Future of the Brazilian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 8

• 1.1. What is this Report About? 8
• 1.2. Definitions 8
• 1.3. Summary Methodology 10
• 1.4. About GlobalData 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 and Strategy 16
  • 3.1.3. Military Fleet Size 22
  • 3.1.4. Procurement Programs 29
  • 3.1.5. Social, Political and Economic Environment and Support for Defense Projects 33
  • 3.1.6. Political and Strategic Alliances 34
• 3.2. Defense Market Size Historical and Forecast 35
  • 3.2.1. Brazilian defense budget is expected to grow at a CAGR of 1.77% over 2019-2023 35
  • 3.2.2. Development of indigenous defense capabilities, modernization of defense systems, and large defense procurement projects are expected to boost Brazilian defense expenditure 37
  • 3.2.3. Defense budget as a percentage of GDP will remain at an average of 1.21% over the forecast period 39
• 3.3. Analysis of Defense Budget Allocation 41
  • 3.3.1. Percentage allocation towards capital expenditure to remain constant 41
  • 3.3.2. Capital expenditure is anticipated to record a CAGR of 4.81% over the forecast period 42
  • 3.3.3. The army accounted for the largest percentage share of the overall Brazilian defense budget 44
  • 3.3.4. Army to continue accounting for the lion’s share of Brazilian defense budget 46
  • 3.3.5. Brazilian per capita defense expenditure to increase over the forecast period 50
• 3.4. Homeland Security Market Size and Forecast 52
  • 3.4.1. Brazil’s homeland security market is expected to grow at a CAGR of 3.42% over the forecast period 52
  • 3.4.2. Human trafficking will drive homeland security expenditure 54
  • 3.4.3. Brazil falls under the “some risk” category on the terrorism index 55
  • 3.4.4. Brazil faces some threats from terrorist organizations 56
  • 3.4.5. Brazil has a terrorism index score of 1.6 58
• 3.5. Benchmarking with Key Global Markets 59
  • 3.5.1. Brazil ranks among major global defense markets 59
  • 3.5.2. Brazil is expected to remain among top defense spending countries in the world 61
  • 3.5.3. Brazil is expected to spend an average of 1.15% of its GDP on defense over the forecast period 62
• 3.6. Market Opportunities: Key Trends and Drivers 63
  • 3.6.1. Top Defense Market Sectors by Value (US$ Million) - Projections over 2018-2023 63
  • 3.6.2. Multirole Aircraft 64
  • 3.6.3. Diesel Electric Submarines 65
  • 3.6.4. Land-based C4ISR 66

4. Defense Procurement Market Dynamics 67

• 4.1. Import Market Dynamics 69
  • 4.1.1. Modernization of defense systems expected to drive arms imports 69
  • 4.1.2. Germany, US, and France are the major suppliers for Brazil 70
  • 4.1.3. Aircraft and armored vehicles accounted for 56.7% of Brazilian defense imports 71
• 4.2. Export Market Dynamics 72
  • 4.2.1. Development of domestic defense capability is expected to fuel exports in Brazil’s emerging military industry 72
  • 4.2.2. Indonesia and Afghanistan are the major prospects for Brazilian defense exports 73
  • 4.2.3. Aircraft accounted for the majority of Brazilian defense exports during 2013-2017 74

5. Industry Dynamics 75

• 5.1. Five Forces Analysis 75
  • 5.1.1. Bargaining Power of Supplier: Low to Medium 76
  • 5.1.2. Bargaining Power of Buyer: Medium to High 76
  • 5.1.3. Barrier to Entry: Medium 76
  • 5.1.4. Intensity of Rivalry: Low to Medium 76
  • 5.1.5. Threat of Substitution: Medium to High 76

6. Market Entry Strategy 77

• 6.1. Market Regulation 77
  • 6.1.1. International and domestic defense procurement deals are primarily decided by competitive bidding 77
  • 6.1.2. Stringent offset requirements for all defense procurements 78
• 6.2. Market Entry Route 79
  • 6.2.1. Budgeting Process 79
  • 6.2.2. Procurement Policy and Process 80
  • 6.2.3. Foreign OEMs follow direct offset route to enter defense market 81
  • 6.2.4. Collaborations provide market entry opportunities 81
• 6.3. Key Challenges 82
  • 6.3.1. Low allocation for defense capital expenditure and delay in the closure of defense deals are the major challenges of the Brazilian defense industry 82
  • 6.3.2. Complying with Brazil’s requirement for extensive technology transfer 82

7. Competitive Landscape and Strategic Insights 83

• 7.1. Competitive Landscape Overview 83
• 7.2. Key Public Sector Companies 85
  • 7.2.1. Embraer: Overview 85
  • 7.2.2. Embraer: Products 85
  • 7.2.3. Embraer: Recent Announcements and Strategic Initiatives 85
  • 7.2.4. Embraer: Alliances 86
  • 7.2.5. Embraer: Recent Contract Wins 88
  • 7.2.6. Embraer: Financial Analysis 89
  • 7.2.7. Forjas Taurus SA: Overview 91
  • 7.2.8. Forjas Taurus SA: Products 92
  • 7.2.9. Forjas Taurus SA: Recent Announcements and Strategic Initiatives 93
  • 7.2.10. Forjas Taurus SA: Alliances 94
  • 7.2.11. Forjas Taurus SA: Recent Contract Wins 94
  • 7.2.12. Forjas Taurus SA: Financial Analysis 95
  • 7.2.13. Avibras Industria Aerospacial: Overview 97
  • 7.2.14. Avibras Industria Aeroespacial: Products 97
  • 7.2.15. Avibras Industria Aerospacial: Recent Announcements and Strategic Initiatives 98
  • 7.2.16. Avibras Industria Aerospacial: Alliances 98
  • 7.2.17. Avibras Industria Aerospacial: Recent Contract Wins 99
  • 7.2.18. Companhia Brasileira de Cartuchos: Overview 100
  • 7.2.19. Companhia Brasileira de Cartuchos: Products 100
  • 7.2.20. Companhia Brasileira de Cartuchos: Recent Announcements and Strategic Initiatives 101
  • 7.2.21. Companhia Brasileira de Cartuchos: Recent Contract Wins 102
  • 7.2.22. Helibras: Overview 103
  • 7.2.23. Helibras: Products 103
  • 7.2.24. Helibras: Recent Announcements and Strategic Initiatives 103
  • 7.2.25. Helibras: Alliances 104
  • 7.2.26. Helibras: Recent Contract Wins 105
  • 7.2.27. Industria de Material Belico do Brasil (IMBEL): Overview 106
  • 7.2.28. Industria de Material Belico do Brasil (IMBEL): Products 106
  • 7.2.29. Industria de Material Belico do Brasil (IMBEL): Recent Announcements and Strategic Initiatives 108
  • 7.2.30. Industria de Material Belico do Brasil (IMBEL): Alliances 108
  • 7.2.31. Industria de Material Belico do Brasil (IMBEL): Recent Contract Wins 109
  • 7.2.32. Aeroelectronica: Overview 110
  • 7.2.33. Aeroelectronica: Products 110
  • 7.2.34. Aeroelectronica: Recent Announcements and Strategic Initiatives 111
  • 7.2.35. Aeroelectronica: Alliances 111
  • 7.2.36. Aeroelectronica: Recent Contract Wins 112
  • 7.2.37. Indústria Naval do Ceará: Overview 113
  • 7.2.38. Indústria Naval do Ceará: Products 113
  • 7.2.39. Indústria Naval do Ceará: Recent Announcements and Strategic Initiatives 113
  • 7.2.40. Indústria Naval do Ceará: Recent Contract Wins 114
  • 7.2.41. Northrop Grumman Brazil: Overview 115
  • 7.2.42. Northrop Grumman Brazil: Products 115
  • 7.2.43. Northrop Grumman Brazil: Recent Announcements and Strategic Initiatives 115
  • 7.2.44. Northrop Grumman Brazil: Alliances 116
  • 7.2.45. Northrop Grumman Brazil: Recent Contract Wins 116
  • 7.2.46. Lockheed Martin Brazil: Overview 117
  • 7.2.47. Lockheed Martin Brazil: Products 117
  • 7.2.48. Lockheed Martin Brazil: Recent Announcements and Strategic Initiatives 117
  • 7.2.49. Lockheed Martin Brazil: Alliances 117
  • 7.2.50. Lockheed Martin Brazil: Recent Contract Wins 118

8. Business Environment and Country Risk 119

• 8.1. Economic Performance 119
  • 8.1.1. GDP Per Capita at Constant Prices 119
  • 8.1.2. GDP at Current Prices 120
  • 8.1.3. Exports of Goods and Services 121
  • 8.1.4. Imports of Goods and Services 122
  • 8.1.5. Gross National Disposable Income 123
  • 8.1.6. BRL per US$ (Period Average) 124
  • 8.1.7. Market Capitalization of Listed Companies 125
  • 8.1.8. Market Capitalization of Listed Companies as a Percentage of GDP 126
  • 8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP 127
  • 8.1.10. Goods Exports and Imports as a Percentage of GDP 128
  • 8.1.11. Services Exports and Imports as a Percentage of GDP 129
  • 8.1.12. Foreign Direct Investment, net (BoP, current US$ Billion) 130
  • 8.1.13. Net Foreign Direct Investment as a Percentage of GDP 131
  • 8.1.14. Mining, Manufacturing, Utilities Output (BRL Billion) 132

9. Appendix 133

• 9.1. About GlobalData 133