Future of the Kuwaiti Defense Industry Market Attractiveness, Competitive Landscape and Forecasts to 2023
Summary
Kuwait remains wary of the resurgence of Islamic State (IS) in neighboring Iraq with which shares a long border and continues to face the threat of IS infiltration. Although the influence of IS reduced significantly by 2017, IS extremists, which in the past orchestrated an attack on Imam Sadiq mosque in the Al Sawabir area of Kuwait City, can regroup and launch strikes on other targets within Kuwait. Thus Kuwait is expected to invest heavily in securing is frontiers to prevent illegal infiltration.
With a military expenditure of US$7.6 billion in 2018, Kuwait is expected to cumulatively spend US$48.3 billion on its military over the forecast period. Kuwaiti military and security expenditure, registered a CAGR of 6.87% during the historic period.
Between 2014 and 2018, the country allocated an average of 19.3% of the total defense budget to capital expenditure, and the remaining 80.7% to revenue expenditure. The country’s revenue expenditure is characterized by high levels of investment in operating its military, such as salaries and the pensions of retired personnel. Over the forecast period, the Kuwaiti Ministry of National Defense (MND) is expected to increase its current level of allocation for capital expenditure, averaging 21.3% of the total defense budget.
The MoD is expected to invest in multirole aircraft, corvettes, and airborne C4ISR among others. As it is poised to procure Eurofighter Typhoon combat jets, along with 24 fixed wing Caracas helicopters and light armored vehicles, in a deal worth US$2.8 billion. Due to the lack of domestic manufacturing forces, Kuwait relies on imports, which are expected to increase over the forecast period.
Future of the Kuwaiti Defense Industry Market Attractiveness, Competitive Landscape and Forecasts to 2023, provides readers with detailed analysis of both historic and forecast defense industry values (market size), 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 Kuwaiti defense industry market size and drivers: detailed analysis of the Kuwaiti 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
- Porter’s Five Force analysis of the Kuwaiti 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 Kuwaiti defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
Companies Mentioned Lockheed Martin, Raytheon, Abu Dhabi Ship Building (ADSB), Boeing, Eurofighter Jagdflugzeug, Airbus Helicopters and General Dynamics
Scope
- With a military expenditure of US$7.6 billion in 2018, Kuwait is expected to cumulatively spend US$48.3 billion on its military over the forecast period. Kuwaiti military and security expenditure, which stood at US$7.6 billion in 2018, registered a CAGR of 6.87% during the historic period.
- Between 2014 and 2018, the country allocated an average of 19.3% of the total defense budget to capital expenditure, and the remaining 80.7% to revenue expenditure
- The country’s revenue expenditure is characterized by high levels of investment in operating its military, such as salaries and the pensions of retired personnel.
- Over the forecast period, the Kuwaiti Ministry of National Defense (MND) is expected to increase its current level of allocation for capital expenditure, averaging 21.3% of the total defense budget.
- The MoD is expected to invest in multirole aircraft, corvettes, and airborne C4ISR 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 Kuwaiti 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 Kuwaiti defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, 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
3.1.1. Primary Threat Perception
3.1.2. Military Doctrine and Strategy
3.1.3. Military Fleet Size
3.1.4. Procurement Programs
3.1.5. Social, Political and Economic Environment and Support for Defense Projects
3.1.6. Political and Strategic Alliances
3.2. Defense Market Size Historical and Forecast
3.2.1. Defense and security expenditure to cumulatively value US$48.3 billion over the forecast period
3.2.2. The border dispute with Iraq, coupled with its military modernization program, will be key factors to drive defense expenditure
3.2.3. Defense budget as a percentage of GDP to average 6.2% over the forecast period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital expenditure allocation to increase over the forecast period
3.3.2. Capital expenditure is expected to grow at a CAGR of 7.73% over the forecast period
3.3.3. Per capita defense expenditure to increase over the forecast period
3.4. Homeland Security Market Size and Forecast
3.4.1. Cyber threats, illegal drug trade, and human trafficking will be the key factors to drive homeland security
3.4.2. Kuwait is considered at ‘moderate risk’ of terrorist attack
3.4.3. Kuwait faces moderate threat from terrorist organizations
3.4.4. Kuwait has a terrorism index score of 3.8
3.5. Benchmarking with Key Global Markets
3.5.1. Kuwaitis a comparatively low defense spender
3.5.2. The country has a relatively low defense budget compared to other Middle Eastern nations
3.5.3. Kuwaiti defense expenditure as a percentage of GDP is expected to decrease
3.6. Market Opportunities: Key Trends and Drivers
3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023
3.6.2. Multi-Role Aircraft
3.6.3. Naval Vessels MRO - Corvettes
3.6.4. Airborne C4ISR
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Kuwaiti defense industry is import driven
4.1.2. Kuwait imports the majority of its military equipment from the US
4.1.3. Air Defense Systems, Aircraft and Missiles to dominate Kuwaiti defense imports
4.2. Export Market Dynamics
4.2.1. Kuwait’s defense export market is negligible
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of the supplier: high
5.1.2. Bargaining power of the buyer: medium to high
5.1.3. Barrier to entry: medium
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. The Kuwaiti Government does not disclose FDI in the defense industry
6.1.2. Offset policy aids the transfer of advanced technologies and integration into the local economy
6.2. Market Entry Route
6.2.1. Budgeting process
6.2.2. Procurement policy and process
6.2.3. Foreign military sales (FMS) is the preferred entry route
6.2.4. Gulf Co-operation Council (GCC) to form joint Military Command, which could be an alternative entry route for foreign OEM’s
6.3. Key Challenges
6.3.1. The US and Russia dominate the market, posing challenges to other foreign firms
6.3.2. Scarcity of skilled labor
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. The Kuwaiti defense sector is dominated by foreign competitors
7.2. Key Foreign Companies
7.2.1. Lockheed Martin: Overview
7.2.2. Lockheed Martin: Products and services
7.2.3. Lockheed Martin: Recent announcements and strategic initiatives
7.2.4. Lockheed Martin: Alliances
7.2.5. Lockheed Martin: Recent contract wins
7.2.6. Lockheed Martin: Financial analysis
7.2.7. Raytheon: Overview
7.2.8. Raytheon: Major products
7.2.9. Raytheon: Recent announcements and strategic initiatives
7.2.10. Raytheon: Alliances
7.2.11. Raytheon: Contracts
7.2.12. Raytheon: Financial analysis
7.2.13. Abu Dhabi Ship Building PJSC: Overview
7.2.14. Abu Dhabi Ship Building PJSC: Recent announcements and strategic initiatives
7.2.15. Abu Dhabi Ship Building PJSC: Contracts
7.2.16. Boeing: Overview
7.2.17. Boeing: Products
7.2.18. Boeing: Recent announcements and strategic initiatives
7.2.19. Boeing: Alliances
7.2.20. Boeing: Contracts
7.2.21. Eurofighter Jagdflugzeug: Overview
7.2.22. Eurofighter Jagdflugzeug: Products
7.2.23. Eurofighter Jagdflugzeug: Recent Announcements and Strategic Initiatives
7.2.24. Eurofighter Jagdflugzeug: Recent contract wins
7.2.25. Airbus Helicopters: Overview
7.2.26. Airbus Helicopters: Products and services
7.2.27. Airbus Helicopters: Recent announcements and strategic initiatives
7.2.28. Airbus Helicopters: Alliances
7.2.29. Airbus Helicopters: Recent contract wins
7.2.30. General Dynamics: Overview
7.2.31. General Dynamics: Products
7.2.32. General Dynamics: Recent announcements and strategic initiatives
7.2.33. General Dynamics: Alliances
7.2.34. General Dynamics: Recent contract wins
7.2.35. General Dynamics: financial analysis
8. Business Environment and Country Risk
8.1. Economic Performance
8.1.1. GDP per Capita
8.1.2. Gross Domestic Product
8.1.3. Exports of Goods and Services
8.1.4. Imports of Goods and Services
8.1.5. Gross National Disposable Income (US$ Billion)
8.1.6. LCU per US$ (Period Average)
8.1.7. Market Capitalization of Listed Companies
8.1.8. Market Capitalization of Listed Companies as a Percentage GDP
8.1.9. Total Government Cash Surplus/Deficit as a Percentage of GDP
8.1.10. Goods Exports as a Percentage of GDP
8.1.11. Goods Imports as a Percentage of GDP
8.1.12. Services Imports as a Percentage of GDP
8.1.13. Services Exports as a Percentage of GDP
8.1.14. Net Foreign Direct Investment
8.1.15. Net Foreign Direct Investment as a Percentage of GDP
8.1.16. Mining, Manufacturing, Utilities Output
9. Appendix
9.1. About the author
9.2. Disclaimer
List of Tables
Table 1: Kuwait - Army Strength, 2018
Table 2: Kuwait - Air Force Strength, 2018
Table 3: Kuwait - Navy Strength, 2018
Table 4: Kuwaiti - Ongoing Development and Procurement Programs, 2018
Table 5: Kuwait - Future Procurement Programs, 2018
Table 6: Kuwaiti - Top Defense Procurement Programs by Value (US$ Million), 2018-2023
Table 7: Kuwaiti Defense and Security Expenditure (KWD Billion & US$ Billion), 2014-2023
Table 8: Kuwaiti GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2014-2023
Table 9: Kuwaiti Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Table 10: Kuwaiti Defense Capital Expenditure, (KWD Million & US$ Billion), 2014-2023
Table 11: Kuwaiti Per Capita Defense Expenditure (US$), 2014-2023
Table 12: Terrorism Index, 2018
Table 13: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Table 14: Top Kuwaiti Defense Sectors by Value (US$ Million), 2018-2023
Table 15: Offset Regulations in Kuwait
Table 16: Competitive Landscape of the Kuwaiti Defense Industry
Table 17: Top Defense Suppliers in the Kuwaiti Defense Industry by Value (US$ Million), 2018-2023
Table 18: Lockheed Martin - Product Focus
Table 19: Lockheed Martin - Alliances
Table 20: Lockheed Martin- Recent Contract Wins
Table 21: Raytheon - Major Products
Table 22: Raytheon - Alliances
Table 23: Raytheon - Contracts
Table 24: Abu Dhabi Ship Building PJSC - Contracts
Table 25: Boeing - Product Focus
Table 26: Boeing - Alliances
Table 27: Boeing - Contracts
Table 28: Eurofighter Jagdflugzeug - Products
Table 29: Eurofighter Jagdflugzeug - Recent Contract Wins
Table 30: Airbus Helicopters - Products and Services
Table 31: Airbus Helicopters - Alliances
Table 32: Airbus Helicopters - Contract Wins
Table 33: General Dynamics - Product Focus
Table 34: General Dynamics - Alliances
Table 35: General Dynamics - Recent Contract Wins
List of Figures
Figure 1: Kuwaiti Defense and Security Expenditure (KWD Billion), 2014-2023
Figure 2: Kuwaiti Defense and Security Expenditure (US$ Billion), 2014-2023
Figure 3: Kuwaiti GDP Growth vs Defense Expenditure as a Percentage of GDP Growth, 2014-2023
Figure 4: Kuwaiti Defense Budget Split Between Capital and Revenue Expenditure (%), 2014-2023
Figure 5: Kuwaiti Defense Capital Expenditure (KWD Million), 2014-2023
Figure 6: Kuwaiti Defense Capital Expenditure (US$ Billion), 2014-2023
Figure 7: Kuwaiti Per Capita Defense Expenditure (US$), 2014-2023
Figure 8: Terrorism Heat Map, 2018
Figure 9: Terrorism Index, 2018
Figure 10: Benchmarking with Key Markets - 2014-2018 vs. 2019-2023
Figure 11: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2018 and 2023
Figure 12: Benchmarking with Large Defense Spenders as a Percentage of GDP, 2018
Figure 13: Multi-Role Aircraft Market Size (US$ Million), 2018-2023
Figure 14: Naval Vessels MRO-Corvettes Market Size (US$ Million), 2018-2023
Figure 15: Airborne C4ISR Market Size (US$ Million), 2018-2023
Figure 16: Top Kuwaiti Defense Procurements in Terms of Supplier Relationships
Figure 17: Kuwaiti Defense Import Trend, 2013-2017 (TIV values)
Figure 18: Kuwaiti Defense Imports by Country (%), 2013-2017
Figure 19: Kuwaiti Defense Imports by Weapon Category (%), 2013-2017
Figure 20: Industry Dynamics - Porter’s Five Forces Analysis
Figure 21: Lockheed Martin - Revenue Trend Analysis (US$ billion), 2013-2017
Figure 22: Lockheed Martin - Operating Profit Trend Analysis (US$ billion), 2013-2017
Figure 23: Lockheed Martin - Net Profit Trend Analysis (US$ billion), 2013-2017
Figure 24: Raytheon - Revenue Trend Analysis (US$ billion), 2013-2017
Figure 25: Raytheon - Operating Profit Trend Analysis (US$ billion), 2013-2017
Figure 26: Raytheon - Net Profit Trend Analysis (US$ billion), 2013-2017
Figure 27: General Dynamics - Revenue Trend Analysis (US$ Billion), 2013-2017
Figure 28: General Dynamics - Operating Profit Trend Analysis (US$ Billion), 2013-2017
Figure 29: General Dynamics - Net Profit Trend Analysis (US$ Billion), 2013-2017
Figure 30: Kuwaiti GDP per Capita (US$), 2015-2025
Figure 31: Kuwaiti GDP (current US$ bn), 2015-2025
Figure 32: Kuwaiti Exports of Goods and Services (Current LCU Bn), 2005-2014
Figure 33: Kuwaiti Imports of Goods and Services (Current LCU Bn), 2005-2014
Figure 34: Kuwaiti Gross National Disposable Income (US$ Bn), 2005-2013
Figure 35: Kuwaiti LCU per US$, 2015-2024
Figure 36: Kuwaiti Market Capitalization of Listed Companies (US$ Bn), 2005-2012
Figure 37: Kuwaiti Market Capitalization of Listed Companies (% of GDP), 2005-2012
Figure 38: Kuwaiti Total Government cash surplus/deficit as a Percentage of GDP, 2005-2012
Figure 39: Kuwaiti Goods Exports as a Percentage of GDP, 2005-2014
Figure 40: Kuwaiti Goods Imports as a Percentage of GDP, 2005-2014
Figure 41: Kuwaiti Services Imports as a Percentage of GDP, 2005-2014
Figure 42: Kuwaiti Services Exports as a Percentage of GDP, 2005-2014
Figure 43: Kuwaiti Net Foreign Direct Investment (US$ Bn), 2005-2014
Figure 44: Kuwaiti Net Foreign Direct Investment as a Percentage of GDP, 2005-2014
Figure 45: Mining, Manufacturing, Utilities Output (in LCU Billions), 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:
- Lockheed Martin
- Raytheon
- Abu Dhabi Ship Building (ADSB)
- Boeing
- Eurofighter Jagdflugzeug
- Airbus Helicopters
- General Dynamics
Methodology
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