Norwegian Defense Industry 2019 Forecasts

This report is the result of SDI's extensive market and company research covering the Norwegian defense industry, and provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news. The Future of the Norwegian Defense Industry - Market Attractiveness, Competitive Landscape, and Forecasts to 2019offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Norwegian defense industry.

Norway's total defense expenditure stands at US$7 billion in 2014 and is expected to grow at a CAGR of 5.50% over the forecast period, to reach US$9.1 billion in 2019; this increase in defense expenditure can be attributed to the modernization and training programs that are expected to be executed during the forecast period. Norwegian defense expenditure is further driven by participation in peacekeeping initiatives, the procurement of military aircraft such as the F-35 fighter aircraft, the Norwegian All Weather Search and Rescue Helicopter (NAWSARH) program, Advanced Medium Range Air-to-Air Missiles (AMRAAM), upgrade and support for C-130J aircraft the soldier modernization program, cyber security and the procurement of advanced technology equipment. The country's defense budget stands at 1.33% of GDP in 2014 and is expected to increase marginally to 1.42% of GDP by 2019. During 2010-2014, the average capital expenditure allocation stood at 31.6% of the total defense budget, and this is expected to grow at the same average during the forecast period.

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Key Features and Benefits

The report provides detailed analysis of the current industry size and growth expectations from 2015 to 2019, 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 Norwegian 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 Norway. 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.

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Key Highlights

The Norwegian MoD is in the process of modernizing its armed forces with advanced equipment; in 2010, the country passed a long term defense plan, which was again revised in 2012. It outlined modernization plans, including the procurement of 48 F-35 fighter jets, additional funding for the home guard, advanced training for the armed forces and home guard, and a special allocation for cyber security. Furthermore, in early 2013 the Norwegian Defence Logistics Organization (NDLO) has contracted with Iveco Defense Vehicles for a tranche of 60 light armored vehicles and this procurement is expected to increase the total fleet to 170 units. In 2012, the country finalized on modernizing its land forces and proposed to spend US$750 million to upgrade and manufacture 146 CV90 armored combat vehicles which will significantly enhance army's operational capabilities. The program is expected to complete in 2017 after adding 41 new CV90 armored fighting vehicles (AFVs) and upgrading 103 current CV90s. The prime contractors include BAE Systems manufacturing new vehicles and Kongsberg Defence and Aerospace, who will supply the integrated data and information system, installation of weapon systems, sensors, communication and security systems.

Table of Contents

1 Introduction
1.1. What is this Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. SDI Terrorism Index
1.5. About Strategic Defence Intelligence

2 Executive Summary

3 Market Attractiveness and Emerging Opportunities
3.1. Defense Market Size Historical and Forecast
3.1.1. The Norwegian defense budget to grow at a CAGR of 4.88% during 2010-2014
3.1.2. Participation in international peacekeeping operations , modernization of the armed forces and interest in arctic region  are the major drivers of the Norwegian defense industry
3.1.3. Defense expenditure as a Percentage of GDP is expected to average 1.42% during the forecast period
3.2. Analysis of Defense Budget Allocation
3.2.1. Capital expenditure allocation is expected to increase over the forecast period
3.2.2. Expenditure on procurement of material, buildings, and construction is expected to be the largest during forecast period
3.2.3. Air force expenditure to grow at a CAGR of 10.58% over the forecast period and to reach US$1.59 billion in 2019
3.2.4. Army expenditure to grow at a CAGR of 6.12% over the forecast period to reach US$1.56 billion in 2019
3.2.5. Naval expenditure is expected to reach US$1.07 billion by 2019
3.2.6. Procurement of material, buildings, and construction work expenditure expected to be the largest segment of the defense budget during the forecast period
3.2.7. Other expenditure is expected to decrease marginally over the forecast period
3.3. Homeland Security Market Size and Forecast
3.3.1. The Norwegian homeland security expenditure is expected to grow at a CAGR of 7.9% over the forecast period
3.3.2. Counter-terrorism and enhanced cyber security are expected to drive homeland security expenditure
3.3.3. Norway is at a “low risk” of terrorism
3.3.4. Norway has a terrorism index score of “zero”
3.4. Benchmarking with Key Global Markets
3.4.1. Norwegian defense budget expenditure expected to increase over the forecast period, unlike other European countries
3.4.2. Norway has the one of the fastest growing defense industries in Europe
3.4.3. Norwegian defense budget as a percentage of GDP is expected to grow over the forecast period
3.4.4. Norway ranked fifteenth among top global arms exporters during 2008-2012
3.5. Market Opportunities: Key Trends and Growth Stimulators
3.5.1. Fighters and Multi-role aircraft
3.5.2. Diesel Electric Submarine
3.5.3. Homeland Security Infrastructure
3.5.4. Multi mission and Rescue Helicopters

4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Norwegian defense imports are expected to increase over the forecast period
4.1.2. Spain and the US are expected to remain the largest arms suppliers to Norway
4.1.3. Ships accounted for the largest percentage share of overall defense imports
4.2. Export Market Dynamics
4.2.1. Norway ranked fifteenth among the countries with the highest volume of defense exports
4.2.2. Exports to European countries are expected to increase over the forecast period
4.2.3. Other category accounted for the majority of Norway's defense exports during 2008-2012

5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of Supplier: Low
5.1.2. Bargaining power of Buyer: High
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. The Norwegian defense industry is largely driven by government regulation and offset policy
6.1.2. The Norwegian government supports FDI
6.2. Market Entry Route
6.2.1. Entry through joint development programs
6.2.2. Foreign Military Sales (FMS) to Norway
6.2.3. Collaborations provide market entry opportunities
6.3. Key Challenges
6.3.1. The Norwegian government prefers Scandinavian and European countries for defense trade
6.3.2. The Norwegian export policy poses a challenge for domestic defense companies

7 Competitive Landscape and Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Public Sector Companies
7.2.1. Kongsberg Defense Systems: Overview
7.2.2. Kongsberg Defense Systems: Major Products and Services
7.2.3. Kongsberg Defense Systems: Recent Announcements and Strategic Initiatives
7.2.4. Kongsberg Defense Systems: alliances
7.2.5. Kongsberg Defense Systems: recent contract wins
7.2.6. Kongsberg Defense Systems: financial analysis
7.2.7. Forsvarets  ForskningsInstitutt: overview
7.2.8. Forsvarets  ForskningsInstitutt: defense products
7.2.9. Forsvarets  ForskningsInstitutt: recent announcements and strategic initiatives
7.2.10. Forsvarets  ForskningsInstitutt: alliances
7.2.11. Forsvarets  ForskningsInstitutt: recent contract wins
7.2.12. NAMMO AS: overview
7.2.13. NAMMO AS: products and services
7.2.14. NAMMO AS: recent announcements and strategic initiatives
7.2.15. NAMMO AS: alliances
7.2.16. NAMMO AS: recent contract wins
7.2.17. NAMMO AS: financial analysis
7.2.18. Kitron: overview
7.2.19. Kitron: products and services
7.2.20. Kitron: recent announcements and strategic initiatives
7.2.21. Kitron: alliances
7.2.22. Kitron: recent contract wins
7.2.23. Kitron: financial analysis
7.3. Key Private Sector Companies
7.3.1. Natech NSV AS: overview
7.3.2. Natech NSV AS: products and services
7.3.3. Natech NSV AS: recent announcements and strategic initiatives
7.3.4. Natech NSV AS: alliances
7.3.5. Natech NSV AS: recent contract wins
7.3.6. Jotne EPM Technology AS: overview
7.3.7. Jotne EPM Technology AS: products and services
7.3.8. Jotne EPM Technology AS: recent announcements and strategic initiatives
7.3.9. Jotne EPM Technology AS: alliances
7.3.10. Jotne EPM Technology AS: recent contract wins
7.3.11. Thales Norway AS: overview
7.3.12. Thales Norway AS: products and services
7.3.13. Thales Norway AS: recent announcements and strategic initiatives
7.3.14. Thales Norway AS: alliances
7.3.15. Thales Norway AS: recent contract wins
7.3.16. Sea-Hawk Navigation AS: overview
7.3.17. Sea-Hawk Navigation AS: products
7.3.18. Sea-Hawk Navigation AS: recent announcements and strategic initiatives
7.3.19. Umoe Mandal: overview
7.3.20. Umoe Mandal: products and services
7.3.21. Umoe Mandal: recent announcements and strategic initiatives
7.3.22. Umoe Mandal: alliances
7.3.23. Eidsvoll Electronics AS: overview
7.3.24. Eidsvoll Electronics AS: products and services
7.3.25. Eidsvoll Electronics AS: recent announcements and strategic initiatives
7.3.26. Eidsvoll Electronics AS: alliances
7.3.27. Eidsvoll Electronics AS: recent contract wins

8 Business Environment and Country Risk
8.1. Demographics
8.1.1. Total Rural population
8.1.2. Total urban population
8.1.3. Number of households
8.2. Economic Performance
8.2.1. GDP per capita at constant prices
8.2.2. GDP at current prices (US$)
8.2.3. Exports of goods and services (current US$ bn)
8.2.4. Imports of goods and services (current US$ bn)
8.2.5. Gross national disposable income (US$ billion)
8.2.6. Manufacturing output (US$ bn)
8.2.7. Consumer price index
8.2.8. Wholesale price index
8.2.9. LCU per US$ (period average)
8.2.10. Deposit rate (%)
8.2.11. Market capitalization of listed companies (US$ bn)
8.2.12. Market capitalization of listed companies (% of GDP)
8.2.13. Total Government cash surplus/deficit (LCU billion)
8.2.14. Government cash surplus/deficit as a percentage of GDP (LCU)
8.2.15. Central government debt (LCU billion)
8.2.16. Central government debt as a percentage of GDP (LCU)
8.2.17. Goods exports as a percentage of GDP
8.2.18. Goods imports as a percentage of GDP
8.2.19. Goods balance as a percentage of GDP
8.2.20. Services imports as a percentage of GDP
8.2.21. Service exports as a percentage of GDP
8.2.22. Services balance as a percentage of GDP
8.2.23. Foreign direct investment, net (BoP, current US$ billions)
8.2.24. Net foreign direct investment as a percentage of GDP
8.2.25. International reserves, including gold (US$ billion)
8.3. Energy and utilities
8.3.1. Total Conventional Thermal Electricity Net Generation (Billion kWh)
8.3.2. Hydroelectricity Net Generation (Billion kWh)
8.3.3. Nuclear Electricity Net Generation (Billion kWh)
8.3.4. Total Conventional Thermal Electricity Installed Capacity (Million kW)
8.3.5. Proved Reserves of Natural Gas (Trillion Cubic Feet)
8.3.6. Total Petroleum Consumption (Thousand Barrels Per Day)
8.3.7. Crude Oil Proved Reserves (Billion Barrels)
8.3.8. Total Non-Hydro Renewable Electricity Net Generation (Billion kW)
8.4. Infrastructure Quality and Availability
8.4.1. Air transport, freight (million ton-km)
8.5. Mineral
8.5.1. Mining, Manufacturing, Utilities Output (US$ billion)
8.6. Technology
8.6.1. Research and Development expenditure (LCU Thousands)
8.7. Telecommunication
8.7.1. Telephone lines (in mn)
8.7.2. Telephone lines Penetration Rate (per 100 people)

9 Appendix
9.1. About SDI
9.2. Disclaimer

List of Tables