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

Table of Contents

1. Introduction 7

• 1.1. What is this Report About? 7
• 1.2. Definitions 7
• 1.3. Summary Methodology 9
• 1.4. About GlobalData 10

2. Executive Summary 11

3. Market Attractiveness and Emerging Opportunities 13

• 3.1. Current Market Scenario 14
  • 3.1.1. Primary Threat Perception 14
  • 3.1.2. Military Doctrine and Strategy 15
  • 3.1.3. Military Fleet Size 16
  • 3.1.4. Procurement Programs 20
  • 3.1.5. Social, Political and Economic Environment and Support for Defense Projects 21
  • 3.1.6. Political and Strategic Alliances 22
• 3.2. Defense Market Size Historical and Forecast 23
  • 3.2.1. Defense expenditure to grow at a CAGR of 2.12% over the forecast period 23
  • 3.2.2. Threat of narco-terrorism, defense reforms and modernization, border disputes, and peacekeeping operations to drive defense expenditure 25
  • 3.2.3. Defense budget as a percentage of GDP is anticipated to average 0.9% during the forecast period 27
• 3.3. Analysis of Defense Budget Allocation 29
  • 3.3.1. Revenue expenditure accounts for the majority of the Peruvian defense budget 29
  • 3.3.2. Peruvian defense capital expenditure is expected to grow at a CAGR of 3.48% during the forecast period 31
  • 3.3.3. Per capita defense expenditure expected to increase during the forecast period 34
• 3.4. Homeland Security Market Size and Forecast 36
  • 3.4.1. Homeland security expenditure is expected to grow at a CAGR of 5.32% during the forecast period 36
  • 3.4.2. Measures to prevent cocaine trafficking and organized crime to drive HLS expenditure 39
  • 3.4.3. Peru considered at ‘moderate risk’ of a terrorist attack 41
  • 3.4.4. Peru experiences moderate levels of terrorist activity 42
  • 3.4.5. Peru has a terrorism index score of 2.5 44
• 3.5. Benchmarking with Key Global Markets 45
  • 3.5.1. Peruvian defense budget expected to register marginal growth over the forecast period 45
  • 3.5.2. Peru’s military expenditure is limited compared to countries with the largest defense expenditure 47
  • 3.5.3. Peru allocates a low percentage of GDP to defense 48
• 3.6. Market Opportunities: Key Trends and Growth Stimulators 49
  • 3.6.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023 49
  • 3.6.2. Transport Aircraft 50
  • 3.6.3. Frigates 51
  • 3.6.4. Multi-role Aircraft 52

4. Defense Procurement Market Dynamics 53

• 4.1. Import Market Dynamics 55
  • 4.1.1. Defense imports expected to increase during the forecast period 55
  • 4.1.2. South Korea to account for the majority of Peru’s defense imports during the forecast period 56
  • 4.1.3. Aircraft and Naval Vessels are the most imported military hardware 58

5. Industry Dynamics 59

• 5.1. Five Forces Analysis 59
  • 5.1.1. Bargaining Power of Supplier: Low to Medium 60
  • 5.1.2. Bargaining Power of Buyer: Medium to High 60
  • 5.1.3. Barriers to Entry: Medium 60
  • 5.1.4. Intensity of Rivalry: Medium to High 60
  • 5.1.5. Threat of Substitution: Medium to High 60

6. Market Entry Strategy 61

• 6.1. Market Regulation 61
  • 6.1.1. Budgeting process 61
  • 6.1.2. Procurement Policy and Process 61
  • 6.1.3. Offset policy aids development of domestic defense industry 62
  • 6.1.4. Peru allows 100% FDI in the defense industry 62
• 6.2. Market Entry Route 63
  • 6.2.1. The country’s biennial defense exhibition provides an attractive entry route 63
  • 6.2.2. Direct selling is the preferred market entry route for foreign OEMs 64
• 6.3. Key Challenges 65
  • 6.3.1. Small defense budget and limited technological capability limits the market entry of foreign companies 65
  • 6.3.2. Lack of transparency hampers the growth of the Peruvian defense industry 65

7. Competitive Landscape and Strategic Insights 66

• 7.1. Competitive Landscape Overview 66
• 7.2. Key Domestic Companies 68
  • 7.2.1. Los Servicios Industriales de la Marina (SIMA): Overview 68
  • 7.2.2. Los Servicios Industriales de la Marina (SIMA): Products and Services 68
  • 7.2.3. Los Servicios Industriales de la Marina (SIMA): Recent Announcements and Strategic Initiatives 69
  • 7.2.4. Los Servicios Industriales de la Marina (SIMA): Alliances 69
  • 7.2.5. Los Servicios Industriales de la Marina (SIMA): Recent Contract Wins 69
  • 7.2.6. The Army Ammunition Factory (FAME): Overview 70
  • 7.2.7. The Army Ammunition Factory (FAME): Products and Services 70
  • 7.2.8. The Army Ammunition Factory (FAME): Recent Announcements and Strategic Initiatives 71
  • 7.2.9. Desarrollos Industriales Casanave: Overview 72
  • 7.2.10. Desarrollos Industriales Casanave: Products and Services 72
  • 7.2.11. Desarrollos Industriales Casanave: Recent Announcements and Strategic Initiatives 73
  • 7.2.12. Desarrollos Industriales Casanave: Alliances 73

8. Business Environment and Country Risk 74

• 8.1. Economic Performance 74
  • 8.1.1. GDP Per Capita (US$) 74
  • 8.1.2. GDP, Current Prices (US$ Billion) 75
  • 8.1.3. Exports of Goods and Services, Current Prices (LCU billion) 76
  • 8.1.4. Imports of Goods and Services, Current Prices (LCU billion) 77
  • 8.1.5. Gross National Disposable Income (US$ billion) 78
  • 8.1.6. Local Currency Unit per US$ (Period Average) 79
  • 8.1.7. Market Capitalization of Listed Companies (US$ Billion) 80
  • 8.1.8. Market Capitalization of Listed Companies (% of GDP) 81
  • 8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP (LCU) 82
  • 8.1.10. Goods Exports as a Percentage of GDP 83
  • 8.1.11. Goods Imports as a Percentage of GDP 84
  • 8.1.12. Services Imports as a Percentage of GDP 85
  • 8.1.13. Services Exports as a Percentage of GDP 86
  • 8.1.14. Foreign Direct Investment, net (BoP, current US$ Billion) 87
  • 8.1.15. Net Foreign Direct Investment as a Percentage of GDP 88
  • 8.1.16. Mining, Manufacturing, Utilities Output LCU Billion 89

9. Appendix 90

• 9.1. About GlobalData 90