Attractiveness, Competitive Landscape and Forecasts to 2020 - SP.pdf · Future of the Pakistani...
-
Upload
truongngoc -
Category
Documents
-
view
221 -
download
2
Transcript of Attractiveness, Competitive Landscape and Forecasts to 2020 - SP.pdf · Future of the Pakistani...
Report Price: US$ 1250 (Single User)
Future of Pakistani Defense Industry – Market
Attractiveness, Competitive Landscape and
Forecasts to 2020
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
2
Summary
“Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to
2020” report offers the reader detailed analysis of the defense budget over the next five years. Alongside it
offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original
equipment manufacturers) to gain a market share in the Pakistani defense industry.
The report provides detailed analysis of the current industry size and growth expectations during 2016-2020,
including highlights of the key growth stimulators. It also benchmarks the industry against key global markets
and provides detailed understanding of emerging opportunities in specific areas.
Key Findings
Pakistan’s total defense budget increased significantly over 2011-2015, with a CAGR of XX%. The country
invested US$XX billion in the defense sector in 2011, and increased it to US$XX billion in 2015. This trend is
expected to continue during the forecast period, due to the government’s well-defined military procurements
plans, in a bid to fight terrorist attacks. Moreover, the nation’s long-standing territorial dispute with India
indicates that the Pakistani defense strategy will largely correspond with India’s spending and development
programs. The Pakistani defense budget is projected to increase from US$XX billion in 2016, to US$XX
billion in 2020, at a CAGR of XX%. Pakistan is expected to allocate an average of XX% of its GDP to
defense expenditure over the forecast period, despite its relatively small economy. Per capita defense
expenditure is forecasted to increase from US$XX in 2015 to US$XX in 2020.
Key Features and Benefits
The report provides detailed analysis of the Pakistani defense industry during 2011–2020, including the
factors that influence the military expenditure. It provides detailed expectations of growth rates and projected
total expenditure.
It provides the manufacturers with insights on market opportunities along with industry structure and
dynamics prevalent in the country. In addition, the report focuses on the regulations governing the Pakistani
defense industry and the potential market entry strategies with an expert analysis of the competitive
structure.
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
3
1. Market Attractiveness and Emerging Opportunities
1.1. Defense Market Size Historical and Forecast
1.1.1. Pakistani defense expenditure is expected to be US$XX billion over the forecast period
The Pakistani defense budget grew from US$XX billion in 2011 to US$XX billion in 2015, at a CAGR of XX%.
Territorial conflicts with neighboring countries and efforts to counter the increasing threat from terrorist groups
remain the prime commitment of the government, and it is working out a well-defined military hardware
procurement plan to support this aim. Between 2011 and 2015, the government added a range of advanced
equipment to its fleet; including JF-17 Block 1 jets, F-16C/D fighters, Saab 2000 Erieye aircraft, Shaanxi
ZDK-03 aircraft, Z-9C helicopters, Al-Zarrar and Al-Khalid armored vehicles, Zulfiquar class frigate, and
Azmat class patrol boats. With the procurement of advanced weapons expected to continue over the forecast
period, the defense expenditure is expected to reach US$XX billion by 2020, from US$XX billion in 2016, at a
CAGR of XX%.
The following table and figure show the Pakistani defense expenditure during the historic period:
Table 1: Pakistani Defense Expenditure, 2011-2015
Year Defense expenditure (US$ bn)
Defense growth percentage
2011
2012
2013
2014
2015
CAGR 2011-2015
Source: Ministry of Defense, Pakistan and SDI analysis © SDI
Figure 1: Pakistani Defense Expenditure, 2011-2015
Source: Ministry of Defense and SDI analysis © SDI
-20%
-15%
-10%
-5%
0%
5%
0
2
4
6
8
10
12
2011 2012 2013 2014 2015
Gro
wth
rate
(%)
Def
ense
exp
end
itur
e (U
S$
Bn
)
Defense Expenditure (US$ bn) Defense Expenditure Growth Rate
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
4
The following table and figure show projected defense expenditure of the Pakistan over the forecast period:
Table 2: Pakistani Defense Expenditure, 2016-2020
Year Defense expenditure (US$ bn)
Defense growth percentage
2016
2017
2018
2019
2020
CAGR 2016-2020
Source: Ministry of Defense, Pakistan and SDI analysis © SDI
Figure 2: Pakistani Defense Expenditure, 2016-2020
Source: Ministry of Defense and SDI analysis © SDI
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
0
1
2
3
4
5
6
7
8
9
2016 2017 2018 2019 2020
Gro
wth
ra
te (
%)
De
fen
se
ex
pe
nd
itu
re (
US
$ B
n)
Defense Expenditure (US$ bn) Defense Expenditure Growth Rate
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
5
1.2. Analysis of Defense Budget Allocation
1.2.1. Defense capital expenditure is expected to increase at a CAGR of XX% over the forecast period
Pakistan’s capital expenditure share is expected to increase during the forecast period due to internal and
external instability. Consequently, the share of capital expenditure as a percentage of overall defense
expenditure is expected to increase from an average of XX% between 2011 and 2015 to XX% over the
forecast period. Major procurements expected during the forecast period include fighter jets, armored
vehicles, submarines, and naval ships. Research and development projects will also get a significant portion
of the country’s capital expenditure.
The following table and chart display Pakistan’s defense budget share of capital, revenue and other
expenditure during the historic period:
Table 3: Pakistani Defense Budget Split Between Capital and Revenue Expenditure (%),
2011–2015
Year Capital Expenditure Share Revenue Expenditure Share
2011
2012
2013
2014
2015
Source: Ministry of Defense, Pakistan and SDI analysis © SDI
Figure 3: Pakistani Defense Budget Split Between Capital and Revenue Expenditure (%), 2011-2015
Source: Ministry of Defense and SDI analysis © SDI
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015
Defe
nse B
ud
get
Sp
lit
(%)
Capital expenditure (%) Revenue expenditure (%)
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
6
The following table and chart display Pakistani defense budget share of capital and revenue expenditure
over the forecast period:
Table 4: Pakistani Defense Budget Split Between Capital and Revenue Expenditure (%),
2016–2020
Year Capital Expenditure Share Revenue Expenditure Share
2016
2017
2018
2019
2020
Source: Ministry of Defense, Pakistan and SDI analysis © SDI
Figure 4: Pakistani Defense Budget Split Between Capital, Revenue and Other Expenditure (%),
2016-2020
Source: Ministry of Defense and SDI analysis © SDI
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2017 2018 2019 2020
Defe
nse B
ud
get
Sp
lit
(%)
Capital expenditure (%) Revenue expenditure (%)
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
7
2. Industry Dynamics - Porter’s Five Forces Analysis
Figure 4: Industry Dynamics – Porter’s Five Forces Analysis
Source: SDI analysis © SDI
Intensity of Rivalry Bargaining Power of Supplier
Bargaining Power of Buyer
Barrier to Entry
Threat of Substitute
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
8
Report Methodology
SDI’s dedicated research and analysis teams consist of experienced professionals with a background in
industry research and consulting in the defense sector. The following research methodology is followed for all
databases and reports:
Secondary Research
The research process begins with exhaustive secondary research to source reliable qualitative and
quantitative information related to the defense market. The secondary research sources that are typically
referred to include, but are not limited to:
Industry associations
National government documents and statistical databases
Company websites, annual reports, financial reports, broker reports, investor presentations
Industry trade journals and other literature
Internal and external proprietary databases
News articles, press releases, and webcasts specific to the companies operating in the market
Primary Research
SDI conducts hundreds of primary interviews a year with industry participants and commentators in order to
validate its data and analysis. A typical research interview fulfills the following functions:
Provides first-hand information on market size, market trends, growth trends, competitive landscape,
and future outlook
Helps to validate and strengthen secondary research findings
Further develops the analysis team’s expertise and market understanding
Primary research involves e-mail interactions, telephone interviews, and face-to-face interviews for
each market category, division, and sub-division across geographies
The participants who typically take part in such a process include, but are not limited to:
Industry participants: CEOs, VPs, business development managers, market intelligence managers,
and national sales managers
External experts: investment bankers, valuation experts, research analysts, and key opinion leaders
specializing in defense markets
Conventions
Currency conversions are performed on the basis of average annual conversion rate format
calculations
All the values in tables, with the exception of compounded annual growth rate (CAGR) and
compounded annual rate of change (CARC), are displayed to one decimal place; therefore, due to
this rounding method, growth rates may appear inconsistent with absolute values
The forecasted values are projected on the basis of nominal values; the inflation was not taken into account
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
9
TABLE OF CONTENTS
1. Introduction ......................................................................................................................... 11
1.1. What is this Report About? ..........................................................................................................11
1.2. Definitions .....................................................................................................................................11
1.3. Summary Methodology .................................................................................................................13
1.4. SDI Terrorism Index ......................................................................................................................14
1.5. About Strategic Defence Intelligence ..........................................................................................14
2. Executive Summary ............................................................................................................ 15
3. Market Attractiveness and Emerging Opportunities ........................................................ 17
3.1. Defense Market Size Historical and Forecast..............................................................................18
3.1.1. Pakistani annual defense expenditure to reach US$XX billion by 2020 .................................................. 18
3.1.2. Territorial disputes and the war against terrorism expected to drive defense expenditure ...................... 23
3.1.3. The country’s defense expenditure as a percentage of GDP to increase over 2016–2020 ..................... 24
3.2. Analysis of Defense Budget Allocation .......................................................................................26
3.2.1. Capital expenditure share to average XX% during the forecast period ................................................... 26
3.2.2. Budget allocation for the army to be highest over the forecast period ..................................................... 28
3.2.3. Army expenditure to grow at a CAGR of XX% over the forecast period to reach US$XX billion in 2020 .... 30
3.2.4. Air force expenditure to cumulatively value US$XX billion over the forecast period ................................ 34
3.2.5. Naval expenditure is expected to reach US$XX billion by 2020 .............................................................. 38
3.2.6. Per capita defense expenditure expected to increase during the forecast period ................................... 42
3.3. Homeland Security Market Size and Forecast ............................................................................44
3.3.1. Allocation for the police forms the major component of homeland security expenditure ......................... 44
3.3.2. Measures to curb organized crime and cyber-attacks will drive homeland security expenditure ............ 48
3.3.3. Pakistan is at a significant risk from external and internal threats ........................................................... 50
3.4. Benchmarking with Key Global Markets .....................................................................................51
3.4.1. Pakistani defense expenditure expected to increase at a CAGR of XX% over 2016–2020 .................... 51
3.4.2. Pakistani defense expenditure is low compared to other Asian defense spenders ................................. 53
3.4.3. Pakistan’s defense expenditure expected to reach XX% of GDP by 2020 .............................................. 54
3.4.4. Pakistan is one of the most terror prone countries in the world ............................................................... 55
3.5. Market Opportunities: Key Trends and Growth Stimulators ......................................................58
3.5.1. Fighter and Multi-role Aircraft ................................................................................................................... 58
3.5.2. SSK-Diesel Electric Submarine ................................................................................................................ 59
3.5.3. Aviation MRO ............................................................................................................................................ 60
3.5.4. Main Battle Tank (MBT) ............................................................................................................................ 61
4. Defense Procurement Market Dynamics ........................................................................... 62
4.1. Import Market Dynamics ...............................................................................................................63
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
10
4.1.1. Defense imports projected to increase over the forecast period .............................................................. 63
4.1.2. Pakistan and the US were the leading suppliers of arms to Pakistan during 2010–2014 ........................ 64
4.1.3. Aircraft and armored vehicles accounted for the majority of defense imports between 2010 and 2014 . 65
4.2. Export Market Dynamics ..............................................................................................................66
4.2.1. DEPO expected to start defense exports ................................................................................................. 66
5. Industry Dynamics .............................................................................................................. 67
5.1. Five Forces Analysis.....................................................................................................................67
5.1.1. Bargaining power of the supplier: low to medium ..................................................................................... 68
5.1.2. Bargaining power of the buyer: high ......................................................................................................... 68
5.1.3. Barriers to entry: medium to high ............................................................................................................. 68
5.1.4. Intensity of rivalry: low to medium ............................................................................................................ 68
5.1.5. Threat of substitution: low to medium ....................................................................................................... 68
6. Market Entry Strategy ......................................................................................................... 69
6.1. Market Regulation .........................................................................................................................69
6.1.1. Defense procurements assigned to DGDP and DGMP ........................................................................... 69
6.2. Market Entry Route .......................................................................................................................71
6.2.1. Foreign firms enter the Pakistani defense industry through Foreign Military Sales (FMS) ...................... 71
6.2.2. Collaborations and joint ventures – a viable market entry route .............................................................. 71
6.3. Key Challenges .............................................................................................................................72
6.3.1. Corruption in the Pakistani defense sector hinders its growth ................................................................. 72
6.3.2. An unstable political system coupled with internal instability discourages foreign participation .............. 72
7. Competitive Landscape and Strategic Insights ................................................................ 73
7.1. Competitive Landscape Overview ...............................................................................................73
7.1.1. Foreign suppliers manufacture defense systems overseas and deliver to Pakistan ............................... 73
7.1.2. Growing domestic defense industry is predominantly state run ............................................................... 73
7.2. Key Domestic Companies ............................................................................................................74
7.2.1. Karachi Shipyard & Engineering Works: overview ................................................................................... 74
7.2.2. Karachi Shipyard & Engineering Works: products and services .............................................................. 74
7.2.3. Karachi Shipyard & Engineering Works: recent announcements and strategic initiatives ....................... 76
7.2.4. Karachi Shipyard & Engineering Works: alliances ................................................................................... 76
7.2.5. Karachi Shipyard & Engineering Works: recent contract wins ................................................................. 76
7.2.6. Pakistan Aeronautical Complex: overview ............................................................................................... 77
7.2.7. Pakistan Aeronautical Complex: products and services .......................................................................... 77
7.2.8. Pakistan Aeronautical Complex: recent announcements and strategic initiatives ................................... 77
7.2.9. Pakistan Aeronautical Complex: alliances ................................................................................................ 78
7.2.10. Pakistan Aeronautical Complex: recent contract wins ............................................................................. 78
7.2.11. Pakistan Ordnance Factories: overview ................................................................................................... 79
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
11
7.2.12. Pakistan Ordnance Factories: products and services .............................................................................. 79
7.2.13. Pakistan Ordnance Factories: recent announcements and strategic initiatives ....................................... 80
7.2.14. Pakistan Ordnance Factories: alliances ................................................................................................... 81
7.2.15. Pakistan Ordnance Factories: recent contract wins ................................................................................. 81
7.2.16. Pakistan Space and Upper Atmosphere Research Commission: overview ............................................. 82
7.2.17. Pakistan Space and Upper Atmosphere Research Commission: products and services ........................ 82
7.2.18. Pakistan Space and Upper Atmosphere Research Commission: recent announcements and strategic
initiatives ............................................................................................................................................................... 83
7.2.19. Pakistan Space and Upper Atmosphere Research Commission: alliances ............................................. 84
7.2.20. Pakistan Space and Upper Atmosphere Research Commission: recent contract wins ........................... 84
7.2.21. Heavy Industries Taxila: overview ............................................................................................................ 85
7.2.22. Heavy Industries Taxila: products and services ....................................................................................... 85
7.2.23. Heavy Industries Taxila: recent announcements and strategic initiatives ................................................ 86
7.2.24. Heavy Industries Taxila: alliances ............................................................................................................ 86
7.2.25. Heavy Industries Taxila: recent contract wins .......................................................................................... 87
7.2.26. The Heavy Mechanical Complex: overview .............................................................................................. 88
7.2.27. The Heavy Mechanical Complex: products and services ......................................................................... 88
7.2.28. The Heavy Mechanical Complex: recent announcements and strategic initiatives ................................. 88
7.2.29. The Heavy Mechanical Complex: alliances .............................................................................................. 89
7.2.30. SATUMA: overview ................................................................................................................................... 90
7.2.31. SATUMA: products and services .............................................................................................................. 90
7.2.32. SATUMA: recent announcements and strategic initiatives ...................................................................... 90
7.2.33. SATUMA: recent contract wins ................................................................................................................. 90
7.3. Key Foreign Companies ...............................................................................................................91
7.3.1. Boeing: overview ...................................................................................................................................... 91
7.3.2. Boeing: products and services ................................................................................................................. 91
7.3.3. Boeing: recent announcements and strategic initiatives .......................................................................... 91
7.3.4. Boeing: recent contract wins .................................................................................................................... 92
7.3.5. Raytheon: overview .................................................................................................................................. 93
7.3.6. Raytheon: products and services ............................................................................................................. 93
7.3.7. Raytheon: recent announcements and strategic initiatives ...................................................................... 93
7.3.8. Raytheon: recent contract wins ................................................................................................................ 93
7.3.9. Lockheed Martin: overview ....................................................................................................................... 94
7.3.10. Lockheed Martin: products and services .................................................................................................. 94
7.3.11. Lockheed Martin: recent announcements and strategic initiatives ........................................................... 94
7.3.12. Lockheed Martin: alliances ....................................................................................................................... 95
7.3.13. Lockheed Martin: recent contract wins ..................................................................................................... 96
7.3.14. Chengdu Aircraft Industry Group: overview.............................................................................................. 97
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
12
7.3.15. Chengdu Aircraft Industry Group: products and services ......................................................................... 97
7.3.16. Chengdu Aircraft Industry Group: recent announcements and strategic initiatives ................................. 97
7.3.17. Chengdu Aircraft Industry Group: alliances .............................................................................................. 98
7.3.18. Chengdu Aircraft Industry Group: recent contract wins ............................................................................ 98
8. Business Environment and Country Risk ......................................................................... 99
8.1. Demographics & Social Statistics ................................................................................................99
8.1.1. Total Rural Population .............................................................................................................................. 99
8.1.2. Total Urban Population ........................................................................................................................... 100
8.1.3. Number of Households (In mn) .............................................................................................................. 101
8.2. Economic Performance .............................................................................................................. 102
8.2.1. GDP Per Capita ...................................................................................................................................... 102
8.2.2. GDP, Current Prices ............................................................................................................................... 103
8.2.3. Consumer Price Index ............................................................................................................................ 104
8.2.4. Local Currency Unit per US Dollar ......................................................................................................... 105
8.2.5. Local Currency Unit per Euro ................................................................................................................. 106
8.2.6. Market Capitalization of Listed Companies ............................................................................................ 107
8.2.7. Market Capitalization of Listed Companies (% of GDP) ......................................................................... 108
8.2.8. Government Cash Surplus/Deficit .......................................................................................................... 109
8.2.9. Government Cash Surplus/Deficit as % of GDP .................................................................................... 110
8.2.10. Goods exports as % of GDP .................................................................................................................. 111
8.2.11. Goods imports as % of GDP .................................................................................................................. 112
8.2.12. Goods Trade Surplus/Deficit as % of GDP............................................................................................. 113
8.2.13. Service Imports as % of GDP ................................................................................................................. 114
8.2.14. Service Exports as % of GDP ................................................................................................................. 115
8.2.15. Service Trade Surplus/Deficit as % of GDP ........................................................................................... 116
8.2.16. Foreign Direct Investment....................................................................................................................... 117
8.2.17. Net foreign direct investment as % of GDP ............................................................................................ 118
8.2.18. International reserves, including gold ..................................................................................................... 119
8.2.19. External Debt .......................................................................................................................................... 120
8.2.20. External debt as % of GDP ..................................................................................................................... 121
8.3. Energy and Utilities ..................................................................................................................... 122
8.3.1. Conventional Thermal Electricity Net Generation .................................................................................. 122
8.3.2. Hydroelectricity Net Generation .............................................................................................................. 123
8.3.3. Nuclear Electricity Net Generation ......................................................................................................... 124
8.3.4. Conventional Thermal Electricity Installed Capacity .............................................................................. 125
8.3.5. Proved Natural Gas Reserves ................................................................................................................ 126
8.3.6. Petroleum Consumption ......................................................................................................................... 127
8.3.7. Crude Oil Proved Reserves .................................................................................................................... 128
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
13
8.4. Infrastructure ............................................................................................................................... 129
8.4.1. Rail Lines ................................................................................................................................................ 129
8.4.2. Air transport, freight ................................................................................................................................ 130
8.5. Minerals ....................................................................................................................................... 131
8.5.1. Mining, Manufacturing, Utilities Output ................................................................................................... 131
8.6. Technology .................................................................................................................................. 132
8.6.1. Patents Granted ...................................................................................................................................... 132
8.7. Telecommunication .................................................................................................................... 133
8.7.1. Telephone Lines ..................................................................................................................................... 133
8.7.2. Telephone Lines Penetration Rate ......................................................................................................... 134
9. Appendix ............................................................................................................................ 135
9.1. About SDI ..................................................................................................................................... 135
9.2. Disclaimer .................................................................................................................................... 135
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
14
LIST OF FIGURES
Figure 1: Pakistani Defense Expenditure (US$ bn), 2011–2015 ......................................................................................................................... 19 Figure 2: Pakistani Defense Expenditure (US$ bn), 2016–2020 ......................................................................................................................... 20 Figure 3: Pakistani Defense Expenditure (in PKR Billion), 2011–2015 ................................................................................................................ 21 Figure 4: Pakistani Defense Expenditure (in PKR Billion), 2016–2020 ................................................................................................................ 22 Figure 5: Pakistani GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2011–2015 ......... 24 Figure 6: Pakistani GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016–2020 ......... 25 Figure 7:Pakistani Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015 ............................................................... 26 Figure 8: Pakistani Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020 .............................................................. 27 Figure 9: Pakistani Defense Expenditure Breakdown (%), 2011–2015 ............................................................................................................... 28 Figure 10: Pakistani Defense Capital Expenditure Breakdown (%), 2016–2020 .................................................................................................. 29 Figure 11: Pakistani Defense Expenditure for Army (US$ billion), 2011–2015 .................................................................................................... 30 Figure 12: Pakistani Defense Expenditure for Army (US$ billion), 2016–2020 .................................................................................................... 31 Figure 13: Pakistani Defense Expenditure for Army (in PKR bn), 2011–2015 .................................................................................................... 32 Figure 14: Pakistani Defense Expenditure for Army (in PKR bn), 2016–2020 .................................................................................................... 33 Figure 15: Pakistani Defense Expenditure for Air Force (US$ billion), 2011–2015 .............................................................................................. 34 Figure 16: Pakistani Defense Expenditure for Air Force (US$ billion), 2016–2020 .............................................................................................. 35 Figure 17: Pakistani Defense Expenditure for Air Force (PKR billion), 2011–2015 .............................................................................................. 36 Figure 18: Pakistani Defense Expenditure for Air Force (PKR billion), 2016–2020 .............................................................................................. 37 Figure 19: Pakistani Defense Expenditure for the Navy (US$ billion), 2011–2015............................................................................................... 38 Figure 20: Pakistani Defense Expenditure for the Navy (US$ billion), 2016–2020............................................................................................... 39 Figure 21: Pakistani Defense Expenditure for the Navy (PKR billion), 2011–2015 .............................................................................................. 40 Figure 22: Pakistani Defense Expenditure for the Navy (PKR billion), 2016–2020 .............................................................................................. 41 Figure 23: Pakistani Per Capita Defense Expenditure (US$), 2011–2015 ........................................................................................................... 42 Figure 24: Pakistani Per Capita Defense Expenditure (US$), 2016–2020 ........................................................................................................... 43 Figure 25: Pakistani Homeland Security Budget (US$ Billion), 2011–2015 ......................................................................................................... 44 Figure 26: Pakistani Homeland Security Budget (US$ Billion), 2016–2020 ......................................................................................................... 45 Figure 27: Pakistani Homeland Security Budget (PKR billion), 2011–2015 ......................................................................................................... 46 Figure 28: Pakistani Homeland Security Budget (PKR billion), 2016–2020 ......................................................................................................... 47 Figure 29: SDI Terrorism Heat Map, 2015 .......................................................................................................................................................... 50 Figure 30: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020 .......................................................................................................... 52 Figure 31: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2015 and 2020 ........................................................... 53 Figure 32: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2015 ..................................................................... 54 Figure 33: SDI Terrorism Index, 2015 ................................................................................................................................................................. 55 Figure 34: Fighter and Multi-role Aircraft Market Size (US$ Billion), 2015–2025 ................................................................................................. 58 Figure 35: SSK-Diesel Electric Submarine Market Size (US$ Million), 2015–2025.............................................................................................. 59 Figure 36: Aviation MRO Market Size (US$ Million), 2015–2025 ........................................................................................................................ 60 Figure 37: Main Battle Tank Market Size (US$ Million), 2014–2024.................................................................................................................... 61 Figure 38: Pakistani Defense Import Trend, 2010–2014 (TIV values) ................................................................................................................. 63 Figure 39: Pakistani Defense Imports by Country (%), 2010–2014 ..................................................................................................................... 64 Figure 40: Pakistani Defense Imports by Category (%), 2010–2014 ................................................................................................................... 65 Figure 41: Industry Dynamics Porter’s Five Forces Analysis ............................................................................................................................... 67 Figure 42: Pakistan’s Rural Population (In Millions), 2016–2025 ......................................................................................................................... 99 Figure 43: Pakistan’s Urban Population (In Millions), 2016–2025 ......................................................................................................................100 Figure 44: Pakistan’s Number of Households (In mn), 2008–2017.....................................................................................................................101 Figure 45: Pakistan’s GDP Per Capita, 2011–2020 ...........................................................................................................................................102 Figure 46: Pakistan’s GDP, Current Prices (In US$ Billions), 2011–2020 ..........................................................................................................103 Figure 47: Pakistan’s Consumer Price Index, 2008–2017 ..................................................................................................................................104 Figure 48: Local Currency per US$- Exchange Rate , 2008–2017 .....................................................................................................................105 Figure 49: Local Currency per Euro, 2008–2017 ...............................................................................................................................................106 Figure 50: Pakistan’s Market Capitalization of Listed Companies (US$ Billion), 2003–2012 ..............................................................................107 Figure 51: Pakistan’s Market Capitalization of Listed Companies (% of GDP), 2002–2011 ................................................................................108 Figure 52: Pakistan’s Government Cash Surplus/Deficit (LCU Billion), 2002–2011 ............................................................................................109 Figure 53: Pakistan’s Government Cash Surplus/Deficit as % of GDP, 2002–2011 ...........................................................................................110 Figure 54: Pakistan’s Goods Exports as % of GDP, 2002–2011 ........................................................................................................................111 Figure 55: Pakistan’s Goods Imports as % of GDP, 2002–2011 ........................................................................................................................112
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
15
Figure 56: Pakistan’s Goods Trade Surplus/Deficit as % of GDP, 2002–2011 ...................................................................................................113 Figure 57: Pakistan’s Service Imports as % of GDP, 2002–2011 .......................................................................................................................114 Figure 58: Pakistan’s Service Exports as % of GDP, 2002–2011 .......................................................................................................................115 Figure 59: Pakistan’s Service Trade Surplus/Deficit as % of GDP, 2002–2011 ..................................................................................................116 Figure 60: Pakistan’s Foreign Direct Investment (US$ Billion), 2002–2011 ........................................................................................................117 Figure 61: Pakistan’s Net foreign direct investment as % of GDP, 2002–2011 ...................................................................................................118 Figure 62: Pakistan’s International reserves, including gold (US$ Billion), 2002–2011 .......................................................................................119 Figure 63: Pakistan’s External Debt (US$ Billion),2001–2010 ............................................................................................................................120 Figure 64: Pakistan’s External Debt as % GDP, 2001–2010 ..............................................................................................................................121 Figure 65: Pakistan’s Conventional Thermal Electricity Net Generation (Billion Kilowatt hours), 2003–2011 ......................................................122 Figure 66: Pakistan’s Hydroelectricity Net Generation (Billion Kilowatt hours), 2002–2011 ................................................................................123 Figure 67: Pakistan’s Nuclear Electricity Net Generation (Billion Kilowatt hours), 2003–2012 ............................................................................124 Figure 68: Pakistan’s Conventional Thermal Electricity Installed Capacity (Million Kilowatt hours), 2001–2010 .................................................125 Figure 69: Pakistan’s Proved Natural Gas Reserves (Trillion Cubic Feet), 2004–2013 ......................................................................................126 Figure 70: Pakistan’s Petroleum Consumption (Thousand Barrels Per Day), 2003–2012 ..................................................................................127 Figure 71: Pakistan’s Crude Oil Distillation Capacity (Billion Barrels), 2004–2013 .............................................................................................128 Figure 72: Pakistan’s Rail Lines (kms), 2002–2011 ...........................................................................................................................................129 Figure 73: Pakistan’s Air transport freight (million ton-km), 2002–2011 ..............................................................................................................130 Figure 74: Pakistan’s Mining, Manufacturing, Utilities Output (USD Billion), 2002–2011 ....................................................................................131 Figure 75: Pakistan’s Patents Granted, 2003–2012 ...........................................................................................................................................132 Figure 76: Pakistan’s Telephone Lines (In Million), 2003–2012 .........................................................................................................................133 Figure 77: Pakistan’s Telephone Lines Penetration Rate (Per 100 People), 2003–2012 ....................................................................................134
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
16
LIST OF TABLES Table 1: Pakistani Defense Expenditure (US$ bn), 2011–2015 ........................................................................................................................... 19 Table 2: Pakistani Defense Expenditure (US$ bn), 2016–2020 ........................................................................................................................... 20 Table 3: Pakistani Defense Expenditure (in PKR Billion), 2011–2015 ................................................................................................................. 21 Table 4: Pakistani Defense Expenditure (in PKR Billion), 2016–2020 ................................................................................................................. 22 Table 5: Pakistani GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2011–2015 .......... 24 Table 6: Pakistani GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016–2020 .......... 25 Table 7: Pakistani Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015 ............................................................... 26 Table 8: Pakistani Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020 ............................................................... 27 Table 9: Pakistani Defense Capital Expenditure Breakdown (%), 2011–2015 ..................................................................................................... 28 Table 10: Pakistani Defense Capital Expenditure Breakdown (%), 2016–2020 ................................................................................................... 29 Table 11: Pakistani Defense Expenditure for Army (US$ billion), 2011–2015 ..................................................................................................... 30 Table 12: Pakistani Defense Expenditure for Army (US$ billion), 2016–2020 ..................................................................................................... 31 Table 13: Pakistani Defense Expenditure for Army (in PKR bn), 2011–2015 ..................................................................................................... 32 Table 14: Pakistani Defense Expenditure for Army (in PKR bn), 2016–2020 ..................................................................................................... 33 Table 15: Pakistani Defense Expenditure for Air Force (US$ billion), 2011–2015 ............................................................................................... 34 Table 16: Pakistani Defense Expenditure for Air Force (US$ billion), 2016–2020 ............................................................................................... 35 Table 17: Pakistani Defense Expenditure for Air Force (PKR billion), 2011–2015 ............................................................................................... 36 Table 18: Pakistani Defense Expenditure for Air Force (PKR billion), 2016–2020 ............................................................................................... 37 Table 19: Pakistani Defense Expenditure for the Navy (US$ billion), 2011–2015 ................................................................................................ 38 Table 20: Pakistani Defense Expenditure for the Navy (US$ billion), 2016–2020 ................................................................................................ 39 Table 21: Pakistani Defense Expenditure for the Navy (PKR billion), 2011–2015 ............................................................................................... 40 Table 22: Pakistani Defense Expenditure for the Navy (PKR billion), 2016–2020 ............................................................................................... 41 Table 23: Pakistani Per Capita Defense Expenditure (US$), 2011–2015 ............................................................................................................ 42 Table 24: Pakistani Per Capita Defense Expenditure (US$), 2016–2020 ............................................................................................................ 43 Table 25: Pakistani Homeland Security Budget (US$ Billion), 2011–2015 .......................................................................................................... 44 Table 26: Pakistani Homeland Security Budget (US$ Billion), 2016–2020 .......................................................................................................... 45 Table 27: Pakistani Homeland Security Budget (PKR billion), 2011–2015 .......................................................................................................... 46 Table 28: Pakistani Homeland Security Budget (PKR billion), 2016–2020 .......................................................................................................... 47 Table 29: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020............................................................................................................ 51 Table 30: SDI Terrorism Index ............................................................................................................................................................................ 56 Table 31: FMS route followed by Foreign Companies ......................................................................................................................................... 71 Table 32: Key Foreign Companies and Operations in the Pakistani Defense Industry ........................................................................................ 73 Table 33: Karachi Shipyard & Engineering Works – Product Focus .................................................................................................................... 74 Table 34: Karachi Shipyard & Engineering Works - Alliances ............................................................................................................................. 76 Table 35: Karachi Shipyard & Engineering Works - Recent Contract Wins ......................................................................................................... 76 Table 36: Pakistan Aeronautical Complex – Product Focus ................................................................................................................................ 77 Table 37: Pakistan Aeronautical Complex - Alliances ......................................................................................................................................... 78 Table 38: Pakistan Aeronautical Complex - Recent Contract Wins ..................................................................................................................... 78 Table 39: Pakistan Ordnance Factories – Product Focus ................................................................................................................................... 79 Table 40: Pakistan Ordnance Factories - Alliances ............................................................................................................................................. 81 Table 41: Pakistan Ordnance Factories – Recent Contract Wins ........................................................................................................................ 81 Table 42: Pakistan Space and Upper Atmosphere Research Commission – Product Focus ............................................................................... 82 Table 43: Pakistan Space and Upper Atmosphere Research Commission - Alliances ........................................................................................ 84 Table 44: Pakistan Space and Upper Atmosphere Research Commission – recent contract wins ...................................................................... 84 Table 45: Heavy Industries Taxila – product focus .............................................................................................................................................. 85 Table 46: Heavy Industries Taxila – alliances ..................................................................................................................................................... 86 Table 47: Heavy Industries Taxila – recent contract wins .................................................................................................................................... 87 Table 48: The Heavy Mechanical Complex – product focus ................................................................................................................................ 88 Table 49: The Heavy Mechanical Complex – alliances ....................................................................................................................................... 89 Table 50: SATUMA – product focus .................................................................................................................................................................... 90 Table 51: SATUMA – recent contract wins ......................................................................................................................................................... 90 Table 52: Boeing – Product Focus ...................................................................................................................................................................... 91 Table 53: Boeing – Recent Contract Wins .......................................................................................................................................................... 92 Table 54: Raytheon – Product Focus .................................................................................................................................................................. 93 Table 55: Raytheon – Recent Contract Wins ...................................................................................................................................................... 93 Table 56: Lockheed Martin – Product Focus ....................................................................................................................................................... 94
Future of the Pakistani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
17
Table 57: Lockheed Martin – alliances ................................................................................................................................................................ 95 Table 58: Lockheed Martin – Recent Contract Wins ........................................................................................................................................... 96 Table 59: Chengdu Aircraft Industry Group – Product Focus .............................................................................................................................. 97 Table 60: Chengdu Aircraft Industry Group - Alliances ....................................................................................................................................... 98 Table 61: Chengdu Aircraft Industry Group – Recent Contract Wins ................................................................................................................... 98