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

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

Summary

The Future of the UAE 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 UAE 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 UAE defense industry market size and drivers: detailed analysis of the UAE 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 with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
- Porter’s Five Force analysis of the UAE 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 UAE defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Scope

- Between 2013 and 2017, the UAE’s defense expenditure grew significantly, making it one of the most sought-after markets for foreign defense OEMs. The multitude of deals signed with foreign OEMs at its biennial international defense exhibitions, proves the attractiveness of the UAE’s defense market. The UAE’s defense budget recorded a CAGR of 1.94% over the historic period, with expenditure driven by defense modernization programs, the protection of infrastructure, territorial disputes, and participation in peacekeeping initiatives.
- The UAE faces serious constraints with respect to a limited pool of trained manpower and still has a relatively nascent domestic defense industrial infrastructure. This forces the country to import technologically superior, high-tech defense equipment from suppliers abroad. Over the forecast period, attractive opportunities are expected to emerge in aerial platforms, missiles, naval platforms, and surveillance areas. The country is also expected to invest in reconnaissance, space, cyber security, border control, and digital warfare initiatives.
- The average capital expenditure allocation of the total UAE defense budget during the forecast period is anticipated to reach 37.8% from 35.2% in the historic period. The substantial increase in the capital expenditure percentage is a result of UAE’s focus on modernizing its armed forces. During the forecasted period, the country is expected to invest in the procurement of multi-role aircraft, attack helicopters, armored vehicles, and cyber security capabilities.

Reasons to buy

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

1. Introduction 9
1.1. What is this Report About? 9
1.2. Definitions 9
1.3. Summary Methodology 12
1.4. About Strategic Defence Intelligence 13
2. Executive Summary 14
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 18
3.1.3. Military Fleet Size 20
3.1.4. Procurement Programs 24
3.1.5. Social, Political and Economic Environment and Support for Defense Projects 27
3.1.6. Political and Strategic Alliances 28
3.2. Defense Market Size Historical and Forecast 30
3.2.1. UAE defense budget to record a CAGR of 11.25% over the forecast period 30
3.2.2. Military modernization initiatives, territorial dispute with Iran, and peace keeping missions to drive defense expenditure 33
3.2.3. The defense budget as a percentage of GDP is expected to increase during the forecast period 35
3.3. Analysis of Defense Budget Allocation 37
3.3.1. Procurement of advanced equipment to drive capital expenditure allocation during the forecast period 37
3.3.2. Capital expenditure is expected to grow at a CAGR of 12.28% over the forecast period 39
3.3.3. Per capita defense expenditure expected to increase during the forecast period 41
3.4. Homeland Security Market Size and Forecast 43
3.4.1. UAE homeland security is expected to increase at a CAGR of 4.44% over the forecast period 43
3.4.2. Investment in the protection of infrastructure and cyber security are expected to drive the UAE homeland security market 45
3.4.3. UAE falls under “some risk†category on the Terrorism Index 47
3.4.4. UAE faces “some risk†by acts of terrorism 48
3.4.5. UAE has a terrorism index score of 0.4 50
3.5. Benchmarking with Key Global Markets 51
3.5.1. UAE defense budget expected to register rapid growth over the period 2018-2022 51
3.5.2. UAE defense expenditure is relatively small when compared to the leading defense spenders 53
3.5.3. UAE spent over 6.2% of its GDP on defense in 2017 54
3.6. Market Opportunities: Key Trends and Drivers 55
3.6.1. Multi-role aircraft 55
3.6.2. Military Infrastructure Construction 56
3.6.3. Mine Resistance Armored Protected Vehicle 57
3.6.4. Military ISR satellites 58
3.6.5. Infantry Fighting Vehicles (IFV) 59
4. Defense Procurement Market Dynamics 60
4.1. Import Market Dynamics 61
4.1.1. Limitations of the domestic defense industry to encourage arms imports 61
4.1.2. The UAE stood as the world’s fourth-largest arms importer over the historic period 62
4.1.3. The US continues to be the major arms supplier to the UAE 63
4.1.4. Missiles and Aircraft dominates UAE defense imports 64
4.2. Export Market Dynamics 65
4.2.1. The UAE has minimal defense exports 65
5. Industry Dynamics 68
5.1. Five Forces Analysis 68
5.1.1. Bargaining power of supplier: low to medium 69
5.1.2. Bargaining power of buyer: medium to high 69
5.1.3. Barrier to entry: medium to high 69
5.1.4. Intensity of rivalry: high 70
5.1.5. Threat of substitution: low to medium 70
6. Market Entry Strategy 71
6.1. Market Regulation 71
6.1.1. Defense deals are settled through direct negotiation or competitive bidding 71
6.1.2. Foreign OEMs prefer indirect offsets to meet the obligations associated with defense deals 71
6.2. Market Entry Route 73
6.2.1. Budget Process 73
6.2.2. Procurement Policy and Process 74
6.2.3. Foreign OEMs use proxy representatives to enter the market 74
6.2.4. Defense exhibitions hosted by the UAE serve as an entry route for foreign OEMs 75
6.2.5. Joint ventures and collaborations offer alternative means of entering the market 75
6.3. Key Challenges 76
6.3.1. Complying with the UAE’s stringent offset requirements a concern for OEMs 76
6.3.2. UAE demands technology transfer in defense deals 76
7. Competitive Landscape and Strategic Insights 77
7.1. Competitive Landscape Overview 77
7.2. Key Domestic Public Sector Companies 78
7.2.1. Abu Dhabi Ship Building - Overview 78
7.2.2. Abu Dhabi Ship Building - Major Products and Services 78
7.2.3. Abu Dhabi Ship Building (ADSB) - recent announcements and strategic initiatives 78
7.2.4. Abu Dhabi Ship Building - alliances 79
7.2.5. Abu Dhabi Ship Building - recent contract wins 80
7.2.6. Abu Dhabi Ship Building: Financial Analysis 81
7.2.7. Gulf Logistics and Naval Support - overview 83
7.2.8. Gulf Logistics and Naval Support - Major Services 83
7.2.9. Abu Dhabi Systems Integration - overview 84
7.2.10. Abu Dhabi Systems Integration - Major Products and Services 84
7.2.11. Abu Dhabi Systems Integration - recent announcements and strategic initiatives 84
7.2.12. Abu Dhabi Systems Integration - alliances 85
7.3. Key Foreign Companies 86
7.3.1. Lockheed Martin: overview 86
7.3.2. Lockheed Martin: products 86
7.3.3. Lockheed Martin: recent announcements and strategic initiatives 86
7.3.4. Lockheed Martin: alliances 87
7.3.5. Lockheed Martin: recent contract wins 88
7.3.6. Lockheed Martin: Financial Analysis 90
7.3.7. BAE Systems Plc. - Overview 92
7.3.8. BAE Systems Plc. - Major Products 92
7.3.9. BAE Systems Plc. - recent announcements and strategic initiatives 93
7.3.10. BAE Systems Plc. - alliances 94
7.3.11. BAE Systems Plc. - recent contract wins 95
7.3.12. BAE Systems: Financial Analysis 97
7.3.13. Raytheon: Overview 99
7.3.14. Raytheon: Major products 99
7.3.15. Raytheon: recent announcements and strategic initiatives 99
7.3.16. Raytheon: alliances 102
7.3.17. Raytheon: recent contract wins 103
7.3.18. Raytheon: Financial Analysis 105
7.3.19. Rolls-Royce Plc. - Overview 107
7.3.20. Rolls-Royce Plc. - Major Products 107
7.3.21. Rolls-Royce Plc. - recent announcements and strategic initiatives 107
7.3.22. Rolls-Royce Plc. - alliances 108
7.3.23. Rolls-Royce Plc. - recent contract wins 109
7.3.24. Rolls-Royce Plc.: Financial Analysis 110
7.3.25. Northrop Grumman Corporation - Overview 112
7.3.26. Northrop Grumman Corporation - Major Products 112
7.3.27. Northrop Grumman Corporation - recent announcements and strategic initiatives 112
7.3.28. Northrop Grumman Corporation: alliances 114
7.3.29. Northrop Grumman Corp.: recent contract wins 116
7.3.30. Northrop Grumman: Financial Analysis 118
7.3.31. Thales - Overview 120
7.3.32. Thales - Major Products 120
7.3.33. Thales - recent announcements and strategic initiatives 120
7.3.34. Thales - alliances 121
7.3.35. Thales - recent contract wins 122
7.3.36. Thales: Financial Analysis 123
7.3.37. The Boeing Company - Overview 125
7.3.38. The Boeing Company - Major Products 125
7.3.39. The Boeing Company - recent announcements and strategic initiatives 125
7.3.40. The Boeing Company - alliances 126
7.3.41. The Boeing Company - recent contract wins 127
7.3.42. The Boeing Company: Financial Analysis 129
8. Business Environment and Country Risk 131
8.1. Economic Performance 131
8.1.1. GDP per Capita 131
8.1.2. Gross Domestic Product 132
8.1.3. Exports of Goods and Services 133
8.1.4. Imports of Goods and Services (LCU Bn) 134
8.1.5. LCU per USD (period average) 135
8.1.6. Market Capitalization of Listed Companies 136
8.1.7. Market Capitalization of listed companies as a % GDP 137
8.1.8. Foreign direct investment, net (BoP, current US$ Billion) 138
8.1.9. Net foreign direct investment as % of GDP 139
8.1.10. Mining, Manufacturing, Utilities Output (LCU Bn) 140
9. Appendix 141
9.1. About SDI 141
9.2. Disclaimer 141

List Of Tables

Table 1: UAE Army Strength 20
Table 2: UAE Air Force Strength 22
Table 3: UAE Navy Strength 23
Table 4: UAE - Ongoing Development and Procurement Programs 24
Table 5: UAE - Future Procurement Programs 26
Table 6: UAE Defense Expenditure (AED Billion & US$ Billion), 2013-2022 31
Table 7: UAE GDP Growth and Defense Expenditure as Percentage of GDP Growth, 2013-2022 35
Table 8: UAE Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022 37
Table 9: UAE Defense Capital Expenditure (AED Billion & US$ Billion), 2013-2022 39
Table 10: UAE Per Capita Expenditure (US$), 2013-2022 41
Table 11: UAE Defense Expenditure for Homeland Security (AED Billion & US$ Billion), 2013-2022 43
Table 12: Terrorism Index, 2017 48
Table 13: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022 51
Table 14: UAE - Offset Guidelines and Agreements 72
Table 15: UAE Budget Formation Timetable 73
Table 16: Competitive Landscape of the UAE Defense Industry 77
Table 17: Abu Dhabi Ship Building - Major Products & Services 78
Table 18: Abu Dhabi Ship Building - Alliances 79
Table 19: Abu Dhabi Ship Building - recent contract wins 80
Table 20: Gulf Logistics and Naval Support - Major Services 83
Table 21: Abu Dhabi Systems Integration - Major Products & Services 84
Table 22: Abu Dhabi Systems Integration - alliances 85
Table 23: Lockheed Martin - Major Services 86
Table 24: Lockheed Martin - Alliances 87
Table 25: Lockheed Martin - Recent Contract Wins 88
Table 26: BAE Systems Plc. - Major Products 92
Table 27: BAE Systems Plc. - Alliances 94
Table 28: BAE Systems Plc. - recent contract wins 95
Table 29: Raytheon - Major Products 99
Table 30: Raytheon - Alliances 102
Table 31: Raytheon Company - recent contract wins 103
Table 32: Rolls-Royce Plc.- Major Products 107
Table 33: Rolls-Royce Plc. - Alliances 108
Table 34: Rolls-Royce Plc. - recent contract wins 109
Table 35: Northrop Grumman - Major Products 112
Table 36: Northrop Grumman Corporation - Alliances 114
Table 37: Northrop Grumman Corp. - Recent Contract Wins 116
Table 38: Thales - Major Products 120
Table 39: Thales - Alliances 121
Table 40: Thales - recent contract wins 122
Table 41: The Boeing Company - Major Products 125
Table 42: The Boeing Company - Alliances 126
Table 43: The Boeing Company - recent contract wins 127

List Of Figures

List of Figures
Figure 1: UAE Defense Expenditure (in AED Billion), 2013-2022 31
Figure 2: UAE Defense Expenditure (US$ Billion), 2013-2022 32
Figure 3: UAE GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2013-2022 36
Figure 4: UAE Defense Expenditure Split Between Capital and Revenue Expenditure (%), 2013-2022 38
Figure 5: UAE Defense Capital Expenditure (AED Billion), 2013-2022 40
Figure 6: UAE Defense Capital Expenditure (US$ Billion), 2013-2022 40
Figure 7: UAE Per Capita Expenditure (US$), 2013-2022 42
Figure 8: UAE Homeland Security Expenditure (AED Billion), 2013-2022 44
Figure 9: UAE Homeland Security Expenditure (US$ Billion), 2013-2022 44
Figure 10: Terrorism Heat Map, 2017 47
Figure 11: Terrorism Index, 2017 50
Figure 12: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022 52
Figure 13: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2017 and 2022 53
Figure 14: Benchmarking with Large Defense Spenders as % of GDP - 2017 54
Figure 15: Multi-role Aircraft (US$ Million), 2017-2027 55
Figure 16: Military Infrastructure Construction (US$ Million), 2017-2027 56
Figure 17: Mine Resistance Armored Protected Vehicle Market Size (US$ Million), 2017-2027 57
Figure 18: Military ISR satellites market size (US$ Million), 2017-2027 58
Figure 19: Infantry Fighting Vehicle (US$ Million), 2017-2027 59
Figure 20: UAE Defense Imports (US$ million), 2012-2016 62
Figure 21: UAE Defense Imports by Country (%), 2012-2016 63
Figure 22: UAE Defense Imports by Category, 2012-2016 64
Figure 23: UAE Defense Exports (US$ million), 2012-2016 65
Figure 24: UAE Defense Exports by Country (%), 2012-2016 66
Figure 25: UAE Defense Exports by Category, 2013-2016 67
Figure 26: Industry Dynamics Porter’s Five Forces Analysis 68
Figure 27: Abu Dhabi Ship Building - Revenue Trend Analysis (AED Million), 2012-2016 81
Figure 28: Abu Dhabi Ship Building - Operating Profit Trend Analysis (AED million), 2012-2016 81
Figure 29: Abu Dhabi Ship Building - Net Profit Trend Analysis (AED million), 2012-2016 82
Figure 30: Lockheed Martin - Revenue Trend Analysis (US$ Billion), 2012-2016 90
Figure 31: Lockheed Martin - Operating Profit Trend Analysis (US$ Billion), 2012-2016 91
Figure 32: Lockheed Martin - Net Profit Trend Analysis (US$ Billion), 2012-2016 91
Figure 33: BAE Systems - Revenue Trend Analysis (GBP Billion), 2012-2016 97
Figure 34: BAE Systems - Operating Profit Trend Analysis (GBP Billion), 2012-2016 97
Figure 35: BAE Systems - Net Profit Trend Analysis (GBP Billion), 2012-2016 98
Figure 36: Raytheon - Revenue Trend Analysis (US$ Billion), 2012-2016 105
Figure 37: Raytheon - Operating Profit Trend Analysis (US$ Billion), 2012-2016 106
Figure 38: Raytheon - Net Profit Trend Analysis (US$ Billion), 2012-2016 106
Figure 39: Rolls-Royce Plc. - Revenue Trend Analysis (GBP Billion), 2012-2016 110
Figure 40: Rolls-Royce Plc. - Operating Profit Trend Analysis (GBP Million), 2012-2016 110
Figure 41: Rolls-Royce Plc. - Net Profit Trend Analysis (GBP Million), 2012-2016 111
Figure 42: Northrop Grumman - Revenue Trend Analysis (US$ Billion), 2012-2016 118
Figure 43: Northrop Grumman - Operating Profit Trend Analysis (US$ Billion), 2012-2016 118
Figure 44: Northrop Grumman - Net Profit Trend Analysis (US$ Billion), 2012-2016 119
Figure 45: Thales - Revenue Trend Analysis (EUR Billion), 2012-2016 123
Figure 46: Thales - Operating Profit Trend Analysis (EUR million), 2012-2016 123
Figure 47: Thales - Net Profit Trend Analysis (EUR million), 2012-2016 124
Figure 48: Boeing - Revenue Trend Analysis (USD Billion), 2012-2016 129
Figure 49: Boeing - Operating Profit Trend Analysis (US$ Billion), 2012-2016 129
Figure 50: Boeing - Net Profit Trend Analysis (US$ Billion), 2012-2016 130
Figure 51: UAE GDP Per Capita (US$), 2015-2025 131
Figure 52: UAE GDP at Current Prices (US$ Billion), 2015-2025 132
Figure 53: UAE Exports of goods and services (LCU Billion), 2005-2014 133
Figure 54: UAE Imports of goods and services (LCU Billion), 2005-2014 134
Figure 55: LCU per USD (US$), 2015-2025 135
Figure 56: UAE market capitalization of listed companies (US$ billion), 2005-2012 136
Figure 57: UAE market capitalization of listed companies (% of GDP), 2005-2012 137
Figure 58: UAE net foreign direct investment (BoP, current US$ Billion) 2011-2014 138
Figure 59: UAE net foreign direct investment as a % of GDP 2005-2014 139
Figure 60: UAE net foreign direct investment as a % of GDP 2005-2014 140

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