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

March 2018 | 142 pages | ID: FB2BDEE79DDEN
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Future of the Polish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

SUMMARY

The Future of the Polish Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023, published by Strategic Defence Intelligence, 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.

SYNOPSIS

This report offers detailed analysis of the Polish defense industry with market size forecasts covering the next five years. This report will also analyze factors that influence demand for the industry, key market trends, and challenges faced by industry participants.

In particular, it provides an in-depth analysis of the following -
  • The Polish defense industry market size and drivers: detailed analysis of the Polish defense industry during 2019-2023, 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. It also details the key challenges faced by defense market participants within the country
  • Porter’s Five Force analysis of the Polish 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 Polish defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis
SCOPE
  • With one of the fastest growing markets and a high-income economy, Poland aims to accelerate the modernization rate of its Armed Forces in the coming years.
  • While most European countries have reduced their military spending between 2014 and 2018, Poland increased its expenditure on armed forces at a CAGR of 15.22% in terms of local currency, making it one of the largest in Central Europe. However, in terms of US$, Polish defense expenditure registered a CAGR of 12.90%, which is attributed to the fluctuations in exchange rates.
  • Poland’s defense industry is the largest in Central Europe. During the forecast period, the country is expected to spend an estimated US$57.3 billion on strengthening its defense forces, primarily due to the modernization initiatives implemented by the Polish Ministry of National Defense (MoND).
Furthermore, the country’s defense expenditure will be driven by a combination of factors including the ongoing turmoil in the neighboring country of Ukraine and an increased involvement in NATO and UN peacekeeping missions. Defense expenditure amounted to an average of 1.8% of overall GDP over 2014-2018, and is expected to increase drastically to an average of 2.5% of the GDP over next five years.
  • The MoD is expected to invest in Land Based C4ISR, Missile Defense Systems and Multirole Aircraft
REASONS TO BUY
  • This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Polish 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 Polish defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
1. INTRODUCTION

1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. About Strategic Defence Intelligence

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 & Strategy
  3.1.3. Military Fleet Size
  3.1.4. Procurement Programs
Ongoing procurement programs
Future procurement programs
Top Procurement Programs By Value (US$ Million) 2018-2023
  3.1.5. Social, Political and Economic Environment & Support for Defense Projects
  3.1.6. Political & Strategic Alliances
3.2. Defense Market Size Historical and Forecast
  3.2.1. Polish defense expenditure is expected to reach US$16.8 billion by 2023
  3.2.2. The Ukrainian crisis, military modernization initiatives and peacekeeping missions to fuel defense expenditure over the forecast period
  3.2.3. Polish defense budget to be at 2.5% of GDP over 2018-2022
3.3. Analysis of Defense Budget Allocation
  3.3.1. Capital expenditure allocation expected to increase during the forecast period
  3.3.2. Capital expenditure to increase at a CAGR of 6.09% over 2018-2022
  3.3.3. The majority of the defense budget is allocated to military intelligence services and crisis response operations, which are anticipated to increase over the forecast period
  3.3.4. ‘Others’ segment to continue accounting for the largest share of the Polish defense budget
  3.3.5. Per capita defense expenditure is expected to increase during the forecast period
3.4. Homeland Security Market Size and Forecast
  3.4.1. Polish homeland security market to increase at a CAGR of 2.06% over the forecast period
  3.4.2. Homeland security expenditure to be triggered by the country’s efforts to counter drug smuggling, human trafficking, and cyber attacks
  3.4.3. Poland faces no known threat from terrorist organizations
  3.4.4. Poland faces low level of threat from foreign terrorist organizations
  3.4.5. Poland has a terrorism index score of “0.4”
3.5. Benchmarking with Key Global Markets
  3.5.1. Poland’s defense growth rate is expected to remain modest over the forecast period
  3.5.2. Poland’s defense spending is low compared to other European nations
  3.5.3. Poland allocates a moderate share of GDP for defense expenditure
3.6. Market Opportunities: Key Trends and Growth Stimulators
  3.6.1. Top Defense market sectors by value (US$ Million) - Projections over period 2018-2023
  3.6.2. C4ISR-Land Based
  3.6.3. Missile Defense System
  3.6.4. Multirole Aircraft

4. DEFENSE PROCUREMENT MARKET DYNAMICS

4.1. Import Dynamics
  4.1.1. Defense imports fluctuated during the period 2012-2016
  4.1.2. Poland sourced the majority of its arms imports from Finland
  4.1.3. Missiles and armored vehicles are the major military hardware imports
4.2. Export Market Dynamics
  4.2.1. Polish defense exports expected to increase over the forecast period
  4.2.2. Poland exports the majority of its defense goods to the US
  4.2.3. Aircraft and armored vehicles constitute the majority of Polish defense exports

5. INDUSTRY DYNAMICS

5.1. Five Forces Analysis
  5.1.1. Bargaining power of supplier: medium
  5.1.2. Bargaining power of buyer: medium
  5.1.3. Barrier to entry: medium
  5.1.4. Intensity of rivalry: high
  5.1.5. Threat of substitution: high

6. MARKET ENTRY STRATEGY

6.1. Market Regulation
  6.1.1. Polish government introduces new Offset Act for defense equipment procurements
6.2. Market Entry Route
  6.2.1. Budgeting Process
  6.2.2. Procurement Policy & Process
  6.2.3. Joint ventures and acquisitions of domestic companies are the preferred entry routes
  6.2.4. Foreign OEMs gain industry access through joint research and development programs
6.3. Key Challenges
  6.3.1. Dominance of EU defense companies impede the progress of non-European firms
  6.3.2. Lack of transparency in the public procurement process proves a major challenge

7. COMPETITIVE LANDSCAPE AND STRATEGIC INSIGHTS

7.1. Competitive landscape Overview
7.2. Key Foreign Companies
  7.2.1. BAE Systems: overview
  7.2.2. BAE Systems: main products and services
  7.2.3. BAE Systems: recent announcements and strategic initiatives
  7.2.4. BAE Systems: alliances
  7.2.5. BAE Systems: recent contract wins
  7.2.6. BAE Systems: financial analysis
  7.2.7. The Boeing Company: overview
  7.2.8. The Boeing Company: main products
  7.2.9. The Boeing Company: recent announcements and strategic initiatives
  7.2.10. The Boeing Company: alliances
  7.2.11. Boeing: financial analysis
  7.2.12. Lockheed Martin: overview
  7.2.13. Lockheed Martin: main products and services
  7.2.14. Lockheed Martin: recent announcements and strategic initiatives
  7.2.15. Lockheed Martin: alliances
  7.2.16. Lockheed Martin: recent contract wins
  7.2.17. Lockheed Martin Corp.: financial analysis
  7.2.18. CAE: overview
  7.2.19. CAE: main products and services
  7.2.20. CAE Inc.: alliances
  7.2.21. CAE Inc.: recent contract wins
  7.2.22. CAE Inc.: financial analysis
  7.2.23. Sikorsky, a Lockheed Martin Company: overview
  7.2.24. Sikorsky, a Lockheed Martin Company: main products and services
  7.2.25. Sikorsky, a Lockheed Martin Company: recent announcements and strategic initiatives
  7.2.26. Sikorsky, a Lockheed Martin Company: alliances
  7.2.27. Sikorsky, a Lockheed Martin Company: recent contract wins
  7.2.28. Leonardo S.p.A.: overview
  7.2.29. Leonardo S.p.A.: main products and services
  7.2.30. Leonardo S.p.A.: recent announcements and strategic initiatives
  7.2.31. Leonardo S.p.A.: alliances
  7.2.32. Leonardo S.p.A.: recent contract wins
  7.2.33. Leonardo S.p.A.: financial analysis
7.3. Key Public Companies
  7.3.1. Polish Defense Holding: overview
  7.3.2. Polish Defense Holding: main products
  7.3.3. Polish Defense Holding: recent announcements and strategic initiatives
  7.3.4. Polish Defense Holding: alliances
  7.3.5. Polish Defense Holding: recent contract wins
  7.3.6. PZL Mielec: overview
  7.3.7. PZL Mielec: products
  7.3.8. PZL Mielec: recent announcements and strategic initiatives
  7.3.9. PZL Mielec: alliances
  7.3.10. PZL Mielec: recent contract wins
  7.3.11. Wojskowe Zakłady Uzbrojenia SA: overview
  7.3.12. Wojskowe Zakłady Uzbrojenia SA: main products and services
  7.3.13. Wojskowe Zakłady Uzbrojenia SA: recent announcements and strategic initiatives
  7.3.14. Wojskowe Zakłady Uzbrojenia SA: alliances
  7.3.15. Huta Stalowa Wola: overview
  7.3.16. Huta Stalowa Wola: main products and services
  7.3.17. Huta Stalowa Wola: recent announcements and strategic initiatives
  7.3.18. Huta Stalowa Wola: alliances
  7.3.19. Huta Stalowa Wola: recent contract wins
  7.3.20. ROSOMAK S.A.: overview
  7.3.21. ROSOMAK S.A.: main products and services
  7.3.22. ROSOMAK S.A.: recent announcements and strategic initiatives
  7.3.23. ROSOMAK S.A.: recent contract wins

8. BUSINESS ENVIRONMENT AND COUNTRY RISK

8.1. Economic Performance
  8.1.1. GDP Per Capita
  8.1.2. GDP, Current Prices
  8.1.3. Exports of goods and services, current prices
  8.1.4. Imports of goods and services, current prices
  8.1.5. Gross National disposable income (US$ Billion)
  8.1.6. Local Currency Unit per US Dollar
  8.1.7. Market Capitalization of Listed Companies
  8.1.8. Market Capitalization of Listed Companies a percentage of GDP
  8.1.9. 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. Service Imports as a percentage of GDP
  8.1.13. Service Exports as a percentage of GDP
  8.1.14. Foreign direct investment, net (BoP, current US$ Billion)
  8.1.15. Net foreign direct investment as % of GDP
  8.1.16. Mining, Manufacturing, Utilities Output (LCU Billion)

9. APPENDIX

9.1. About SDI
9.2. Disclaimer

LIST OF TABLES

Table 1: Polish Land Forces Strength
Table 2: Polish Navy Strength
Table 3: Polish Air Force Strength
Table 4: Polish Ongoing Procurement Programs
Table 5: Polish Future Procurement Programs
Table 6: Top Polish Defense Procurement Programs by Value (US$ Million) 2018-2023
Table 7: Polish Defense Expenditure (PLN Billion & US$ Billion), 2014-2023
Table 8: Polish GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2014-2023
Table 9: Polish Defense Budget Split Between Capital and Revenue Expenditure (%),2014-2023
Table 10: Polish Defense Capital Expenditure (PLN Billion & US$ Billion), 2014-2023
Table 11: Polish Defense Expenditure Allocation (% Share), 2014-2023
Table 12: Polish Defense Budget in PLN Billion - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023
Table 13: Polish Defense Budget in US$ Million - Breakdown by Services (Army, Navy, Air Force and Others) 2014-2023
Table 14: Polish Per-Capita Defense Expenditure (US$), 2014-2023
Table 15: Polish Homeland Security Expenditure (PLN Billion & US$ Billion), 2014-2023
Table 16: Terrorism Index, 2018
Table 17: Benchmarking with Key Markets: 2014-2018 vs. 2019-2023
Table 18: Top Polish Defense Market Sectors by Value (US$ Million) - 2018-2023
Table 19: Polish Budget Formation Timetable:
Table 20: Market Entry Strategies by Key Foreign Companies
Table 21: Top Defense Suppliers in Polish Defense Industry - By Value (US$ Million) 2018-2023
Table 22: Competitive Landscape of the Polish Defense Industry
Table 23: BAE Systems, Main Products
Table 24: BAE Systems, Alliances
Table 25: BAE Systems - Recent Contract Wins
Table 26: The Boeing Company, Main Products
Table 27: The Boeing Company, Alliances
Table 28: Lockheed Martin, Main Products
Table 29: Lockheed Martin, Alliances
Table 30: Lockheed Martin, Recent Contract Wins
Table 31: CAE, Main Products and Services
Table 32: CAE Inc., Alliances
Table 33: CAE, recent contract wins
Table 34: Sikorsky, a Lockheed martin Company Main Products and Services
Table 35: Sikorsky, a Lockheed Martin Company Alliances
Table 36:Sikorsky, a Lockheed Martin Company: recent contract wins
Table 37: Leonardo S.p.A., Main Products and Services
Table 38: Leonardo S.p.A., Alliances
Table 39: Leonardo S.p.A., Recent Contract Wins
Table 40: Polish Defense Holding, Major Products
Table 41: Polish Defense Holding, Alliances
Table 42: Polish Defense Holding, Recent Contract Wins
Table 43: PZL Mielec - Main Products
Table 44: PZL Mielec, Alliances
Table 45: PZL Mielec, Recent Contract Wins
Table 46: Wojskowe Zakłady Uzbrojenia SA, Main Products and Services
Table 47: Wojskowe Zakłady Uzbrojenia SA, Alliances
Table 48: Huta Stalowa Wola, Main Products and Services
Table 49: Huta Stalowa Wola, Alliances
Table 50: Huta Stalowa Wola, Recent Contract Wins
Table 51: ROSOMAK S.A.: Main Products and Services
Table 52: ROSOMAK SA., Recent Contract Wins

Poland continues to expand its arms exports to the Middle East and developing countries

Although Germany emerged as the biggest arms supplier over 2012-2016, Poland had relied largely on the US for its procurement of advanced arms and ammunitions in the past. However, the benefits of having multiple import partners have pushed Poland to procure weaponry from European countries including Finland, Italy, Norway, Spain, Sweden, France, and the UK, as well as the US, Israel, and Canada among others, a trend that is expected to continue over the forecast period.

Exports account for 13–15% of the Polish defense industry, with Asia being the country’s main export destination. Poland’s main exports are aircraft, missiles and armored vehicles. Domestic defense suppliers are unable to export military hardware to Western Europe, as the region’s defense market is dominated by established defense firms, and as a result, Poland aims to expand its defense exports to the Middle East and developing countries such as Latvia, Estonia, the Czech Republic, Philippines, India, and Thailand. However Poland has managed to enhance its exports of weapon systems to the US and between 2012-2016 the US accounted for as much as 66.2% of Polish defense exports.  Although, the US is unlikely to remain the single largest export destination for Polish defense products, the country is likely to increase its presence within emerging defense markets in Asia, the Middle East and even Latin America.

The formation of strategic alliances and the acquisition of domestic defense firms are the preferred market entry options

Foreign OEMs prefer to enter the Polish defense industry through the formation of strategic alliances or the acquisition of shares in a domestic defense company. The majority of foreign investors are attracted to Poland due to its growing economy and low production costs, especially in manufacturing tanks, armored vehicles, aircraft, artillery, and helicopters. As a result, several companies have established a Polish manufacturing base from which products are sold to international defense markets. AgustaWestland adopted this strategy with the acquisition of Polish helicopter manufacturer PZL-Świdnik in 2010. In addition, foreign investors collaborate with domestic defense organizations, such as the Institute of Aviation in Warsaw, to develop and produce new defense products.



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