics - Operating Profit Trend Analysis (US$ Billion), 2013-2017 97
Figure 29: General Dynamics - Net Profit Trend Analysis (US$ Billion), 2013-2017 97
Figure 30: Kuwaiti GDP per Capita (US$), 2015-2025 98
Figure 31: Kuwaiti GDP (current US$ bn), 2015-2025 99
Figure 32: Kuwaiti Exports of Goods and Services (Current LCU Bn), 2005-2014 100
Figure 33: Kuwaiti Imports of Goods and Services (Current LCU Bn), 2005-2014 101
Figure 34: Kuwaiti Gross National Disposable Income (US$ Bn), 2005-2013 102
Figure 35: Kuwaiti LCU per US$, 2015-2024 103
Figure 36: Kuwaiti Market Capitalization of Listed Companies (US$ Bn), 2005-2012 104
Figure 37: Kuwaiti Market Capitalization of Listed Companies (% of GDP), 2005-2012 105
Figure 38: Kuwaiti Total Government cash surplus/deficit as a Percentage of GDP, 2005-2012 106
Figure 39: Kuwaiti Goods Exports as a Percentage of GDP, 2005-2014 107
Figure 40: Kuwaiti Goods Imports as a Percentage of GDP, 2005-2014 108
Figure 41: Kuwaiti Services Imports as a Percentage of GDP, 2005-2014 109
Figure 42: Kuwaiti Services Exports as a Percentage of GDP, 2005-2014 110
Figure 43: Kuwaiti Net Foreign Direct Investment (US$ Bn), 2005-2014 111
Figure 44: Kuwaiti Net Foreign Direct Investment as a Percentage of GDP, 2005-2014 112
Figure 45: Mining, Manufacturing, Utilities Output (in LCU Billions), 2005-2014 113

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