Future of the Netherlands’ Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Future of the Netherlands’ Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Summary

Future of the Netherlands’ Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022, 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 Netherlands 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 Netherlands defense industry market size and drivers: detailed analysis of the Netherlands defense industry during 2018-2022, 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. It also details the key challenges faced by defense market participants within the country
- Porter’s Five Force analysis of the Netherlands 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 Netherlands defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Scope

- The Netherlands is the fifth-largest economy in the Eurozone and has been battling to overcome the effects of the debt crisis through defense budget cuts. During the historic period (2013-2017), expenditure decreased at a compound annual growth rate (CAGR) of -2.71%, from US$10.3 billion in 2013 to US$9.3 billion in 2017. Although the economy is likely to improve, the country’s defense budget will be capped at an average of 1.2% of GDP over the forecast period (2018-2022).After falling to US$11.0 million in 2014, defense imports recovered to US$118 million in 2016 and are set to increase over the forecast period due to the procurement of F-35s, armored vehicles, and modernization programs for naval vessels. Historically, US defense companies have been the country’s main arms supplier, however Romania, Italy, Germany and Sweden are being used as import sources for aircraft, naval vessels, armored vehicles, missiles, sensors, and engines.
- During the historic period, revenue expenditure accounted for 82.7% of the Netherland’s total defense expenditure, while the remaining 17.3% was spent on procuring equipment and services. The implementation of budget cuts and reform measures, such as the reduction of troop size, by the MoD adversely affected capital expenditure. However, due to an increasing level of threat from Russia, NATO member states are expected to gradually enhance their defense spending. The share of capital expenditure will reach 17.5% over the forecast period, with the majority allotted to the F-35 procurement program, AIM-9X-2 Sidewinder Block II all-up-round missiles, mortars, surveillance radar, MQ-9 Reaper UAVs, and the Walrus class submarine replacement project.
- The MoD is expected to invest in fighters and Multi-role aircraft, fighters & multi-role aircraft MRO and conventional submarines.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Netherlands 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 Netherlands defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts

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 14
3.1. Current Market Scenario 15
3.1.1. Primary threat perception 15
3.1.2. Military Doctrine & Strategy 16
3.1.3. Military Fleet Size 20
3.1.4. Procurement Programs 23
3.1.5. Ongoing procurement programs 23
3.1.6. Future procurement programs 24
3.1.7. Social, Political and Economic Environment & Support for Defense Projects 25
3.1.8. Political & Strategic Alliances 26
3.2. Defense Market Size Historical and Forecast 27
3.2.1. Netherland defense budget to post at a forecast-period CAGR of 3.38% 27
3.2.2. Military modernization, and commitment levels to NATO, UN and EU stipulations 29
3.2.3. Netherlands defense expenditure as a percentage of GDP expected to decrease 30
3.3. Analysis of Defense Budget Allocation 32
3.3.1. Share of Capital Expenditure expected to average 17.5% over forecast period 32
3.3.2. Capital expenditure expected to increase at a CAGR of 3.33% over 2018-2022 34
3.3.3. Allocation for peacekeeping operations to decline 36
3.3.4. Army expenditure to grow at a CAGR of 3.31% over the forecast period to reach US$1.5 Billion in 2022 38
3.3.5. Air force expenditure to post forecast-period CAGR of 2.94% to value US$852.7 million in 2022 40
3.3.6. Navy expenditure to post forecast-period CAGR of 2.83% to reach US$915.5 million in 2022 42
3.3.7. Support command expenditure to post forecast-period CAGR of 3.81% to reach US$1.3 billion in 2022 44
3.3.8. Per capita defense expenditure set to increase 46
3.4. Homeland Security Market Size and Forecast 48
3.4.1. Homeland security market is expected register a CAGR of 4.31% over the forecast period 48
3.4.2. Counter measures for drug trafficking and terrorism to drive homeland security expenditure 51
3.4.3. Netherlands falls under the “some risk of terrorism†category 52
3.4.4. The Netherlands faces some level of threat from foreign terrorist organizations 53
3.4.5. Netherlands has a terrorism index score of 0.9 55
3.5. Benchmarking with Key Global Markets 56
3.5.1. Netherlands defense budget expected to be marginally increase over the forecast period 56
3.5.2. Netherlands military budget is limited compared to other countries 58
3.5.3. The Netherlands’ expected to spend an average of 1.1% of GDP on defense over the forecast period 59
3.6. Market Opportunities: Key Trends and Growth Stimulators 60
3.6.1. Fighters and multi-role aircraft 60
3.6.2. Fighters and multi-role aircraft-MRO 61
3.6.3. Diesel electric submarine 62
4. Defense Procurement Market Dynamics 63
4.1. Import Market Dynamics 64
4.1.1. Defense imports are expected to increase slightly over the forecast period 64
4.1.2. US was the leading supplier of arms to Netherlands during 2012-2016 65
4.1.3. Aircraft and armored vehicles dominate military hardware imports 66
4.2. Export Market Dynamics 67
4.2.1. Arms exports to recover during the forecast period 67
4.2.2. Netherlands arms exports expected to increase 68
4.2.3. Sensors and ships are the main exported defense products 69
5. Industry Dynamics 70
5.1. Five Forces Analysis 70
5.1.1. Bargaining power of supplier: medium to low 71
5.1.2. Bargaining power of buyer: medium 71
5.1.3. Barrier to entry: medium 71
5.1.4. Intensity of rivalry: high 71
5.1.5. Threat of substitution: low to high 71
6. Market Entry Strategy 72
6.1. Market Regulation 72
6.1.1. Offset policy aids development of domestic defense industry and research activities 72
6.1.2. FDI in defense sector is unrestricted without review 74
6.2. Market Entry Route 75
6.2.1. Budgeting Process 75
6.2.2. Procurement Policy & Process 76
6.2.3. Acquisition of domestic companies is effective market entry route for foreign firms 77
6.2.4. Collaborations provide market entry opportunities 77
6.2.5. Joint ventures, partnerships and subcontracting offer alternative entry strategies 77
6.2.6. Joint R&D programs provide an effective strategy to gain market access 78
6.3. Key Challenges 79
6.3.1. Inadequate government support for defense industry 79
6.3.2. Defense procurements affected by European debt crisis 79
7. Competitive Landscape and Strategic Insights 80
7.1. Competitive Landscape Overview 80
7.2. Key Domestic Companies 82
7.2.1. Fokker Technologies: overview 82
7.2.2. Fokker Technologies: products and services 83
7.2.3. Fokker Technologies: recent announcements and strategic initiatives 83
7.2.4. Fokker Technologies: alliances 84
7.2.5. Fokker Technologies: recent contract wins 86
7.2.6. DamenSchelde Naval Shipbuilding: overview 87
7.2.7. DamenSchelde Naval Shipbuilding: products and services 87
7.2.8. DamenSchelde Naval Shipbuilding: recent announcements and strategic initiatives 87
7.2.9. DamenSchelde Naval Shipbuilding: alliances 89
7.2.10. DamenSchelde Naval Shipbuilding: recent contract wins 89
7.2.11. TNO Defense: overview 91
7.2.12. TNO Defense: products and services 91
7.2.13. TNO Defense: recent announcements and strategic initiatives 92
7.2.14. TNO Defense: alliances 93
7.2.15. TNO Defense: recent contract wins 93
7.2.16. Thales Nederland: overview 94
7.2.17. Thales Nederland: products and services 94
7.2.18. Thales Nederland: recent announcements and strategic initiatives 96
7.2.19. Thales Nederland: alliances 96
7.2.20. Thales Nederland: recent contract wins 97
7.2.21. Fokker Aerostructures: overview 99
7.2.22. Fokker Aerostructures: services 99
7.2.23. Fokker Aerostructures: recent announcements and strategic initiatives 99
7.2.24. Fokker Aerostructures: alliances 100
7.2.25. Fokker Aerostructures: recent contract wins 100
7.2.26. RH Marine Group: overview 101
7.2.27. RH Marine Group: products and services 101
7.2.28. RH Marine Group: recent announcements and strategic initiatives 101
7.2.29. RH Marine Group: alliances 101
7.2.30. RH Marine Group: recent contract wins 102
7.2.31. Lockheed Martin: overview 104
7.2.32. Lockheed Martin: products and services 104
7.2.33. Lockheed Martin: recent announcements and strategic initiatives 104
7.2.34. Lockheed Martin: alliances 105
7.2.35. Lockheed Martin: recent contract wins 106
8. Business Environment and Country Risk 107
8.1. Economic Performance 107
8.1.1. Gross Domestic per Capita 107
8.1.2. Gross Domestic Product, current US$ 108
8.1.3. Exports of Goods and Services 109
8.1.4. Imports of Goods and Services 110
8.1.5. Gross National Disposable Income 111
8.1.6. Local Currency Unit per US$ 112
8.1.7. Market Capitalization of Listed Companies 113
8.1.8. Market Capitalization of Listed Companies as a % of GDP 114
8.1.9. Government Cash Surplus/Deficit 115
8.1.10. Goods Exports as a % of GDP 116
8.1.11. Goods Imports as a % of GDP 117
8.1.12. Services Imports as a % of GDP 118
8.1.13. Services Exports as a % of GDP 119
8.1.14. Net Foreign direct investment, (BoP, current US$ Bn) 120
8.1.15. Net FDI as a % of GDP 121
8.1.16. Mining, Manufacturing, Utilities Output 122
9. Appendix 123
9.1. About SDI 123
9.2. Disclaimer 123

List Of Tables

Table 1: The Deployment of Netherlands Armed Forces vs Defense Tasks 16
Table 2: The Netherlands Army Strength 20
Table 3: The Netherlands Navy Strength 21
Table 4: The Netherlands Air Force Strength 22
Table 5: The Netherlands - Ongoing Procurement Programs 23
Table 6: The Netherlands - Future Procurement Programs 24
Table 7: Netherlands Defense Expenditure (EUR Billion and US$ Billion), 2013-2022 27
Table 8: The Netherlands - GDP Growth vs Defense Expenditure as a Percentage of GDP, 2013-2022 30
Table 9: The Netherlands - Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022 32
Table 10: The Netherlands - Defense Capital Expenditure (EUR Billion and US$ Billion), 2013-2022 34
Table 11: The Netherlands - Defense Expenditure Breakdown (%), 2013-2022 36
Table 12: The Netherlands - Defense Expenditure for Army (EUR Billion and US$ Million), 2013-2022 38
Table 13: The Netherlands - Defense Expenditure for Air Force (EUR Million and US$ Million), 2013-2022 40
Table 14: The Netherlands - Defense Expenditure for Navy (EUR Million and US$ Million), 2013-2022 42
Table 15: The Netherlands - Defense Expenditure for Support Command (EUR Billion and US$ Billion), 2013-2022 44
Table 16: The Netherlands - Per Capita Defense Expenditure (US$), 2013-2022 46
Table 17: The Netherlands - Homeland Security Expenditure (EUR Billion and US$ Billion), 2013-2022 49
Table 18: Terrorism Index, 2017 53
Table 19: The Netherlands - Benchmarking with Key Markets, 2013-2017 vs 2018-2022 56
Table 20: Offset Regulations in the Netherlands 72
Table 21: The Netherlands Budget Formation Timetable: 75
Table 22: The Netherlands - Competitive Landscape of the Defense Industry 80
Table 23: Fokker Technologies - Product Focus 83
Table 24:Fokker Technologies- Alliances 84
Table25:Fokker Technologies- Recent Contract Wins 86
Table26:Damen Schelde Naval Shipbuilding- Product focus 87
Table27:Damen Schelde Naval Shipbuilding- Alliances 89
Table 28:Damen Schelde Naval Shipbuilding - Contracts 89
Table29:TNO Defense- Product focus 91
Table30:TNO Defense- Alliances 93
Table31:TNO Defense- Recent Contract Wins 93
Table32:Thales Nederland- Product focus 94
Table33:Thales Nederland- Alliances 96
Table34:Thales Nederland- Recent Contract Wins 97
Table35:Fokker Aerostructures - Service focus 99
Table36:Fokker Aerostructures- Alliances 100
Table37:Fokker Aerostructures- Recent Contract Wins 100
Table38: RH Marine Group - Product focus 101
Table39: RH Marine Group - Alliances 101
Table40: RH Marine Group - Recent Contract Wins 102
Table41:Lockheed Martin- Product focus 104
Table42:Lockheed Martin- Alliances 105
Table43:Lockheed Martin- Recent Contract Wins 106

List Of Figures

Figure 1: The Netherlands - Defense Expenditure (EUR Billion), 2013-2022 28
Figure 2: The Netherlands - Defense Expenditure (US$ Billion), 2013 - 2022 28
Figure 3: The Netherlands - GDP Growth vs. Defense Expenditures as Percentage of GDP Growth, 2013 - 2022 31
Figure 4: The Netherlands - Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022 33
Figure 5: The Netherlands - Defense Capital Expenditure (EUR Billion), 2013-2022 35
Figure 6: The Netherlands - Defense Capital Expenditure (US$ Billion), 2013-2022 35
Figure 7: The Netherlands - Defense Expenditure Breakdown (%), 2013-2022 37
Figure 8: The Netherlands - Defense Expenditure for Army (EUR Billion), 2013-2022 39
Figure 9: The Netherlands - Defense Expenditure for Army (US$ Billion), 2013-2022 39
Figure 10: The Netherlands - Defense Expenditure for Air Force (EUR Million), 2013-2022 41
Figure 11: The Netherlands - Defense Expenditure for Air Force (US$ Million), 2013-2022 41
Figure 12: The Netherlands - Defense Expenditure for Navy (EUR Million), 2013-2022 43
Figure 13: The Netherlands - Defense Expenditure for Navy (US$ Million), 2013-2022 43
Figure 14: The Netherlands - Defense Expenditure for Support Command (EUR Billion), 2013-2022 45
Figure 15: The Netherlands - Defense Expenditure for Support Command (US$ Billion), 2013-2022 45
Figure 16: The Netherlands - Per Capita Defense Expenditure (US$), 2013-2022 47
Figure 17: The Netherlands - Homeland Security Budget (EUR Billion), 2013-2022 49
Figure 18: The Netherlands - Homeland Security Budget (US$ Billion), 2013-2022 50
Figure 19: Terrorism Heat Map, 2017 52
Figure 20: The Netherlands - Terrorism Index, 2017 55
Figure 21: The Netherlands - Benchmarking with Key Markets, 2013-2017 vs 2018-2022 57
Figure 22: The Netherlands - Benchmarking with World’s Largest and Top Regional Defense Spenders (US$ Billion), 2017 and 2022 58
Figure 23: The Netherlands - Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017 59
Figure 24: The Netherlands - Fighters and Multi-Role Aircraft Market Size (US$ Million), 2017-2027 60
Figure 25: The Netherlands - Fighters and Multi-Role Aircraft-MRO Market Size (US$ Million), 2017-2027 61
Figure 26: The Netherlands - C2/C4ISR Market Size (US$ Million), 2017-2027 62
Figure 27: The Netherlands - Defense Import Trends, 2012-2016 (TIV Values US$ Million) 64
Figure 28: The Netherlands - Defense Imports by Country (%), 2012-2016 65
Figure 29: The Netherlands - Defense Imports by Category (%), 2012-2016 66
Figure 30: The Netherlands - Defense Export Trends, 2012-2016 (TIV Values US$ Million) 67
Figure 31: Netherlands Defense exports by Country (%), 2012-2016 68
Figure 32: Netherlands Defense Exports by Category (%), 2012-2016 69
Figure 33: Industry Dynamics Porter’s Five Forces Analysis 70
Figure 34: Netherlands GDP Per Capita US$, 2015-2025 107
Figure 35: Netherlands Gross Domestic Product (current US$ Bn), 2015-2025 108
Figure 36: Netherlands Exports of goods and services (LCU Bn), 2005-2014 109
Figure 37: Netherlands Imports of goods and services (LCU Bn), 2005-2014 110
Figure 38: Netherlands gross national disposable income (US$ Bn), 2005 - 2013 111
Figure 39: Netherlands LCU per US$, 2015-2024 112
Figure 40: Netherlands Market Capitalization of listed Companies (US$ Bn), 2005-2012 113
Figure 41: Netherlands Market Capitalization of listed companies as a % of GDP, 2005-2012 114
Figure 42: Netherlands Government cash Surplus/deficit as a % of GDP, 2005-2012 115
Figure 43: Netherlands Goods Exports as a % of GDP, 2005-2014 116
Figure 44: Netherlands Goods Imports as a % of GDP, 2005-2014 117
Figure 45: Netherlands Services Imports as a % of GDP, 2005-2014 118
Figure 46: Netherlands Services Exports as a % of GDP, 2005-2014 119
Figure 47: Netherlands Net Foreign Direct Investment (current US$ BN), 2005-2014 120
Figure 48: Netherlands Net FDI as a % of GDP, 2005-2014 121
Figure 49: Netherlands Mining, Manufacturing, Utilities Output(US$ Bn), 2005-2014 122

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