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Future of the Finland Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Published By :

Strategic Defence Intelligence

Published Date : Apr 2017

Category :

Defense and Security

No. of Pages : 96 Pages

Future of the Finland Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022

Summary

The Future of the Finland Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2022, 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 Finnish 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 Finnish defense industry market size and drivers: detailed analysis of the Finnish defense industry during 2018-2022, including highlights of the demand drivers and growth stimulators for the industry. It also provides a snapshot of the countrys 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
- Porters Five Force analysis of the Finnish 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 countrys 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 Finnish defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Scope

- Finlands total defense expenditure stands at US$3 billion in 2017, and is expected to grow at a CAGR of 1.96% over the forecast period, to reach US$3.3 billion in 2022. Finnish defense expenditure is primarily driven by participation in peacekeeping initiatives, the soldier modernization program and the procurement of advanced technology equipment. Finland is an active participant in the crisis management programs mandated by the United Nations (UN). The Finnish defense industry is expected to focus its expenditure on Leopard 2A6 main battle tanks, multi-role aircraft, cyber security, and C4ISR systems.
- The Finnish Ministry of Defence (MoD) allocated an average of 27.2% to capital expenditure during 2013-2017, and is expected to decrease over the forecast period to reach 26.6%. Currently, due to the austerity measures, the government is focusing on the acquisition of high-quality secondhand equipment to save costs. Its military modernization programs include the procurement of 100 secondhand EX-Danish Leopard 2A6 main battle tanks, air defense missile system, IT Services, C4ISR, soldier combat systems and surveillance system, along with the procurement of littoral ships for the navy and improvements into the coast guard role. Furthermore, under the soldier modernization program, Warrior 2020, the army plans to procure communications, automatic mortars, C4I subsystems, lightweight superior ballistic protection and smart munitions systems, in order to create a mobile force. Over 2013-2017, the Finnish defense capital expenditure registered an average of US$0.90 billion. The countrys capital expenditure is expected to marginally increase from US$0.8 billion in 2017 to US$0.9 billion in 2022, registering a CAGR of 2.19% during the forecast period. The Finnish Defence Ministry is expected to procure fighters and multi-role aircraft, Maintenance, Repair and Operations (MRO) for multi-role aircraft, naval vessels MRO, and aircraft simulators.
- The MoD is expected to invest in fighters and Multi-role aircraft, fighters & multi-role aircraft MRO and aircraft simulators.

Reasons to buy

- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Finnish 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 Finnish defense industry covering sections including demand drivers, Porters Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts
Table of Contents
1 Introduction 8
1.1 What is this Report About? 8
1.2 Definitions 8
1.3 Summary Methodology 11
1.4 About Strategic Defence Intelligence 12
2 Executive Summary 13
3 Market Attractiveness and Emerging Opportunities 15
3.1 Current Market Scenario 16
3.1.1 Primary threat perception 16
3.1.2 Military Doctrine and Strategy 18
3.1.3 Military Fleet Size 20
3.2 Procurement Programs 23
3.2.1 Ongoing procurement programs 23
3.2.2 Future procurement programs 24
3.2.3 Social, political and economic environment and support for defense projects 25
3.2.4 Political and strategic alliances 26
3.3 Defense Market Size Historical and Forecast 27
3.3.1 Finnish defense budget to grow at a CAGR of 1.96% during 2018-2022 27
3.3.2 Modernization programs, international peacekeeping missions, and a perceived security threat from Russia are the main factors driving Finnish defense expenditure 29
3.4 Analysis of Defense Budget Allocation 30
3.4.1 Defense expenditure as a percentage of GDP to reach 1.1% by 2022 30
3.4.2 Revenue expenditure allocation expected to increase during the forecast period 32
3.4.3 Capital expenditure expected to grow at a CAGR of 2.19% over the forecast period 34
3.4.4 Per capita defense expenditure expected to increase during the forecast period 36
3.5 Homeland Security Market Size and Forecast 37
3.5.1 Homeland security expenditure is expected to grow at a CAGR of 11.27% during the forecast period 37
3.5.2 Homeland security expenditure in Finland is mainly driven by organized crimes and maritime security threats 39
3.5.3 Finland considered a moderate risk country for terror activities 40
3.5.4 Finland faces moderate level of threat from foreign terrorist organizations 41
3.5.5 Finland faces minimal threat from terrorists 43
3.6 Benchmarking with Key Global Markets 44
3.6.1 Finnish defense budget to increase at a CAGR of 1.96% during 2018-2022 44
3.6.2 Finnish defense expenditure is small compared to the leading spenders 46
3.6.3 Finland trails European states in defense spending 47
3.7 Market Opportunities: Key Trends and Drivers 48
3.7.1 Fighters and Multi-Role Aircraft 48
3.7.2 Fighters and Multi-Role Aircraft MRO 49
3.7.3 Aircraft Simulators 50
4 Defense Procurement Market Dynamics 51
4.1 Import Market Dynamics 52
4.1.1 Defense imports are expected to increase during the forecast period 52
4.1.2 European countries including Italy, Sweden, and France were the major suppliers to Finland during 2012-2016 53
4.1.3 Aircraft, missiles and sensors constitute the majority of Finnish arms imports 54
4.2 Export Market Dynamics 55
4.2.1 Finnish exports decline over the period 2013-2016 55
4.2.2 EU countries account for the majority of Finnish defense exports 56
4.2.3 Armored vehicles are the largest exported defense hardware 57
5 Industry Dynamics 58
5.1 Bargaining power of supplier: low to high 59
5.2 Bargaining power of buyer: high 59
5.3 Barrier to entry: medium 59
5.4 Intensity of rivalry: low to high 59
5.5 Threat of substitution: low to high 59
6 Market Entry Strategy 60
6.1 Market Regulation 60
6.1.1 The government encourages offsets in order to develop a domestic defense industrial base 60
6.1.2 Finnish defense sector is open to foreign direct investments 61
6.2 Market Entry Route 62
6.2.1 Budgeting Process 62
6.2.2 Procurement Policy and Process 63
6.2.3 Partnerships with domestic defense firms offer attractive market entry route 64
6.2.4 Foreign OEMs gain industry access through joint R&D programs 65
6.2.5 Foreign military sales to Finland 65
6.2.6 Collaborations provide market entry opportunities 65
6.3 Key Challenges 66
6.3.1 The Finnish Government prefers Nordic and European countries for defense trade 66
6.3.2 Defense budget deficit may lead to a reduction in the overall military budget 66
7 Competitive Landscape and Strategic Insights 67
7.1 Competitive Landscape Overview 67
7.2 Key Foreign Companies 68
7.2.1 Elektrobit Corporation: overview 68
7.2.2 Elektrobit Corporation: products 68
7.2.3 Elektrobit Corporation: recent announcements and strategic initiatives 68
7.2.4 Elektrobit Corporation: alliances 70
7.2.5 Elektrobit Corporation: recent contract wins 70
7.2.6 Kiitokori Oy: overview 71
7.2.7 Kiitokori Oy: products 71
7.2.8 Kiitokori Oy: recent announcements and strategic initiatives 72
7.2.9 Millog Oy: overview 72
7.2.10 Millog Oy: products and services 72
7.2.11 Millog Oy: recent announcements and strategic initiatives 72
7.2.12 Millog Oy: alliances 73
7.2.13 Millog Oy: recent contract wins 73
7.2.14 Nammo Lapua Oy: overview 74
7.2.15 Nammo Lapua Oy: products and services 74
7.2.16 Nammo Lapua Oy: recent announcements and strategic initiatives 75
7.2.17 Nammo Lapua Oy: recent contract wins 75
7.2.18 Patria: overview 76
7.2.19 Patria: products and services 76
7.2.20 Patria: recent announcements 76
7.2.21 Patria: Recent Contract Wins 77
7.2.22 Patria: alliances 78
7.2.23 Patricomp Oy: overview 79
7.2.24 Patricomp Oy: products and services 79
7.2.25 Patricomp Oy: recent announcements and strategic initiatives 79
7.2.26 Patricomp Oy: recent contract wins 79
7.2.27 Temet Oy: overview 80
7.2.28 Temet Oy: products 80
8 Business Environment and Country Risk 81
8.1 Economic Performance 81
8.1.1 GDP per capita at constant prices 81
8.1.2 GDP at current prices (US$) 82
8.1.3 Exports of goods and services (current Local Currency Units (LCU) billion) 83
8.1.4 Imports of goods and services (current LCU billion) 84
8.1.5 Gross national disposable income (US$ billion) 85
8.1.6 LCU per US$ (period average) 86
8.1.7 Market capitalization of listed companies (US$ billion) 87
8.1.8 Market capitalization of listed companies (% of GDP) 88
8.1.9 Government cash surplus/deficit as a percentage of GDP (LCU) 89
8.1.10 Goods exports as a percentage of GDP 90
8.1.11 Goods imports as a percentage of GDP 91
8.1.12 Services imports as a percentage of GDP 92
8.1.13 Service exports as a percentage of GDP 93
8.1.14 Foreign direct investment, net (Balance of Payments (BoP), current US$ billions) 94
8.1.15 Net foreign direct investment as % of GDP 95
8.1.16 Mining, Manufacturing, Utilities Output (LCU billion) 96
9 Appendix 97
9.1 Contact Us 97
9.2 About SDI 97
9.3 Disclaimer 97

List of Tables
Table 1: Finnish Army Strength 20
Table 2: Finnish Navy Strength 21
Table 3: Finnish Air Force Strength 22
Table 4: Finnish Ongoing Procurement Programs 23
Table 5: Finnish Future Procurement Programs 24
Table 6: Finnish Defense Expenditure (EUR Billion and US$ Billion), 2013-2022 27
Table 7: Finnish GDP Growth vs. Defense Expenditure as Percentage of GDP Growth, 2013-2022 30
Table 8: Finnish Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022 32
Table 9: Finnish Defense Capital Expenditure (EUR Million and US$ Billion), 2013-2022 34
Table 10: Finnish Per Capita Defense Expenditure (US$), 2013-2022 36
Table 11: Finnish Homeland Security Expenditure (EUR Billion and US$ Billion), 2013-2022 37
Table12: Terrorism Index, 2017 41
Table 13: Benchmarking with Key Markets: 2013-2017 vs. 2018-2022 44
Table 14: Offset Regulations in Finland 60
Table 15: Offset multiplier categories 60
Table 16: Finnish Budget Formation Timetable: 62
Table 17: Competitive Landscape in Finnish Defense Market 67
Table 18: Elektrobit Corporation - Product Focus 68
Table 19: Elektrobit Corporation - Alliances 70
Table 20: Elektrobit Corporation - Recent Contract Wins 70
Table 21: Kiitokori Oy- Product Focus 71
Table 22: Millog Oy - Product Focus 72
Table 23: Millog Oy - Alliances 73
Table 24: Millog Oy - Recent Contract Wins 73
Table 25: Nammo Lapua Oy - Product Focus 74
Table 26: Nammo Lapua Oy - Recent Contract Wins 75
Table 27: Patria - Product Focus 76
Table 28: Patria- Recent Contract Wins 77
Table 29: Patria- Alliances 78
Table 30: Patricomp Oy - Product Focus 79
Table 31: Patricomp Oy - Recent Contract Wins 79
Table 32: Temet Oy - Product Focus 80

List of Figures
Figure 1: Finnish Defense Expenditure (EUR bn), 2013-2022 28
Figure 2: Finnish Defense Expenditure (US$ bn), 2013-2022 28
Figure 3: Finnish GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022 31
Figure 4: Finnish Defense Budget Split Between Capital and Revenue Expenditure (%), 2013-2022 33
Figure 5: Finnish Capital Budget Allocation (EUR Billion), 2013-2022 35
Figure 6: Finnish Capital Budget Allocation (US$ Billion), 2013-2022 35
Figure 7: Finnish Per Capita Defense Expenditure (US$), 2013-2022 36
Figure 8: Finnish Homeland Security Budget (EUR Billion), 2013-2022 38
Figure 9: Finnish Homeland Security Budget (US$ Billion), 2013-2022 38
Figure 10: Terrorism Heat Map, 2017 40
Figure 11: Terrorism Index, 2017 43
Figure 12: Benchmarking with Key Markets, 2013-2017 vs. 2018-2022 45
Figure 13: Benchmarking with Worlds Largest Defense Spenders (US$ Billion), 2017-2022 46
Figure 14: Benchmarking with Large Defense Spenders as % of GDP - 2017 47
Figure 15: Fighters and Multi-Role Aircraft (US$ Million), 2017-2027 48
Figure 16: Fighters and Multi-Role Aircraft MRO (US$ Million), 2017-2027 49
Figure 17: Aircraft Simulation Systems (US$ Million), 2017-2027 50
Figure 18: Finnish Defense Imports (US$ million), 2012-2016 52
Figure 19: Finnish Defense Imports by Country (%), 2012-2016 53
Figure 20: Finnish Defense Imports by Category, 2012-2016 54
Figure 21: Finnish Defense Export Trend (US$ Million), 2012-2016 55
Figure 22: Finnish Defense Exports by Country (%), 2012-2016 56
Figure 23: Finnish Defense Exports by Category, 2012-2016 57
Figure 24: Industry Dynamics - Porters Five Forces Analysis 58
Figure 25: Finnish GDP Per Capita at Constant Prices (US$), 2015-2025 81
Figure 26: Finnish GDP at Current Prices (US$ Billion), 2015-2025 82
Figure 27: Finnish Exports of Goods and Services (LCU Billion), 2005-2014 83
Figure 28: Finnish Imports of Goods and Services (LCU Billion), 2005-2014 84
Figure 29: Finnish Gross National Disposable Income (US$ Billion), 2005-2013 85
Figure 30: Finland LCU per US$, 2015-2024 86
Figure 31: Finnish Market Capitalization of Listed Companies (US$ Billion), 2005-2012 87
Figure 32: Finnish Market Capitalization of Listed Companies (% of GDP), 2005-2012 88
Figure 33: Finnish Government Cash Surplus/Deficit as % of GDP (LCU), 2005-2012 89
Figure 34: Finland - Goods Exports as a % of GDP (%), 2005-2013 90
Figure 35: Finland- Goods Imports as a % of GDP (%), 2005-2013 91
Figure 36: Finnish Services Imports as a % of GDP (%), 2005-2013 92
Figure 37: Finnish Service Exports as a % of GDP (%), 2005-2013 93
Figure 38: Finland - Foreign Direct Investment, net (BoP, current US$ billion), 2005-2013 94
Figure 39: Finland- Net Foreign Direct Investment as a % of GDP, 2005-2013 95
Figure 40: Finnish Mining, Manufacturing, Utilities Output (LCU billion), 2005-2014 96

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