Future of the Ukrainian 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 & Strategy 18
  • 3.1.3. Military Fleet Size 21
  • 3.1.4. Procurement Programs 27
  • 3.1.5. Social, Political and Economic Environment & Support for Defense Projects 29
  • 3.1.6. Political and Strategic Alliances 30
  • 3.1.7. Ukraine’s defense expenditure to register a CAGR of 19.53% over 2019-2023 31
  • 3.1.8. Threat from Russia, coupled with threats of protracted insurgency in Donbass, will continue to drive Ukrainian defense expenditure 33
  • 3.1.9. The defense budget as a percentage of GDP is expected to be 5% over the forecast period 37
• 3.2. Analysis of Defense Budget Allocation 39
  • 3.2.1. The majority of Ukraine’s defense budget is earmarked for revenue expenditure 39
  • 3.2.2. Capital expenditure forecast to increase at a CAGR of 23.61% over 2019-2023 41
  • 3.2.3. Per capita defense expenditure expected to increase over the forecast period 43
• 3.3. Homeland Security Market Size and Forecast 45
  • 3.3.1. Ukrainian homeland security market expected to grow at a CAGR of 18.06% over the forecast period 45
  • 3.3.2. Measures to curb illegal activities such as drug trafficking, human trafficking, and organized crime to drive homeland security expenditure over the forecast period 47
  • 3.3.3. Ukraine is “highly affected” by terrorism 49
  • 3.3.4. Ukraine faces a high level of threat from terrorist organizations 50
  • 3.3.5. Ukraine has a terrorism index score of 6.6 52
• 3.4. Benchmarking with Key Global Markets 53
  • 3.4.1. Ukraine to be one of the largest defense spenders in the Eastern Europe 53
  • 3.4.2. The US has the largest defense expenditure in the world 55
  • 3.4.3. Ukrainian defense expenditure expected to reach 4.4% of GDP by 2023 56
• 3.5. Market Opportunities: Key Trends and Growth Stimulators 57
  • 3.5.1. Top 10 Defense Sectors by Value (US$ Million) - Projections over 2018-2023 57
  • 3.5.2. Transport Aircraft 58
  • 3.5.3. Land-based C4ISR 59
  • 3.5.4. Critical Infrastructure Protection - Physical Security 60

4. Defense Procurement Market Dynamics 61

• 4.1. Import Market Dynamics 63
  • 4.1.1. A relatively small defense budget limits Ukraine’s defense imports 63
  • 4.1.2. Canada accounted for 47.4% of Ukrainian defense imports during 2013-2017 64
  • 4.1.3. Armored vehicles accounted for the majority of Ukrainian defense imports 65
• 4.2. Export Market Dynamics 66
  • 4.2.1. Ukraine exports a major portion of its domestic defense production 66
  • 4.2.2. Russia, China, and Thailand emerged as the largest importers of Ukrainian defense equipment 67
  • 4.2.3. Missiles, sensors and air defense systems were the most exported defense goods 68

5. Industry Dynamics 69

• 5.1. Five Forces Analysis 69
  • 5.1.1. Bargaining Power of Supplier: Low-Medium 70
  • 5.1.2. Bargaining Power of Buyer: Low 70
  • 5.1.3. Barrier to Entry: Medium to High 70
  • 5.1.4. Intensity of Rivalry: Low to Medium 70
  • 5.1.5. Threat of Substitution: High 70

6. Market Entry Strategy 71

• 6.1. Market Regulation 71
  • 6.1.1. Defense sector liberalization bodes well for domestic defense industry 71
• 6.2. Market Entry Route 72
  • 6.2.1. Budgeting Process 72
  • 6.2.2. Procurement Policy and Process 73
  • 6.2.3. Joint development of defense goods provides investors with a market entry opportunity 73
  • 6.2.4. Foreign investors can enter the industry through direct sales 73
• 6.3. Key Challenges 74
  • 6.3.1. Small defense budget offers equipment manufacturers limited investment potential 74
  • 6.3.2. Lack of necessary infrastructure impedes growth of domestic defense industry 74
  • 6.3.3. Corruption and a lack of transparency discourages investors from entering the market 75

7. Competitive Landscape and Strategic Insights 76

• 7.1. Competitive Landscape Overview 76
  • 7.1.1. Domestic companies fulfill the majority of Ukrainian defense requirements 78

8. Competitive Landscape and Strategic Insights 79

• 8.1. Key Foreign Companies 79
  • 8.1.1. Raytheon: Overview 79
  • 8.1.2. Raytheon: Products 79
  • 8.1.3. Raytheon: Recent Announcements and Strategic Initiatives 80
  • 8.1.4. Raytheon: Alliances 80
• 8.2. Key Public Companies 81
  • 8.2.1. Antonov ASTC: overview 81
  • 8.2.2. Antonov ASTC: products and services 81
  • 8.2.3. Antonov ASTC: recent announcements and strategic initiatives 82
  • 8.2.4. Antonov ASTC: alliances 83
  • 8.2.5. Antonov ASTC: recent contract wins 83
  • 8.2.6. RPC Fort: overview 84
  • 8.2.7. RPC Fort: products 84
  • 8.2.8. RPC Fort: alliances 85
  • 8.2.9. RPC Fort: recent contract wins 85
  • 8.2.10. KMDB: overview 86
  • 8.2.11. KMDB: products 86
  • 8.2.12. KMDB: recent announcements and strategic initiatives 86
  • 8.2.13. KMDB: recent contract wins 87
  • 8.2.14. Malyshev Plant: overview 88
  • 8.2.15. Malyshev Plant: products 88
  • 8.2.16. Malyshev Plant: recent announcements and strategic initiatives 88
  • 8.2.17. Malyshev Plant: recent contract wins 89
  • 8.2.18. AvtoKrAZ Holding Company: overview 90
  • 8.2.19. AvtoKrAZ Holding Company: products 90
  • 8.2.20. AvtoKrAZ Holding Company: recent announcements and strategic initiatives 90
  • 8.2.21. AvtoKrAZ Holding Company: recent contract wins 91
  • 8.2.22. Motor Sich: overview 92
  • 8.2.23. Motor Sich: products and services 92
  • 8.2.24. Motor Sich: recent announcements and strategic initiatives 94
  • 8.2.25. Motor Sich: alliances 94
  • 8.2.26. Motor Sich: recent contract wins 95

9. Business Environment and Country Risk 96

• 9.1. Economic Performance 96
  • 9.1.1. GDP Per Capita 96
  • 9.1.2. GDP, Current Prices 97
  • 9.1.3. Export of Goods and Services (LCU Billion) 98
  • 9.1.4. Import of Goods and Services (LCU Billion) 99
  • 9.1.5. Local Currency Unit per US Dollar 100
  • 9.1.6. Market Capitalization of Listed Companies 101
  • 9.1.7. Market Capitalization of Listed Companies (% of GDP) 102
  • 9.1.8. Government Cash Surplus/Deficit as a Percentage of GDP 103
  • 9.1.9. Goods exports as a Percentage of GDP 104
  • 9.1.10. Goods imports as a Percentage of GDP 105
  • 9.1.11. Service Imports as a Percentage of GDP 106
  • 9.1.12. Service Exports as a Percentage of GDP 107
  • 9.1.13. Foreign Direct Investment 108
  • 9.1.14. Net Foreign Direct Investment as a Percentage of GDP 109
  • 9.1.15. Mining, Manufacturing, Utilities Output (LCU Bn) 110

10. Appendix 111

• 10.1. About GlobalData 111