Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023
Summary
The Chilean defense budget values US$2.9 billion in 2018 and registered a CAGR of 4.20% during the historic period 2014-2018. However, it is anticipated to increase at a CAGR of 5.80% over the forecast period to value US$3.8 billion in 2023. As a percentage of GDP, the country’s defense budget is expected to average 1% over the forecast period.
This is primarily due to the country’s plans to procure multirole aircraft, transport aircraft, naval air defense systems, and military helicopters. The country’s capital expenditure allocation averaged 27.3% during 2014-2018 and is expected to average of 25.6% over the forecast period. Chile’s homeland security (HLS) expenditure values US$5.3 billion in 2018 and registered a CAGR of 4.66% during the historic period.
Moreover, it is anticipated to register a CAGR of 2.30% over the forecast period to value US$5.9 billion in 2023. The expenditure is primarily driven by the country’s efforts to strengthen its internal security system to combat the rise in organized crime such as drug trafficking, natural calamities, and a threat from the Mapuche community, which is Chile’s largest indigenous ethnic group.
On a cumulative basis, the country is expected to spend US$4.4 billion over the forecast period on the procurement of transport aircraft, patrol vessels, and military helicopters. The majority of the defense budget will go towards revenue expenditure, which includes personnel salaries, operational expenses, training, and development. Capital Expenditure allocations during the forecast period are also expected to increase, encouraging defense imports.
The Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023, 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.
In particular, it provides an in-depth analysis of the following:
- The Chilean defense industry market size and drivers: detailed analysis of the Chilean defense industry during 2019-2023, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the country’s expenditure and modernization patterns.
- Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country.
- Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years.
- Market opportunities: list of the top ten defense investment opportunities over the next 5 years.
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Chilean defense industry.
Companies Mentioned: FAMAE, Desarrollo de Tecnologias y Sistemas (DTS), Linktronic Radar Systems, SISDEF Ltda.
Scope
- The Chilean defense budget values US$2.9 billion in 2018 and registered a CAGR of 4.20% during the historic period 2014-2018.
- However, it is anticipated to increase at a CAGR of 5.80% over the forecast period to value US$3.8 billion in 2023.
- As a percentage of GDP, the country’s defense budget is expected to average 1% over the forecast period. This is primarily due to the country’s plans to procure multirole aircraft, transport aircraft, naval air defense systems, and military helicopters.
- The country’s capital expenditure allocation averaged 27.3% during 2014-2018 and is expected to average of 25.6% over the forecast period. Chile’s homeland security (HLS) expenditure values US$5.3 billion in 2018 and registered a CAGR of 4.66% during the historic period.
- Moreover, it is anticipated to register a CAGR of 2.30% over the forecast period to value US$5.9 billion in 2023.
- The expenditure is primarily driven by the country’s efforts to strengthen its internal security system to combat the rise in organized crime such as drug trafficking, natural calamities, and a threat from the Mapuche community, which is Chile’s largest indigenous ethnic group.
Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Chilean defense industry market trends for the coming five years
- The market opportunity section will inform the user about the various military requirements that are expected to generate revenues during the forecast period. The description includes technical specifications, recent orders, and the expected investment pattern by the country during the forecast period
- Profiles of the top domestic and foreign defense manufacturers. This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Chilean defense industry covering sections including demand drivers, Key Trends , and latest industry contracts
Table of Contents
1. Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About the Publisher
2. Executive Summary
3. Market Attractiveness and Emerging Opportunities
3.1. Current Market Scenario
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine & Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023
3.1.6. Social, Political and Economic Environment and Support for Defense Projects
3.1.7. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Chilean defense expenditure is anticipated to grow at a CAGR of 5.80% over the forecast period
3.2.2. Border disputes and military modernization to drive defense expenditure
3.2.3. Defense expenditure as a percentage of GDP is anticipated to increase over the forecast period
3.3. Analysis of Defense Budget Allocations
3.3.1. Capital expenditure allocation expected to increase over the forecast period
3.3.2. Capital expenditure expected to increase over the forecast period
3.3.3. Others accounted for the largest percentage share of the overall defense budget during the historic period
3.3.4. Other segment to account for the highest share of Chile’s defense budget
3.3.5. Per-capita defense expenditure expected to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Homeland security market expected to grow at a CAGR of 2.30% over the forecast period
3.4.2. Drug trafficking, natural disasters, and threats from the Mapuche community to drive the homeland security budget
3.4.3. Chile considered at ‘moderate risk’ of a terrorist attack
3.4.4. Chile experienced moderate terror activity during the historic period
3.4.5. Chile has a terrorism index score of 3.3
3.5. Benchmarking with Key Global Markets
3.5.1. Chilean defense budget expected to register consistent growth over the forecast period
3.5.2. Chilean military expenditure is expected to remain low compared to other leading spenders
3.5.3. Defense budget as a percentage of GDP expected to remain low on a global scale
3.6. Market Opportunities: Key Trends and Growth Stimulators
3.6.1. Top 10 Defense Market Categories by Value (US$ million) - Forecast-Period Projections
3.6.2. Physical Security - Critical Infrastructure Protection (CIP)
3.6.3. Land-based C4ISR
3.6.4. Transport Aircraft
4. Defense Procurement Market Dynamics
4.1.1. Import Market Dynamics
4.1.2. Defense imports maintained large volumes during the historic period
4.1.3. The US accounts for most of Chile’s defense imports
4.1.4. Missiles, sensors and naval vessels are the main categories of imported military hardware
4.2. Export Market Dynamics
4.2.1. Aircraft are the main exported defense products
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power of Supplier: Medium
5.1.2. Bargaining Power of Buyer: Low
5.1.3. Barrier to Entry: Low
5.1.4. Intensity of Rivalry: Low to Medium
5.1.5. Threat of Substitution: High
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset policy aids the development of the domestic defense industry
6.1.2. Foreign direct investment in the defense sector is restricted
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy and Process
6.2.3. The country’s biennial defense exhibition provides an attractive entry route
6.2.4. Joint ventures and collaborations provide market entry opportunities
6.2.5. Foreign equipment manufacturers enter the market through direct commercial sales
6.3. Key Challenges
6.3.1. Dependency on copper exports
6.3.2. Corruption and the country’s small defense budget can restrict defense sector growth
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. FAMAE: Overview
7.2.2. FAMAE: Products and Services
7.2.3. FAMAE: Recent Announcements and Strategic Initiatives
7.2.4. FAMAE: Alliances
7.2.5. FAMAE: Recent Contract Wins
7.2.6. Desarrollo de Tecnologias y Sistemas (DTS): Overview
7.2.7. Desarrollo de Tecnologias y Sistemas (DTS): Products and Services
7.2.8. Desarrollo de Tecnologias y Sistemas (DTS): Recent Announcements and Strategic Initiatives
7.2.9. Desarrollo de Tecnologias y Sistemas (DTS): Alliances
7.2.10. Linktronic Radar Systems: Overview
7.2.11. Linktronic Radar Systems: Products
7.2.12. SISDEF Ltda: Overview
7.2.13. SISDEF Ltda: Products
7.2.14. SISDEF Ltda: Recent Announcements and Strategic Initiatives
7.2.15. SISDEF Ltda: Recent Contract Wins
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP Per Capita
8.1.2. GDP, Current Prices, US$ Billion
8.1.3. Local Currency Unit per US$
8.1.4. Market Capitalization of Listed Companies
8.1.5. Market Capitalization of Listed Companies (% of GDP)
8.1.6. Exports of Goods and Services (LCU Billion)
8.1.7. Imports of Goods and Services (LCU Billion)
8.1.8. Goods Exports as a Percentage of GDP
8.1.9. Goods Imports as a Percentage of GDP
8.1.10. Gross National Disposable Income (US$ Billion)
8.1.11. Service Imports as a Percentage of GDP
8.1.12. Service Exports as a Percentage of GDP
8.1.13. Foreign Direct Investment
8.1.14. Net Foreign Direct Investment as a Percentage of GDP
8.1.15. Government Cash Surplus/Deficit as a Percentage of GDP (LCU)
8.1.16. Mining, Manufacturing, Utilities Output
9. Appendix
9.1. About the Author
9.2. Disclaimer
List of Tables
Table 1: Chile Ground Forces Strength
Table 2: Chile Navy Strength
Table 3: Chile Air Force Strength
Table 4: Chile - Ongoing Development and Procurement Programs
Table 5: Chile - Future Procurement Programs
Table 6: Chilean - Defense Procurement Programs by Value (US$ Million), 2018-2023
Table 7: Chilean Defense Expenditure (CLP$ Trillion & US$ Billion), 2014-2023
Table 8: Chilean GDP Growth and Defense Expenditure as a Percentage of GDP, 2014-2023
Table 9: Chilean Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 10: Chilean Defense Capital Expenditure (CLP$ Billion & US$ Million), 2014-2023
Table 11: Chilean Defense Budget Split Between Military Services (Army, Navy, Air Force and Others) (%), 2014-2023
Table 12: Chile - Defense Budget Breakdown by Service (CPL$ Billion), 2014-2023
Table 13: Chile - Defense Budget Breakdown by Service ( US$ Billion), 2014-2023
Table 14: Chilean Per-Capita Defense Expenditure (US$), 2014-2023
Table 15: Chilean Homeland Security Expenditure (CLP$ Trillion & US$ Billion), 2014-2023
Table 16: Terrorism Index, 2018
Table 17: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 18: Chilean - 10 Leading Defense Market Categories by Value (US$ Million), 2018-2023
Table 19: Chile Budget Formation Timetable
Table 20: Chilean - Top Defense Suppliers by Value (US$ Million), 2018-2023
Table 21: Competitive Landscape of the Chilean Defense Industry
Table 22: FAMAE - Products and Services
Table 23: FAMAE - Alliances
Table 24: FAMAE - Recent Contract Wins
Table 25: Desarrollo de Tecnologias y Sistemas (DTS) - Products and Services
Table 26: Desarrollo de Tecnologias y Sistemas (DTS) - Alliances
Table 27: Linktronic Radar Systems - Products
Table 28: SISDEF Ltda - Products
Table 29: SISDEF Ltda - Recent Contract Wins
List of Figures
Figure 1: Chilean Defense Expenditure (CLP$ Trillion), 2014-2023
Figure 2: Chilean Defense Expenditure (US$ Billion), 2014-2023
Figure 3: Chilean GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023
Figure 4: Chilean Defense Expenditure Allocation for Capital and Revenue Expenditure (%), 2014-2023
Figure 5: Chilean Defense Capital Expenditure (CLP$ Billion), 2014-2023
Figure 6: Chilean Defense Capital Expenditure (US$ Million), 2014-2023
Figure 7: Chilean Defense Budget Split Between Army, Air Force, Navy and Others, 2014-2023
Figure 8: Chile - Defense Budget Breakdown by Service (CPL$ Billion), 2014-2023
Figure 9: Chile - Defense Budget Breakdown by Service (US$ Billion), 2014-2023
Figure 10: Chilean Per-Capita Defense Expenditure (US$), 2014-2023
Figure 11: Chilean Homeland Security Budget (CLP$ Trillion), 2014-2023
Figure 12: Chilean Homeland Security Budget (US$ Billion), 2014-2023
Figure 13: Terrorism Heat Map, 2018
Figure 14: Terrorism Index, 2018
Figure 15: Benchmarking with Key Global Markets: 2014-2018 vs. 2019-2023
Figure 16: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2018 and 2023
Figure 17: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2018
Figure 18: Physical Security - CIP Market Size (US$ Million), 2018-2023
Figure 19: Land-based C4ISR - Networking Market Size (US$ Million), 2018-2023
Figure 20: Transport Aircraft Market Size (US$ Million), 2018-2023
Figure 21: Chile - Defense Procurements in Terms of Supplier Relationships, 2018
Figure 22: Chilean Defense Imports (US$ Million), 2013-2017
Figure 23: Chilean Defense Imports by Country (%), 2013-2017
Figure 24: Chilean Defense Imports by Category (%), 2013-2017
Figure 25: Industry Dynamics - Porter’s Five Forces Analysis
Figure 26: Chilean GDP Per Capita, 2015-2025
Figure 27: Chilean GDP, Current Prices, US$ Billion, 2015-2025
Figure 28: Chilean LCU per US$, 2015-2024
Figure 29: Chilean Market Capitalization of Listed Companies (US$ Billion), 2005-2012
Figure 30: Chilean Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 31: Chilean Exports of Goods and Services (LCU Billion), 2005-2014
Figure 32: Chilean Imports of Goods and Services (LCU Billion), 2005-2014
Figure 33: Chilean Goods Exports as a Percentage of GDP, 2005-2014
Figure 34: Chilean Goods Imports as a Percentage of GDP, 2005-2014
Figure 35: Chilean Gross National Disposable Income (US$ Billion), 2005-2014
Figure 36: Chilean Service Imports as a Percentage of GDP, 2005-2014
Figure 37: Chilean Service Exports as a Percentage of GDP, 2005-2014
Figure 38: Chilean Foreign Direct Investment (US$ Billion), 2005-2014
Figure 39: Chilean Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
Figure 40: Chilean Government Cash Surplus/Deficit as a Percentage of GDP (LCU), 2005-2012
Figure 41: Chilean Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014
Samples
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Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- FAMAE
- Desarrollo de Tecnologias y Sistemas (DTS)
- Linktronic Radar Systems
- SISDEF Ltda.
Methodology
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