Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

Spanning over 109 pages this report provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, key news and also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas. 

Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain a market share in the Chilean defense industry.

What is the current market landscape and what is changing?

After witnessing a decline at a CAGR of -2.06% during the review period, Chilean defense expenditure is valued at US$2.7 billion in 2013. The drastic fall in expenditure in 2012 was due to the transfer of the Carabineros de Chile and Investigations Police of Chile to the Ministry of Interior and Public Security (MoIPS) in 2011. During the forecast period, the country's defense expenditure is expected to continue growing, with a CAGR of 8.67%, to reach US$4.0 billion by 2018.

What are the key drivers behind recent market changes?

Border disputes and military modernization to drive defense expenditure.

What makes this report unique and essential to read?

The Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, including highlights of key growth stimulators. It also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.

Key Features and Benefits

• The report provides detailed analysis of the current industry size and growth expectations from 2014 to 2018, including highlights of key growth stimulators, and also benchmarks the industry against key global markets and provides a detailed understanding of emerging opportunities in specific areas.
• The report includes trend analysis of imports and exports, together with their implications and impact on the Chilean defense industry.
• The report covers five forces analysis to identify various power centers in the industry and how these are expected to develop in the future.
• The report allows readers to identify possible ways to enter the market, together with detailed descriptions of how existing companies have entered the market, including key contracts, alliances, and strategic initiatives.
• The report helps the reader to understand the competitive landscape of the defense industry in Chile. It provides an overview of key defense companies, both domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

Key Market Issues

• The Chile defense procurement. In 2011, the new law replaced CRL funds with the Economic and Social Stabilization Fund (ESSF), which resulted in a reduction in the defense budget for 2012. An initiative in 2010 included a contingency fund to provide further resources in exceptional circumstances, such as the major reconstruction program following the devastating earthquake of February 2010, which has been the cause for much debatean Copper Reserve Law (CRL), initially imposed in 1958 as a 15% tax on mining profits, changed to a 10% tax on total sales from the state-run copper exporter Codelco in 1973. This law has resulted in a large amount of cash being injected into the Chilean armed forces, facilitating large-scale, with both sides finding support.
• The Chilean economy has begun to recover from the 2010 earthquake and tsunami crisis which caused damage worth US$30 billion disturbing all the sectors in the economy. To counter the mounting deficit and public debt, the government is cutting back on its expenditure, including that on defense. The focus sectors as per the 2013 federal budget are education, universities, research and development (RandD), and infrastructure to boost growth and the employment rate. With heavy dependence on copper exports which account for 55% of total exports, the economy might face trouble due to the fluctuating price of copper. This pattern may hamper the short term procurement and delay the modernization plan of the defense sector.

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Key Highlights

• Chile hosts Exponaval, a biennial naval and maritime defense conference and exhibition sponsored by the Chilean Ministry of Defense (MoD) and Navy. Launched in 1998, the event provides a platform for global naval defense equipment manufacturers to showcase their products, such as naval aviation equipment, refitted ships, and support fleets. At the 2012 event, representatives from 29 countries, over 180 exhibitors, and 15,000 visitors attended the event, which generated business in excess of US$700 million.
• In recent years, there have been a growing number of joint ventures between international companies and governments, and their Chilean counterparts. The Chilean government encourages these joint ventures and technology-sharing agreements, which enables domestic firms to enhance their capabilities while enhancing diplomatic relations between the countries.
• During 2008-2012, Germany and Italy, with a share of 96% and 4% respectively, were the suppliers of military hardware to Chile. However, during 2011, Germany supplied 100% of the defense equipment to the country. Over the next five years, Chile's arms imports will continue to be dominated by European suppliers such as Germany, Italy, and France, as the country is an EU member and favors defense equipment manufactured by other member countries.

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