Future of the Omani Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024
Summary
Omani military expenditure is US$9 billion in 2019, and registered a CAGR of -2.39% during 2015-2019. The defense spending in the Middle East has declined over the past year, despite a string of ongoing conflicts across the region, including in Syria, Iraq, Yemen and Libya. The decline in the defense budget during the historical period is primarily due to the country’s heavy reliance on oil and gas revenues to fund its expensive defense modernization programs.
However, with Brent crude supplies expected to come under strain, owing to sanctions on Iran and disruption in the production of Venezuelan and Libyan oil, oil prices are likely to touch US$90 per barrel. As a consequence, an increase in the oil prices is projected to enable Oman to earmark greater resources to its defense sector. Oman’s defense expenditure is expected to grow at a CAGR of 0.56% during the forecast period to reach US$9.3 billion by 2024. As a percentage of GDP, the country’s defense budget is expected to decrease from an average of 12.3% during 2015-2019 to an average of 9.9% during the forecast period.
Oman is anticipated to focus on modernizing the capability of its armed forces to keep pace with its neighbors such as the UAE, Saudi Arabia, and Bahrain. Also, an arms race in the region, which has now intensified owing to the growing turbulence in countries such as Syria and Yemen, is expected to drive the country’s defense expenditure during the forecast period. The country’s capital expenditure allocation, which stood at an average of 40.1% during the historical period, is projected to increase at an average of 41.3% during 2020-2024, primarily due to the country’s procurement of advanced defense equipment.
Among the major procurements are multirole aircraft, missile defense systems, armored vehicles, and military rotorcraft. Oman is expected to remain as one of the biggest buyers of defense equipment globally over the coming decade. Investment into strengthening naval and air defense capabilities is expected to drive defense imports. Oman’s defense imports continued to increase during 2013 and 2014, but declined drastically in 2015 owing to the paucity of new procurement deals signed during that year. However, defense imports managed to recover in 2016 and continued to increase in 2017.
During 2013-2017, aircraft accounted for the largest defense expenditure, with the UK being the largest supplier. Other significant import partners include the US, Norway, Spain, France, Singapore, the Netherlands, Australia, Turkey, Germany, Italy, Canada and Denmark. Naval vessels, missiles, air defense systems, sensors, engines, armored vehicles, and naval weapons were the other key imports during 2013-2017.
The report "Future of the Omani Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024", 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 -
Companies mentioned: BAE Systems, Lockheed Martin, NH Industries (NHI), Raytheon, FNSS Defense Systems and Bell
Scope
Reasons to Buy
Summary
Omani military expenditure is US$9 billion in 2019, and registered a CAGR of -2.39% during 2015-2019. The defense spending in the Middle East has declined over the past year, despite a string of ongoing conflicts across the region, including in Syria, Iraq, Yemen and Libya. The decline in the defense budget during the historical period is primarily due to the country’s heavy reliance on oil and gas revenues to fund its expensive defense modernization programs.
However, with Brent crude supplies expected to come under strain, owing to sanctions on Iran and disruption in the production of Venezuelan and Libyan oil, oil prices are likely to touch US$90 per barrel. As a consequence, an increase in the oil prices is projected to enable Oman to earmark greater resources to its defense sector. Oman’s defense expenditure is expected to grow at a CAGR of 0.56% during the forecast period to reach US$9.3 billion by 2024. As a percentage of GDP, the country’s defense budget is expected to decrease from an average of 12.3% during 2015-2019 to an average of 9.9% during the forecast period.
Oman is anticipated to focus on modernizing the capability of its armed forces to keep pace with its neighbors such as the UAE, Saudi Arabia, and Bahrain. Also, an arms race in the region, which has now intensified owing to the growing turbulence in countries such as Syria and Yemen, is expected to drive the country’s defense expenditure during the forecast period. The country’s capital expenditure allocation, which stood at an average of 40.1% during the historical period, is projected to increase at an average of 41.3% during 2020-2024, primarily due to the country’s procurement of advanced defense equipment.
Among the major procurements are multirole aircraft, missile defense systems, armored vehicles, and military rotorcraft. Oman is expected to remain as one of the biggest buyers of defense equipment globally over the coming decade. Investment into strengthening naval and air defense capabilities is expected to drive defense imports. Oman’s defense imports continued to increase during 2013 and 2014, but declined drastically in 2015 owing to the paucity of new procurement deals signed during that year. However, defense imports managed to recover in 2016 and continued to increase in 2017.
During 2013-2017, aircraft accounted for the largest defense expenditure, with the UK being the largest supplier. Other significant import partners include the US, Norway, Spain, France, Singapore, the Netherlands, Australia, Turkey, Germany, Italy, Canada and Denmark. Naval vessels, missiles, air defense systems, sensors, engines, armored vehicles, and naval weapons were the other key imports during 2013-2017.
The report "Future of the Omani Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2024", 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 Omani defense industry market size and drivers: detailed analysis of the Omani defense industry during 2020-2024, 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 Omani 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 Omani 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: BAE Systems, Lockheed Martin, NH Industries (NHI), Raytheon, FNSS Defense Systems and Bell
Scope
- Omani military expenditure is US$9 billion in 2019, and registered a CAGR of -2.39% during 2015-2019. The defense spending in the Middle East has declined over the past year, despite a string of ongoing conflicts across the region, including in Syria, Iraq, Yemen and Libya. The decline in the defense budget during the historical period is primarily due to the country’s heavy reliance on oil and gas revenues to fund its expensive defense modernization programs.
- During 2015-2019, an average of 40.1% of the country’s total defense budget was allocated to capital expenditure, while an average of 59.9% was reserved for revenue expenditure. An increase in capital expenditure during the forecast period is primarily due to the country’s procurement plans for multirole aircraft, missile defense systems, armored vehicles, and military rotorcraft.
- The MoD is expected to invest in Land-based physical security of critical infrastructure, land based C4ISR and infrastructure construction.
Reasons to Buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Omani 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 Omani 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. Introduction1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About the Author
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 and Strategy
3.1.3. Equipment Acquisition
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 Expenditure Expected to Grow at a CAGR of 0.56% during 2020-2024
3.2.2. Arms Race in the Middle East Expected to Drive Defense Expenditure over the Forecast Period
3.2.3. Defense Expenditure as a Percentage of GDP is Expected to Increase over the Forecast Period
3.3. Analysis of Defense Budget Allocation
3.3.1. Capital Expenditure Allocation Expected to Increase during the Forecast Period
3.3.2. Omani Defense Capital Expenditure to Value US$3.8 billion in 2024
3.3.3. Per Capita Defense Expenditure Expected to Decline over the Forecast Period
3.4. Homeland Security Market Size and Forecast
3.4.1. Maritime Oil Trade Routes Protection will be the Key Factor Driving Homeland Security
3.5. Benchmarking with Key Global Markets
3.5.1. Omani Defense Expenditure Expected to Remain Low Compared to Leading Spenders
3.5.2. The Country’s Defense Budget is Low Compared to Middle Eastern Countries
3.5.3. Oman Tops the Leading Military Spenders in Terms of Defense Expenditure as a Percentage of GDP
3.6. Market Opportunities: Key Trends
3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2019-2024
3.6.2. Critical Infrastructure Protection (CIP) - Physical Security
3.6.3. C4ISR - Land-based
3.6.4. Military Infrastructure and Logistics - Infrastructure Construction
4. Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. The Defense Industry Heavily Relies on Imports from Foreign Countries
4.1.2. The US and the UK Were the Key Defense Suppliers to Oman
4.1.3. Aircraft and Ships Dominate Omani Defense Imports
4.2. Export Market Dynamics
4.2.1. Oman’s defense export market is negligible
5. Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power of Supplier: Medium to High
5.1.2. Bargaining Power of Buyer: Medium
5.1.3. Barrier to Entry: Medium
5.1.4. Intensity of Rivalry: Medium to High
5.1.5. Threat of Substitution: Medium to High
6. Market Entry Strategy
6.1. Market Regulation
6.1.1. The Omani government allows 49% FDI in the defense industry
6.1.2. Oman prefers indirect offsets
6.2. Market Entry Route
6.2.1. Budgeting Process
6.2.2. Procurement Policy and Process
6.2.3. Direct selling is the preferred market entry route for foreign OEMs
6.3. Key Challenges
6.3.1. The UK and the US dominate the market, posing challenges to other foreign firms
6.3.2. Lack of industrial capabilities
7. Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.1.1. Omani defense sector is dominated by foreign competitors
7.1.2. Oman Market Share Analysis, 2019-2024
7.2. Key Foreign Companies
7.2.1. BAE Systems Plc: Overview
7.2.2. BAE Systems Plc: Products and Services
7.2.3. BAE Systems Plc: Alliances
7.2.4. BAE Systems Plc: Recent Contract Wins
7.2.5. BAE Systems Plc: financial analysis
7.2.6. Lockheed Martin: Overview
7.2.7. Lockheed Martin: Products
7.2.8. Lockheed Martin: Recent Announcements and Strategic Initiatives
7.2.9. Lockheed Martin: Alliances
7.2.10. Lockheed Martin: Recent Contract Wins
7.2.11. Lockheed Martin: Financial Analysis
7.2.12. NHIndustries (NHI): Overview
7.2.13. NHIndustries (NHI): Products and Services
7.2.14. NHIndustries (NHI): Recent Announcements and Strategic Initiatives
7.2.15. NHIndustries (NHI): Recent Contract Wins
7.2.16. Raytheon: Overview
7.2.17. Raytheon: Products
7.2.18. Raytheon: Recent Announcements and Strategic Initiatives
7.2.19. Raytheon: Alliances
7.2.20. Raytheon: Financial Analysis
7.2.21. FNSS Defense Systems Co.: Overview
7.2.22. FNSS Defense Systems Co.: Products
7.2.23. FNSS Defense Systems Co.: Recent Announcements and Strategic Initiatives
7.2.24. FNSS Defense Systems: Alliances
7.2.25. FNSS Defense Systems Co.: Recent Contract Wins
7.2.26. Bell: Overview
7.2.27. Bell: Products and Services
7.2.28. Bell: recent announcements and strategic initiatives
7.2.29. Bell Helicopter Textron, Inc.: alliances
7.2.30. Bell Helicopter Textron, Inc.: recent contract wins
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 (OMR Billion)
8.1.4. Imports of Goods and Services (OMR Billion)
8.1.5. Gross National Disposable Income
8.1.6. OMR per US$ (Period Average)
8.1.7. Market Capitalization of Listed Companies
8.1.8. Market Capitalization of Listed Companies as a Percentage of 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: Oman, Army Strength, 2019
- Table 2: Oman, Air Force Strength, 2019
- Table 3: Oman, Navy Strength, 2019
- Table 4: Oman, Ongoing Development and Procurement Programs, 2019
- Table 5: Oman, Future Procurement Programs, 2019
- Table 6: Oman, Top Defense Procurement Programs by Value (US$ Million), 2019-2024
- Table 7: Oman, Defense Expenditure (OMR Billion and US$ Billion), 2015-2024
- Table 8: Oman, GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
- Table 9: Oman, Defense Budget Allocation for Capital and Revenue Expenditure (%), 2015-2024
- Table 10: Oman, Defense Capital Expenditure (OMR Billion and US$ Billion), 2015-2024
- Table 11: Oman, Defense Expenditure as Per Capita Defense Spend (US$), 2015-2024
- Table 12: Benchmarking with Key Markets, 2015-2019 vs. 2020-2024
- Table 13: Top Omani Defense Sectors by Value (US$ Million), 2019-2024
- Table 14: Competitive Landscape of the Omani Defense Industry
- Table 15: Top Defense Suppliers in the Omani Defense Industry by Value (US$ Million), 2019-2024
- Table 16: BAE Systems Plc - Products and Services
- Table 17: BAE Systems Plc - Alliances
- Table 18: BAE Systems Plc - Recent Contract Wins
- Table 19: Lockheed Martin - Products
- Table 20: Lockheed Martin - Alliances
- Table 21: Lockheed Martin - Recent Contract Wins
- Table 22: NHIndustries (NHI) - Products and Services
- Table 23: Lockheed Martin - Recent Contract Wins
- Table 24: Raytheon - Products
- Table 25: Raytheon - Alliances
- Table 26: Raytheon - Recent Contract Wins
- Table 27: FNSS Defense Systems Co. - Products
- Table 28: FNSS Defense Systems - Alliances
- Table 29: FNSS Defense Systems Co. - Recent Contract Wins
- Table 30: Bell - Product Focus
- Table 31: Bell Helicopter Textron, Inc. - Alliances
- Table 32: Bell Helicopter Textron, Inc. - Recent Contract Wins
List of Figures
- Figure 1: Oman, Defense Budget, 2020 and 2024
- Figure 2: Oman, Defense Imports/Exports, 2014 and 2018
- Figure 3: Oman, Top Four Prospective Procurements/Developments
- Figure 4: Oman, National Security Threats
- Figure 5: Oman, Partnering Countries for Defense Cooperation and Military Training
- Figure 6: Oman, Defense Expenditure (OMR Billion), 2015-2024
- Figure 7: Oman, Defense Expenditure (US$ Billion), 2015-2024
- Figure 8: Oman, GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2015-2024
- Figure 9: Oman, Defense Budget Split Between Capital and Revenue Expenditure (%), 2015-2024
- Figure 10: Oman, Defense Capital Expenditure (OMR Billion), 2015-2024
- Figure 11: Oman, Defense Capital Expenditure (US$ Billion), 2015-2024
- Figure 12: Oman, Per Capita Defense Expenditure (US$), 2015-2024
- Figure 13: Benchmarking with Key Markets, 2015-2019 vs. 2020-2024
- Figure 14: Benchmarking with World’s Largest Defense Spenders (US$ Billion), 2019 and 2024
- Figure 15: Benchmarking with Large Defense Spenders as a Percentage of GDP - 2019
- Figure 16: Critical Infrastructure Protection (CIP) - Physical Security Market Size (US$ Million), 2019-2024
- Figure 17: C4ISR Land-Based Security Market Size (US$ Million), 2019-2024
- Figure 18: Military Infrastructure and Logistics - Infrastructure Construction Market Size (US$ Million), 2019-2024
- Figure 19: Top Omani Defense Procurements in Terms of Supplier Relationships
- Figure 20: Omani Defense Import Trend, 2014-2018 (TIV values)
- Figure 21: Omani Defense Imports by Country (%), 2014-2018
- Figure 22: Omani Defense Imports by Weapon Category (%), 2014-2018
- Figure 23: Industry Dynamics - Porter’s Five Forces Analysis
- Figure 24: Key Challenges in Omani Defense Market
- Figure 25: Oman Market Share Analysis, 2019-2024
- Figure 26: BAE Systems - Revenue Trend Analysis (GBP Billion), 2013-2017
- Figure 27: BAE Systems - Operating Profit Trend Analysis (GBP Billion), 2013-2017
- Figure 28: BAE Systems - Net Profit Trend Analysis (GBP billion), 2013-2017
- Figure 29: Lockheed Martin - Revenue Trend Analysis (US$ Billion), 2013-2017
- Figure 30: Lockheed Martin - Operating Profit Trend Analysis (US$ Billion), 2013-2017
- Figure 31: Lockheed Martin - Net Profit Trend Analysis (US$ Billion), 2013-2017
- Figure 32: Raytheon - Revenue Trend Analysis (US$ billion), 2013-2017
- Figure 33: Raytheon - Operating Profit Trend Analysis (US$ billion), 2013-2017
- Figure 34: Raytheon - Net Profit Trend Analysis (US$ billion), 2013-2017
- Figure 35: Omani GDP per Capita (US$), 2015-2025
- Figure 36: Omani GDP (current US$ Billion), 2015-2025
- Figure 37: Omani Exports of Goods and Services (OMR Billion), 2005-2014
- Figure 38: Omani Imports of Goods and Services (OMR Billion), 2005-2014
- Figure 39: Omani Gross National Disposable Income (US$ Bn), 2005-2013
- Figure 40: Oman OMR per US$, 2015-2024
- Figure 41: Omani Market Capitalization of Listed Companies (US$ Bn), 2005-2012
- Figure 42: Omani Market Capitalization of Listed Companies (% of GDP), 2005-2012
- Figure 43: Omani Total Government Cash Surplus/Deficit (% of GDP), 2005-2012
- Figure 44: Omani Goods Exports (% of GDP), 2005-2013
- Figure 45: Omani Goods Imports (% of GDP), 2005-2013
- Figure 46: Omani Services Imports (% of GDP), 2005-2013
- Figure 47: Omani Services Exports (% of GDP), 2005-2013
- Figure 48: Omani Net Foreign Direct Investment (US$ Billion), 2005-2013
- Figure 49: Omani Net Foreign Direct Investment (% of GDP), 2005-2012
- Figure 50: Mining, Manufacturing, Utilities Output (OMR Billion), 2005-2014
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- BAE Systems
- Lockheed Martin
- NHIndustries (NHI)
- Raytheon
- FNSS Defense Systems
- Bell
