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

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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 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 & Strategy 17
        • 3.1.3. Military Fleet Size 19
        • 3.1.4. Procurement Programs 26
        • 3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023 28
        • 3.1.6. Social, Political and Economic Environment & Support for Defense Projects 29
        • 3.1.7. Political & Strategic Alliances 30
      • 3.2. Defense Market Size Historical and Forecast 31
        • 3.2.1. Indonesian defense budget is expected to reach US$11.1 billion by 2023, at a CAGR of 6.52% 31
        • 3.2.2. Defense expenditure is driven by the modernization of the armed forces, indigenization, territorial disputes, and natural disasters 33
        • 3.2.3. Defense budget as a percentage of GDP expected to increase over the forecast period 36
      • 3.3. Analysis of Defense Budget Allocation 38
        • 3.3.1. Capital expenditure share of defense budget is expected to increase to an average of 34.5% over the forecast period 38
        • 3.3.2. Capital expenditure to increase over the forecast period 40
        • 3.3.3. Per capita defense expenditure expected to increase during the forecast period 42
      • 3.4. Homeland Security Market Size and Forecast 43
        • 3.4.1. Homeland security expenditure is expected to grow at a CAGR of 8.28% during the forecast period 43
        • 3.4.2. Border Security and Terrorism will drive the homeland security market over the forecast period 45
        • 3.4.3. Indonesia is considered as ‘highly affected’ by terrorism 46
        • 3.4.4. Indonesia faces high level of threat from foreign terrorist organizations 47
        • 3.4.5. Indonesia has a terrorism index score of 4.6 49
      • 3.5. Benchmarking with Key Global Markets 50
        • 3.5.1. Indonesia’s defense budget expected to register rapid growth over the forecast period 50
        • 3.5.2. Indonesian defense expenditure is relatively small compared to other Asian countries 52
        • 3.5.3. The Indonesian defense budget as a percentage of GDP is expected to slightly decrease during 2019-2023 53
      • 3.6. Market Opportunities: Key Trends and Growth Stimulators 54
        • 3.6.1. Top Defense Sectors by Value (US$ Million)-Projection over 2018-2023 54
        • 3.6.2. Military Infrastructure and Logistics 55
        • 3.6.3. C4SIR-Land Based 56
        • 3.6.4. Maritime and Border Security - Maritime surveillance and detection 57

      4. Defense Procurement Market Dynamics 58

      • 4.1. Import Market Dynamics 59
        • 4.1.1. Defense imports expected to increase during forecast period 59
        • 4.1.2. Indonesia plans to diversify arms imports 60
        • 4.1.3. Aircraft and ships constitute the majority of Indonesian defense imports 61
      • 4.2. Export Market Dynamics 62
        • 4.2.1. Indonesia does not possess significant defense export capability 62

      5. Industry Dynamics 63

      • 5.1. Five Forces Analysis 63
        • 5.1.1. Bargaining power of supplier: Low 64
        • 5.1.2. Bargaining power of Buyer: Medium 64
        • 5.1.3. Barrier to entry: Medium 64
        • 5.1.4. Intensity of rivalry: Low 64
        • 5.1.5. Threat of Substitution: High 64

      6. Market Entry Strategy 65

      • 6.1. Market Regulation 65
        • 6.1.1. Defense investment policy conducive to both domestic and foreign investment 65
        • 6.1.2. New procurement policy to support small and medium enterprises 66
        • 6.1.3. Indonesia to launch formal offset policy 66
      • 6.2. Market Entry Route 67
        • 6.2.1. Budget Process 67
        • 6.2.2. Procurement Policy & Process 68
        • 6.2.3. Foreign defense suppliers enter the Indonesian defense market primarily through joint ventures 68
        • 6.2.4. Strategic partnerships and military collaborations an easier way to access the Indonesian defense market 69
      • 6.3. Key Challenges 70
        • 6.3.1. US Sanctions affecting the market 70
        • 6.3.2. Limited budget for capex deters investment 70
        • 6.3.3. Lack of defense infrastructure 70
        • 6.3.4. Corruption impedes the growth of the Indonesian defense industry 70

      7. Competitive Landscape and Strategic Insights 71

      • 7.1. Competitive landscape Overview 71
      • 7.2. Key Public Sector Companies 74
        • 7.2.1. PT Dirgantara Indonesia: overview 74
        • 7.2.2. PT Dirgantara Indonesia: Major Products and Services 74
        • 7.2.3. PT Dirgantara Indonesia: recent announcements and strategic initiatives 74
        • 7.2.4. PT Dirgantara Indonesia: alliances 76
        • 7.2.5. PT Dirgantara Indonesia: recent contract wins 77
        • 7.2.6. PAL Indonesia: overview 79
        • 7.2.7. PAL Indonesia: Major Products 79
        • 7.2.8. PAL Indonesia: recent announcements and strategic initiatives 79
        • 7.2.9. PAL Indonesia: Alliances 80
        • 7.2.10. PAL Indonesia: Recent Contract Wins 80
        • 7.2.11. PT Pindad: overview 81
        • 7.2.12. PT Pindad: Major Products 81
        • 7.2.13. PT Pindad: recent announcements and strategic initiatives 82
        • 7.2.14. PT Pindad: alliances 83
        • 7.2.15. PT Pindad: Recent Contract Wins 83
        • 7.2.16. Dok & Perkapalan: overview 84
        • 7.2.17. Dok & Perkapalan: Major Products 84
        • 7.2.18. Dok & Perkapalan: recent announcements and strategic initiatives 84
        • 7.2.19. Dok & Perkapalan: alliances 85
        • 7.2.20. Dok & Perkapalan: Recent Contract Wins 85
      • 7.3. Key Private Sector Companies 86
        • 7.3.1. PT Dahana: overview 86
        • 7.3.2. PT Dahana: products 86
        • 7.3.3. PT Dahana: recent announcements and strategic initiatives 86
        • 7.3.4. PT Dahana: alliances 87
        • 7.3.5. PT Dahana: recent contract wins 87
        • 7.3.6. PT Multiintegra: overview 88
        • 7.3.7. PT Multiintegra: products 88
        • 7.3.8. PT Multiintegra: recent announcements and strategic initiatives 89
        • 7.3.9. PT Multiintegra: recent contract wins 89
        • 7.3.10. Radar and Communications Systems: overview 90
        • 7.3.11. Radar and Communications Systems: products 90
        • 7.3.12. Radar and Communications Systems: recent announcements and strategic initiatives. 90
        • 7.3.13. Radar and Communications Systems: alliances 91
        • 7.3.14. PT SOG Indonesia: overview 92
        • 7.3.15. PT SOG Indonesia: products and services 92
        • 7.3.16. PT SOG Indonesia: recent announcements and strategic initiatives 92
        • 7.3.17. PT SOG Indonesia: alliances 93

      8. Business Environment and Country Risk 94

      • 8.1. Economic Performance 94
        • 8.1.1. GDP Per Capita 94
        • 8.1.2. GDP, Current Prices 95
        • 8.1.3. Exports of goods and services, current prices 96
        • 8.1.4. Imports of goods and services, current prices 97
        • 8.1.5. Gross National disposable income (US$ Bn) 98
        • 8.1.6. Local Currency Unit per US Dollar 99
        • 8.1.7. Market Capitalization of Listed Companies 100
        • 8.1.8. Market Capitalization of Listed Companies (% of GDP) 101
        • 8.1.9. Government Cash Surplus/Deficit as % of GDP 102
        • 8.1.10. Goods exports as % of GDP 103
        • 8.1.11. Goods imports as % of GDP 104
        • 8.1.12. Service Imports as % of GDP 105
        • 8.1.13. Service Exports as % of GDP 106
        • 8.1.14. Foreign Direct Investment (US$ Billion) 107
        • 8.1.15. Net foreign direct investment as % of GDP 108
        • 8.1.16. Mining, Manufacturing, Utilities Output (LCU Tn) 109

      9. Appendix 110

      • 9.1. About GlobalData 110

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

      Summary

      "Future of the Indonesian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023", published by GlobalData, 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.

      This report offers detailed analysis of the Indonesian 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 defense industry market size and drivers: detailed analysis of the Indonesian 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 with respect to capital expenditure and revenue expenditure. It also details the key challenges faced by defense market participants within the country
      - Porter’s Five Force analysis of the Indonesian 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 Indonesian defense industry. It provides an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.

      Scope

      - Indonesian defense expenditure is forecasted to value US$8.6 billion in 2019 and is expected to grow at a CAGR of 6.52% during the forecast period to value US$11.1 billion in 2023. The economy has been growing at an average rate of 3.8% historically, and this has fueled the growth in the defense expenditure..
      - In terms of local currency, the budget allocation for capital expenditure increased from IDR21.4 trillion in 2014 to IDR28.8 trillion in 2018, and registered a CAGR of 7.73%.
      - The MoD is expected to invest in land based C4ISR, infrastructure construction and Maritime surveillance and detection among others.

      Reasons to buy

      - This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Indonesian 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 Indonesian defense industry covering sections including demand drivers, Porter’s Five Forces Analysis, Key Trends and Growth Stimulators, and latest industry contracts.
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