Summary
"Future of the Saudi Arabian 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.
This report offers detailed analysis of the Saudi Arabian 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 Saudi Arabian defense industry market size and drivers: detailed analysis of the Saudi Arabian 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 the army, navy, and air force. It also details the key challenges faced by defense market participants within the country
- Porter’s Five Force analysis of the Saudi Arabian 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 Saudi Arabian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
Scope
- Saudi Arabia is one of the largest defense spenders in the world, behind the US, China, and Russia, with a military budget valued at US$56 billion in 2018. The country is the largest market in the Middle East due to its robust economic and financial position, backed by its oil exports. The rising tension with Iran, aggressive procurement strategies, and modernization programs, along with the need to strengthen its indigenous defense industry, are the main factors boosting the country’s military expenditure.
- On a cumulative basis, the country is expected to invest US$326.5 billion for defense purposes, of which US$146 billion is earmarked for capital expenditure to fund defense procurements. The government’s well-defined military modernization plans along with its efforts to supress Houthi insurgency in Yemen as well as its support for rebel factions within Syria, are expected to stimulate the expenditure over the next few years
- The MoD is expected to invest in physical security of vital assets, development of land based C4ISR cpaabilities and multi-role aircraft 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 Saudi Arabian 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 Saudi Arabian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
Companies Mentioned
BAE Systems Plc
Airbus Group
General Dynamics Corporation
Lockheed Martin
Science Applications International Corporation (SAIC)
Sikorsky Aircraft Corporation
Thales SA
Boeing
Northrop Grumman Corporation
Advanced Electronics Company (AEC)
Al Salam Aircraft Company
'
Table of Contents
1. Introduction 9
1.1. What is this Report About? 9
1.2. Definitions 9
1.3. Summary Methodology 11
1.4. About Strategic Defence Intelligence 12
2. Executive Summary 13
3. Market Attractiveness and Emerging Opportunities 16
3.1. Current Market Scenario 17
3.1.1. Primary Threat Perception 17
3.1.2. Military Doctrine & Strategy 19
3.1.3. Military Fleet Size 21
3.1.4. Procurement Programs 26
3.1.5. Ongoing procurement programs 26
3.1.6. Future procurement programs 27
3.1.7. Top Procurement Programs by Value (US$ Million) 2018-2023 29
3.1.8. Social, Political, and Economic Environment & Support for Defense Projects 30
3.1.9. Political & Strategic Alliances 31
3.2. Defense Market Size Historical and Forecast 32
3.2.1. Saudi Arabian defense budget to grow at an estimated CAGR of 4.03% during 2019-2023 32
3.2.2. Strained relationship with Iran, military modernization programs, and the need to develop its indigenous defense sector are key factors driving defense expenditure 35
3.2.3. Saudi Arabian defense expenditure as a percentage of GDP is expected to average 8.1% during the forecast period 37
3.3. Analysis of Defense Budget Allocation 39
3.3.1. Majority of the budget to be allocated for revenue expenditure 39
3.3.2. Capital expenditure is anticipated to record a CAGR of 3.84% during the forecast period 41
3.3.3. Per capita defense expenditure is expected to increase over the forecast period 43
3.4. Homeland Security Market Size and Forecast 45
3.4.1. The homeland security market in Saudi Arabia is expected to grow at a CAGR of 5.65% during the forecast period 45
3.4.2. Border Security and Infrastructure, along with cyber security will be the key factors driving homeland security 48
3.4.3. Saudi Arabia considered at ‘moderate risk’ of terrorist attack 49
3.4.4. Saudi Arabia faces high level of threat from foreign terrorist organizations 50
3.4.5. Saudi Arabia has a terrorism index score of 5.8 52
3.5. Benchmarking with Key Global Markets 53
3.5.1. Saudi Arabia is the third largest defense spender 53
3.5.2. Saudi Arabia is expected to remain among the top five defense spending countries in the world 55
3.5.3. Saudi Arabia spent over 7.5% of its GDP on defense in 2018 56
3.6. Market Opportunities: Key Trends and Drivers 57
3.6.1. Top 10 Defense Market Sectors by Value (US$ Million) - Projections over period 2018-2023 57
3.6.2. Critical Infrastructure Protection (CIP) - Physical Security 58
3.6.3. Land Based C4ISR 59
3.6.4. Fighters & Multi-Role Aircraft 60
4. Defense Procurement Market Dynamics 62
4.1. Import Market Dynamics 63
4.1.1. Defense industry heavily reliant on imports from foreign countries 63
4.1.2. The UK and the US are the key defense suppliers to Saudi Arabia 64
4.1.3. Aircraft to dominate Saudi Arabian defense imports 66
4.2. Export Market Dynamics 68
4.2.1. Saudi Arabia’s defense export market is negligible 68
5. Industry Dynamics 69
5.1. Five Forces Analysis 69
5.2. Bargaining power of supplier: Low to Medium 70
5.3. Bargaining power of buyer: Medium 70
5.4. Barrier to entry: Medium 70
5.5. Intensity of rivalry: Medium to High 70
5.6. Threat of substitution: High 71
6. Market Entry Strategy 72
6.1. Market Regulation 72
6.2. Defense industry remains closed to FDI 72
6.3. Offset Program to aid defense industry and economy 72
6.4. Market Entry Route 74
6.4.1. Budgeting Process 74
6.4.2. Procurement Policy and Process 75
6.4.3. A large number of foreign corporations enter the defense market by winning contracts 76
6.4.4. Collaborations and cooperative agreements provide market entry opportunities 76
6.4.5. GCC - an entry route to Saudi Arabian military market 77
6.5. Key Challenges 78
6.5.1. Bribery, corruption, and political affiliations 78
6.5.2. Scarcity of skilled Labor and Nitaqat law 78
7. Competitive Landscape and Strategic Insights 79
7.1. Competitive Landscape Overview 79
7.1.1. Saudi Arabian defense sector is dominated by foreign competitors 80
7.1.2. Domestic participation in the Saudi Arabian defense industry is limited to two companies 81
7.2. Key Foreign Companies 82
7.2.1. BAE Systems Plc: overview 82
7.2.2. BAE Systems Plc: products and services 82
7.2.3. BAE Systems Plc: recent announcements and strategic initiatives 83
7.2.4. BAE Systems Plc: alliances 85
7.2.5. BAE Systems Plc: recent contract wins 86
7.2.6. BAE Systems Plc: financial analysis 87
7.2.7. Airbus Group: overview 89
7.2.8. Airbus Group: products 89
7.2.9. Airbus Group: recent announcement and strategic initiatives 89
7.2.10. Airbus Group: alliances 90
7.2.11. Airbus Group: recent contract wins 91
7.2.12. Airbus Group: financial analysis 92
7.2.13. General Dynamics Corporation: overview 94
7.2.14. General Dynamics Corporation: products and services 94
7.2.15. General Dynamics Corporation: alliances 96
7.2.16. General Dynamics Corporation: recent contract wins 96
7.2.17. Lockheed Martin: overview 99
7.2.18. Lockheed Martin: products 99
7.2.19. Lockheed Martin: recent announcements and strategic initiatives 99
7.2.20. Lockheed Martin: alliances 101
7.2.21. Lockheed Martin: recent contract wins 102
7.2.22. Lockheed Martin: Financial Analysis 103
7.2.23. Science Applications International Corporation: overview 105
7.2.24. Science Applications International Corporation: products 105
7.2.25. Science Application International Corp. (SAIC): recent contracts and strategic initiatives 105
7.2.26. Science Applications International Corporation: alliances 106
7.2.27. Science Applications International Corporation: recent contract wins 106
7.2.28. Sikorsky Aircraft Corporation: overview 107
7.2.29. Sikorsky Aircraft Corporation: products 107
7.2.30. Sikorsky Aircraft Corporation: recent announcements and strategic initiatives 107
7.2.31. Sikorsky Aircraft Corporation: alliances 108
7.2.32. Sikorsky Aircraft Corporation: recent contract wins 109
7.2.33. Thales: overview 110
7.2.34. Thales: products 110
7.2.35. Thales: recent announcements and strategic initiatives 110
7.2.36. Thales: alliances 111
7.2.37. Thales: recent contract wins 112
7.2.38. Thales: Financial Analysis 112
7.2.39. Boeing: overview 114
7.2.40. Boeing: products and services 114
7.2.41. Boeing: recent announcements and strategic initiatives 114
7.2.42. Boeing: alliances 115
7.2.43. Boeing: recent contract wins 116
7.2.44. Boeing: Financial Analysis 117
7.2.45. Northrop Grumman Corporation: overview 119
7.2.46. Northrop Grumman Corporation: products 119
7.2.47. Northrop Grumman Corporation: recent announcements and strategic initiatives 119
7.2.48. Northrop Grumman Corporation: alliances 121
7.2.49. Northrop Grumman Corporation: recent contract wins 122
7.2.50. Northrop Grumman: Financial Analysis 122
7.3. Key Domestic Companies 124
7.3.1. Advanced Electronics Company: overview 124
7.3.2. Advanced Electronics Company: services 124
7.3.3. Advanced Electronics Company: recent announcements and strategic initiatives 124
7.3.4. Advanced Electronics Company: alliances 125
7.3.5. Advanced Electronics Company: recent contract wins 125
7.3.6. Al Salam Aircraft Company: overview 126
7.3.7. Al Salam Aircraft Company: products and services 126
7.3.8. Al Salam Aircraft Company: alliances 126
7.3.9. Al Salam Aircraft Company: recent contract wins 127
8. Business Environment and Country Risk 128
8.1. Economic Performance 128
8.1.1. GDP per Capita 128
8.1.2. Gross Domestic Product 129
8.1.3. Exports of goods and services LCU Bn 130
8.1.4. Imports of goods and services, LCU Bn 131
8.1.5. Gross National Disposable Income 132
8.1.6. Market Capitalization of listed companies (US$ Billion) 133
8.1.7. Market Capitalization of listed companies (as a % of GDP) 134
8.1.8. Goods Exports as a % of GDP 135
8.1.9. Goods Imports as a % of GDP 136
8.1.10. Services Imports as a % of GDP 137
8.1.11. Services Exports as a % of GDP 138
8.1.12. Net Foreign Direct Investment (current US$ Bn) 139
8.1.13. Net FDI as a % of GDP 140
8.1.14. Mining, Manufacturing, Utilities Output (LCU Bn) 141
9. Appendix 142
9.1. About SDI 142
9.2. Disclaimer 142
List of Tables
Table 1: The Saudi Arabian Land Forces Strength (Including National Guard) 21
Table 2: Saudi Arabian Navy Strength 23
Table 3: Saudi Arabia Air Force Strength 24
Table 4: Saudi Arabian - Ongoing Development and Procurement Programs 26
Table 5: Saudi Arabian - Future Procurement Programs* 27
Table 6: Top Saudi Arabian Defense Procurement Programs by Value (US$ Million) 2018-2023 29
Table 7: Saudi Arabian Defense Expenditure (SAR Billion and US$ Billion), 2014-2023 33
Table 8: Saudi Arabia GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2014-2023 37
Table 9: Saudi Arabia Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 39
Table 10: Saudi Arabia Defense Capital Expenditure (SAR billion and US$ billion), 2014-2023 41
Table 11: Saudi Arabian Per-Capita Defense Expenditure (US$), 2014-2023 43
Table 12: Saudi Arabian Homeland Security Expenditure (SAR billion & US$ billion), 2014-2023 46
Table 13: Terrorism Index, 2018 50
Table 14: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 53
Table 15: Top Saudi Arabian Defense Market Sectors by Value (US$ Million) - 2018-2023 57
Table 16: Saudi Arabia - Offset Guidelines and Agreements 73
Table 17: Saudi Arabian Budget Formation Timetable 74
Table 18: Market Entry by Key Foreign Competitors 76
Table 19: Top Defense Suppliers in The Saudi Arabian Defense Industry - By Value (US$ Million) 2018-2023 79
Table 20: Competitive Landscape of the Saudi Arabian Defense Industry 80
Table 21: BAE Systems Plc. - Product Focus 82
Table 22: BAE Systems Plc. - Alliances 85
Table 23: BAE Systems Plc. - Recent Contract Wins 86
Table 24: Airbus Group - Product Focus 89
Table 25: Airbus Group- Alliances 90
Table 26:Airbus Group- Recent Contract Wins 91
Table 27: General Dynamics Corporation - Product Focus 94
Table 28: General Dynamics Corporation - Alliances 96
Table 29: General Dynamics Corporation - Recent Contract Wins 96
Table 30: Lockheed Martin - Product Focus 99
Table 31: Lockheed Martin - Alliances 101
Table 32: Lockheed Martin - Recent Contract Wins 102
Table 33: Science Application International Corp. (SAIC) - Product Focus 105
Table 34: Science Applications International Corporation - Alliances 106
Table 35: Science Applications International Corporation - Recent Contract Wins 106
Table 36: Sikorsky Aircraft Corporation - Product Focus 107
Table 37: Sikorsky Aircraft Corporation - Alliances 108
Table 38: Sikorsky Aircraft Corporation - Recent Contract Wins 109
Table 39: Thales - Product Focus 110
Table 40: Thales - Alliances 111
Table 41: Thales - Recent Contract Wins 112
Table 42: Boeing - Product Focus 114
Table 43: Boeing - Alliances 115
Table 44: Boeing - Recent Contract Wins 116
Table 45: Northrop Grumman - Product Focus 119
Table 46: Northrop Grumman Corporation - Alliances 121
Table 47: Northrop Grumman Corporation - Recent Contract Wins 122
Table 48: Advanced Electronics Company - Product Focus 124
Table 49: Advanced Electronics Company - Alliances 125
Table 50: Advanced Electronics Company - Recent Contract Wins 125
Table 51: Al Salam Aircraft Company - product focus 126
Table 52: Al Salam Aircraft Company - Alliances 126
Table 53: Al Salam Aircraft Company - Recent Contract Wins 127
List of Figures
Figure 1: Saudi Arabian Defense Expenditure (SAR Billion), 2014-2023 33
Figure 2: Saudi Arabian Defense Expenditure (US$ Billion), 2014-2023 34
Figure 3: Saudi Arabian GDP Growth vs. Defense Expenditures Percentage of GDP Growth, 2014-2023 38
Figure 4:Saudi Arabian Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023 40
Figure 5: Saudi Arabian Capital Expenditure (in SAR Billion), 2014-2023 42
Figure 6: Saudi Arabian Defense Capital Expenditure (US$ Billion), 2014-2023 42
Figure 7: Saudi Arabian Per Capita Defense Expenditure (US$), 2014-2023 44
Figure 8: Saudi Arabian Homeland Security Expenditure (SAR Billion), 2014-2023 46
Figure 9: Saudi Arabian Homeland Security Expenditure (US$ billion), 2014-2023 47
Figure 10: Terrorism Heat Map, 2018 49
Figure 11: Terrorism Index, 2018 52
Figure 12: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023 54
Figure 13: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023 55
Figure 14: Benchmarking with Large Defense Spenders as % of GDP - 2018 56
Figure 15: Critical Infrastructure Protection Market Size (US$ Million), 2018-2023 58
Figure 16: Land Based C4ISR Market Size (US$ Million), 2018-2023 59
Figure 17: Fighters & Multi-Role Aircraft Market Size (US$ Million), 2013-2023 61
Figure 18: Top Saudi Arabian Defense Procurements in Terms of Their Supplier Relationships 62
Figure 19: Saudi Arabian Defense Import Trend, 2013-2017 (TIV values) 63
Figure 20: Saudi Arabian Defense Imports by Country (%), 2013-2017 65
Figure 21: Saudi Arabian Defense Imports by Weapon Category (%), 2013-2017 67
Figure 22: Industry Dynamics - Porter’s Five Forces Analysis 69
Figure 23: Saudi Arabia - Military Chain of Command 75
Figure 24: BAE Systems - Revenue Trend Analysis (GBP Billion), 2013-2017 87
Figure 25: BAE Systems - Operating Profit Trend Analysis (GBP Billion), 2013-2017 87
Figure 26: BAE Systems - Net Profit Trend Analysis (GBP billion), 2013-2017 88
Figure 27: Airbus Group - Revenue Trend Analysis (EUR Billion), 2013-2017 92
Figure 28: Airbus Group - Operating Profit Trend Analysis (EUR Billion), 2013-2017 92
Figure 29: Airbus Group - Net Profit Trend Analysis (EUR Billion), 2013-2017 93
Figure 30: Lockheed Martin - Revenue Trend Analysis (US$ Billion), 2013-2017 103
Figure 31: Lockheed Martin - Operating Profit Trend Analysis (US$ Billion), 2013-2017 104
Figure 32: Lockheed Martin - Net Profit Trend Analysis (US$ Billion), 2013-2017 104
Figure 33: Thales - Revenue Trend Analysis (US$ Billion), 2013-2017 112
Figure 34: Thales - Operating Profit Trend Analysis (US$ Billion), 2013-2017 113
Figure 35: Thales- Net Profit Trend Analysis (US$ Billion), 2013-2017 113
Figure 36: Boeing - Revenue Trend Analysis (US$ Billion), 2013-2017 117
Figure 37: Boeing - Operating Profit Trend Analysis (US$ Billion), 2013-2017 118
Figure 38: Boeing - Net Profit Trend Analysis (US$ Billion), 2013-2017 118
Figure 39: Northrop Grumman - Revenue Trend Analysis (US$ Billion), 2013-2017 122
Figure 40: Northrop Grumman - Operating Profit Trend Analysis (US$ Billion), 2013-2017 123
Figure 41: Northrop Grumman - Net Profit Trend Analysis (US$ Billion), 2013-2017 123
Figure 42: Saudi Arabian GDP per Capita (US$), 2015-2025 128
Figure 43: Saudi Arabian GDP (current US$ bn), 2015-2025 129
Figure 44: Saudi Arabian Exports of goods and services (current LCU Bn), 2005-2014 130
Figure 45: Saudi Arabian Imports of goods and services (current LCU Bn), 2005-2014 131
Figure 46: Saudi Arabian Gross National disposable income (US$ Bn), 2005-2014 132
Figure 47: Saudi Arabian Market Capitalization of listed companies (US$ Billion), 2005-2012 133
Figure 48: Saudi Arabian Market Capitalization of listed companies (as a % of GDP), 2005-2012 134
Figure 49: Saudi Arabian Goods exports as a % of GDP, 2005-2014 135
Figure 50: Saudi Arabian Goods Imports as a % of GDP, 2005-2014 136
Figure 51: Saudi Arabian Services Imports as a % of GDP, 2005-2014 137
Figure 52: Saudi Services Exports as a % of GDP, 2005-2014 138
Figure 53: Saudi Arabian net Foreign Direct Investment (current US$ Bn), 2005-2014 139
Figure 54: Saudi Arabian Net FDI as a % of GDP, 2005-2014 140
Figure 55: Saudi Arabian Mining, Manufacturing, Utilities Output (LCU Bn), 2005-2014 141
