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Future of the Norwegian Defense Industry
– Market Attractiveness, Competitive
Landscape and Forecasts to 2020
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
2
Summary
“Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts
to 2020” report offers the reader detailed analysis of the defense budget over the next five years. Alongside
it offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original
equipment manufacturers) to gain a market share in the Norwegian defense industry.
The report provides detailed analysis of the current industry size and growth expectations during 2016-2020,
including highlights of the key growth stimulators. It also benchmarks the industry against key global markets
and provides detailed understanding of emerging opportunities in specific areas.
Key Findings
Recovering from global financial crisis, Norway aims to develop a strong and modern defense force that is
capable of addressing national threats as well as contributing effectively in allied and international operations
for security and peace. The country is part of NORDEFCO (Nordic Defence Cooperation), which was
established in 2009 and has the goal of strengthening defense capabilities through cost-effective
collaborations. The country has expressed interest in multinational defense cooperation via procurement,
training, and support agreements. The government is also keen to enter into bilateral and multilateral
collaborations with allies within neighboring areas, to contribute actively to EU security and defense
operations and to establish Nordic security and defense cooperation. These measures are likely to stimulate
the Norwegian defense budget over the next five years; the defense budget is expected to grow at an
estimated CAGR of XX% over the forecast period, to reach US$XX billion in 2020.
Key Features and Benefits
The report provides detailed analysis of the Norwegian defense industry during 2011–2020, including the
factors that influence the military expenditure. It provides detailed expectations of growth rates and projected
total expenditure.
It provides the manufacturers with insights on market opportunities along with industry structure and
dynamics prevalent in the country. In addition, the report focuses on the regulations governing the
Norwegian defense industry and the potential market entry strategies with an expert analysis of the
competitive structure.
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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1. Market Attractiveness and Emerging Opportunities
1.1. Defense Market Size Historical and Forecast
1.1.1. Norwegian defense budget will grow at a CAGR of XX over 2016–2020
In 2015, the Norwegian government allocated US$XX billion to the total defense budget, which registered a
negative CAGR of XX%. Although the government increased its budget in 2015, the annual decrease is
primarily due to the decline in the exchange rate. Over the forecast period, the defense budget is expected to
increase at a CAGR of XX% from US$XX billion in 2016 to US$XX billion in 2020. The government‟s efforts
to strengthen the country‟s defense capabilities are expected to fuel Norwegian defense expenditure, and a
significant amount is expected to be spent on the procurement of advanced equipment, modernization and
training, and the development of the armed forces. The country is projected to invest in the acquisition of
fighter aircraft, armored vehicles, Advanced Medium Range Air-to-Air Missiles (AMRAAMs), and helicopters.
The following table and figure show the Norwegian defense expenditure during the historic period:
Table 1: Norwegian Defense Expenditure (US$ billion), 2011-2015
Year Defense expenditure (US$ bn)
Defense growth percentage
2011
2012
2013
2014
2015
CAGR 2011-2015
Ministry of Finance, Norway and SDI analysis © SDI
Figure 1: Norwegian Defense Expenditure (US$ billion), 2011-2015
Ministry of Finance, Norway and SDI analysis © SDI
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
1
2
3
4
5
6
7
8
2011 2012 2013 2014 2015
Defe
nse e
xp
en
dit
ure
gro
wth
rate
(%
)
Defe
nse b
ud
get
(US
$ B
illi
on
)
Defense Expenditure (US$ bn) Defense Growth Percentage
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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The following table and figure show projected defense expenditure of Norway over the forecast period:
Table 2: Norwegian Defense Expenditure (US$ billion), 2016-2020
Year Defense expenditure (US$ bn)
Defense growth percentage
2016
2017
2018
2019
2020
CAGR 2016-2020
Ministry of Finance, Norway and SDI analysis © SDI
Figure 2: Norwegian Defense Expenditure (US$ billion), 2016-2020
Ministry of Finance, Norway and SDI analysis © SDI
0%
1%
2%
3%
4%
5%
6%
7%
8%
0
1
2
3
4
5
6
7
8
2016 2017 2018 2019 2020
Defe
nse e
xp
en
dit
ure
gro
wth
rate
(%
)
Defe
nse b
ud
get
(US
$ B
illi
on
)
Defence Expenditure (US$ bn) Defense expenditure growth %
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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1.2. Analysis of Defense Budget Allocation
1.2.1. Capital expenditure allocation is expected to increase over the forecast period
The Norwegian MoD allocated an average of XX% of capital expenditure between 2011 and 2015, which is
expected to continue to grow at a slightly higher rate during the forecast period. Capital expenditure is driven
by the number of procurements and modernization programs formulated by the Norwegian armed forces, and
increasing material and research and development (R&D) expenses. Its military modernization programs
include the acquisition of F-35 aircraft, AW101 helicopters, CV90 armored fighting vehicles (AFVs), Leopard
2A6 tanks, cyber security, a joint strike missile (JSM) system for the F-35 JSF, and the submarine
replacement program. Norwegian revenue expenditure is expected to be driven by an increase in training
expenditure and the number of army personnel, continued contributions to international peace and stability,
and enhancement of home guard training and coast guard capabilities.
The following table and chart display Norway‟s defense budget share of capital and revenue during the
historic period:
Table 3: Norway’s Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015
Year Capital Expenditure Share Revenue Expenditure Share
2011
2012
2013
2014
2015
Source: Ministry of Finance, Norway and SDI analysis © SDI
Figure 3: Norway’s Defense Budget Split Between Capital and Revenue Expenditure (%), 2011-
2015
Source: Ministry of Defense and SDI analysis © SDI
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015
Def
ense
Bu
dg
et S
pli
t (%
)
Capital Expenditure Revenue Expenditure
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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The following table and chart display Norway‟s defense budget share of capital and revenue expenditure over
the forecast period:
Table 4: Norway’s Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020
Year Capital Expenditure Share Revenue Expenditure Share
2016
2017
2018
2019
2020
Source: Ministry of Finance, Norway and SDI analysis © SDI
Figure 4: Norway’s Defense Budget Split Between Capital, Revenue and Other Expenditure (%), 2016-2020
Source: Ministry of Defense and SDI analysis © SDI
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 2017 2018 2019 2020
Defe
nse B
ud
get
Sp
lit
(%)
Capital Expenditure Revenue Expenditure
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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1.3. Homeland Security Market Size and Forecast
1.3.1. Norwegian homeland security expenditure is expected to grow at a CAGR of XX% over the forecast
period
The Royal Norwegian Ministry of Justice is responsible for internal security and the maintenance of law and
order in the country. Norway‟s homeland security (HLS) expenditure registered growth of XX% over 2011–
2015 and is expected to grow at a CAGR of XX% during the forecast period. This can be attributed to the
revised training and development plans of the Norwegian home guard, as formulated in the long-term
defense plan 2012. Moreover, the government has undertaken the Norwegian All-Weather Search and
Rescue Helicopter (NAWSARH) program to replace the existing fleet of Sea King helicopters. Under the
program, Norway has a contract for 16 AW101 helicopters for US$XX billion scheduled to be delivered during
2017–2020. Furthermore, the increase in HLS expenditure is due to the growing threat from radical and
terrorist organizations, such as Al-Qaeda, as a result of Norway‟s ongoing operations in Afghanistan and
Iraq.
The table and chart below show Norway‟s homeland security expenditure during the historic period:
Table 5: Norwegian Homeland Security Expenditure (US$ Million), 2011-2015
Year Homeland expenditure (US$ mn)
Growth Rate (%)
2011
2012
2013
2014
2015
Source: Ministry of Finance, Norway and SDI analysis © SDI
Figure 5: Norwegian Homeland Security Expenditure (US$ Million), 2011-2015
Source: Ministry of Finance, Norway and SDI analysis © SDI
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
0
1
2
3
4
5
6
2011 2012 2013 2014 2015
Gro
wth
rat
e (%
)
Ho
mel
and
Sec
uri
ty E
xpen
dit
ure
(U
S$
bn
)
Homeland Security Expenditure (US$ Bn) Growth Rate (%)
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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2. Industry Dynamics - Porter’s Five Forces Analysis
Figure 4: Industry Dynamics – Porter’s Five Forces Analysis
Source: SDI analysis © SDI
Intensity of Rivalry Bargaining Power of Supplier
Bargaining Power of Buyer
Barrier to Entry
Threat of Substitute
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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Report Methodology
SDI‟s dedicated research and analysis teams consist of experienced professionals with a background in
industry research and consulting in the defense sector. The following research methodology is followed for all
databases and reports:
Secondary Research
The research process begins with exhaustive secondary research to source reliable qualitative and
quantitative information related to the defense market. The secondary research sources that are typically
referred to include, but are not limited to:
Industry associations
National government documents and statistical databases
Company websites, annual reports, financial reports, broker reports, investor presentations
Industry trade journals and other literature
Internal and external proprietary databases
News articles, press releases, and webcasts specific to the companies operating in the market
Primary Research
SDI conducts hundreds of primary interviews a year with industry participants and commentators in order to
validate its data and analysis. A typical research interview fulfills the following functions:
Provides first-hand information on market size, market trends, growth trends, competitive landscape,
and future outlook
Helps to validate and strengthen secondary research findings
Further develops the analysis team‟s expertise and market understanding
Primary research involves e-mail interactions, telephone interviews, and face-to-face interviews for
each market category, division, and sub-division across geographies
The participants who typically take part in such a process include, but are not limited to:
Industry participants: CEOs, VPs, business development managers, market intelligence managers,
and national sales managers
External experts: investment bankers, valuation experts, research analysts, and key opinion leaders
specializing in defense markets
Conventions
Currency conversions are performed on the basis of average annual conversion rate format
calculations
All the values in tables, with the exception of compounded annual growth rate (CAGR) and
compounded annual rate of change (CARC), are displayed to one decimal place; therefore, due to
this rounding method, growth rates may appear inconsistent with absolute values
The forecasted values are projected on the basis of nominal values; the inflation was not taken into account
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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TABLE OF CONTENTS
1. Introduction ......................................................................................................................... 11
1.1. What is this Report About? ..........................................................................................................11
1.2. Definitions .....................................................................................................................................11
1.3. Summary Methodology .................................................................................................................14
1.4. SDI Terrorism Index ......................................................................................................................15
1.5. About Strategic Defence Intelligence ..........................................................................................15
2. Executive Summary ............................................................................................................ 16
3. Market Attractiveness and Emerging Opportunities ........................................................ 18
3.1. Defense Market Size Historical and Forecast..............................................................................19
3.1.1. Norwegian defense budget will grow at a CAGR of XX% over 2016–2020 ............................................. 19
3.1.2. Modernizing the armed forces, participating in international peacekeeping operations, and an interest
in the Arctic region are the main factors driving the Norwegian defense industry ................................................ 23
3.1.3. Defense expenditure as a percentage of GDP is expected to average XX% during the forecast period 25
3.2. Analysis of Defense Budget Allocation .......................................................................................27
3.2.1. Capital expenditure allocation is expected to increase over the forecast period ..................................... 27
3.2.2. Expenditure on the ‟other‟ segment expected to be the largest during forecast period ........................... 30
3.2.3. Army expenditure to grow at a CAGR of XX% over the forecast period to reach US$XX billion in 2020 32
3.2.4. Air force expenditure to grow at a CAGR of XX% over the forecast period ............................................. 37
3.2.5. Naval expenditure is expected to reach US$XX billion by 2020 .............................................................. 41
3.2.6. Procurement of material, buildings, and construction work expected to be the second largest defense
budget expenditure during the forecast period ..................................................................................................... 45
3.2.7. „Other‟ expenditure is expected to increase at a CAGR of XX% over the forecast period ....................... 49
3.3. Homeland Security Market Size and Forecast ............................................................................53
3.3.1. Norwegian homeland security expenditure is expected to grow at a CAGR of XX% over the forecast
period .................................................................................................................................................................. 53
3.3.2. Counter-terrorism and enhanced cyber security are expected to drive homeland security expenditure . 58
3.3.3. Norway is at a “low risk” of terrorism ........................................................................................................ 59
3.3.4. Norway has a terrorism index score of “zero”........................................................................................... 60
3.4. Benchmarking with Key Global Markets .....................................................................................61
3.4.1. Norwegian defense budget expenditure expected to increase over the forecast period ......................... 61
3.4.2. Norway has the one of the fastest-growing defense industries in Europe ............................................... 63
3.4.3. Norwegian defense budget as a percentage of GDP is expected to grow over the forecast period........ 64
3.4.4. Norway has a terrorism index score of zero ............................................................................................. 65
3.5. Market Opportunities: Key Trends and Growth Stimulators ......................................................67
3.5.1. Fighters and Multi-role aircraft .................................................................................................................. 67
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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3.5.2. Diesel Electric Submarine......................................................................................................................... 68
3.5.3. Multi-mission Helicopters .......................................................................................................................... 69
3.5.4. Multi-role Aircraft MRO ............................................................................................................................. 70
4. Defense Procurement Market Dynamics ........................................................................... 71
4.1. Import Market Dynamics ...............................................................................................................72
4.1.1. Norwegian defense imports are expected to increase over the forecast period ...................................... 72
4.1.2. Spain and the US are the largest arms suppliers to Norway.................................................................... 73
4.1.3. Ships accounted for the largest percentage share of overall defense imports ........................................ 74
4.2. Export Market Dynamics ..............................................................................................................75
4.2.1. Norway was among the top 20 countries with the highest volume of defense exports ............................ 75
4.2.2. Exports to European countries are expected to increase over the forecast period ................................. 76
4.2.3. The ‟other‟ category accounted for the majority of Norway‟s defense exports during 2009–2013 .......... 77
5. Industry Dynamics .............................................................................................................. 78
5.1. Five Forces Analysis.....................................................................................................................78
5.1.1. Bargaining power of Supplier: Low ........................................................................................................... 79
5.1.2. Bargaining power of Buyer: High .............................................................................................................. 79
5.1.3. Barrier to entry: Medium ........................................................................................................................... 79
5.1.4. Intensity of rivalry: High ............................................................................................................................ 79
5.1.5. Threat of Substitution: High ...................................................................................................................... 79
6. Market Entry Strategy ......................................................................................................... 80
6.1. Market Regulation .........................................................................................................................80
6.1.1. The Norwegian defense industry is largely driven by government regulation and offset policy ............... 80
6.1.2. The Norwegian government supports FDI ................................................................................................ 81
6.2. Market Entry Route .......................................................................................................................82
6.2.1. Entry through joint development programs ............................................................................................... 82
6.2.2. Foreign Military Sales (FMS) to Norway ................................................................................................... 83
6.2.3. Collaborations provide market entry opportunities ................................................................................... 84
6.3. Key Challenges .............................................................................................................................85
6.3.1. The Norwegian government prefers Scandinavian and European countries for defense trade .............. 85
6.3.2. The Norwegian export policy poses a challenge for domestic defense companies ................................. 85
7. Competitive Landscape and Strategic Insights ................................................................ 86
7.1. Competitive Landscape Overview ...............................................................................................86
7.2. Key Public Sector Companies ......................................................................................................86
7.2.1. Kongsberg Defense Systems: Overview .................................................................................................. 86
7.2.2. Kongsberg Defense Systems: Major Products and Services ................................................................... 87
7.2.3. Kongsberg Defense Systems: Recent Announcements and Strategic Initiatives .................................... 88
7.2.4. Kongsberg Defense Systems: alliances ................................................................................................... 90
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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7.2.5. Kongsberg Defense Systems: recent contract wins ................................................................................. 91
7.2.6. Kongsberg Defense Systems: financial analysis ...................................................................................... 93
7.2.7. Forsvarets Forsknings Institutt: overview ................................................................................................. 95
7.2.8. Forsvarets ForskningsInstitutt: defense products ..................................................................................... 95
7.2.9. Forsvarets ForskningsInstitutt: recent announcements and strategic initiatives ...................................... 95
7.2.10. Forsvarets ForskningsInstitutt: alliances .................................................................................................. 95
7.2.11. Forsvarets ForskningsInstitutt: recent contract wins ................................................................................ 96
7.2.12. NAMMO AS: overview .............................................................................................................................. 97
7.2.13. NAMMO AS: products and services ......................................................................................................... 97
7.2.14. NAMMO AS: recent announcements and strategic initiatives .................................................................. 98
7.2.15. NAMMO AS: alliances .............................................................................................................................. 99
7.2.16. NAMMO AS: recent contract wins .......................................................................................................... 100
7.2.17. NAMMO AS: financial analysis ............................................................................................................... 100
7.2.18. Kitron: overview ...................................................................................................................................... 103
7.2.19. Kitron: products and services ................................................................................................................. 103
7.2.20. Kitron: recent announcements and strategic initiatives .......................................................................... 103
7.2.21. Kitron: alliances ...................................................................................................................................... 104
7.2.22. Kitron: recent contract win ...................................................................................................................... 104
7.2.23. Kitron: financial analysis ......................................................................................................................... 105
7.3. Key Private Sector Companies .................................................................................................. 107
7.3.1. Thales Norway AS: overview .................................................................................................................. 107
7.3.2. Thales Norway AS: products and services ............................................................................................. 107
7.3.3. Thales Norway AS: recent announcements and strategic initiatives ..................................................... 108
7.3.4. Thales Norway AS: alliances .................................................................................................................. 108
7.3.5. Thales Norway AS: recent contract wins ................................................................................................ 109
7.3.6. UmoeMandal: overview .......................................................................................................................... 110
7.3.7. UmoeMandal: products and services ..................................................................................................... 110
7.3.8. Umoe Mandal: recent announcements and strategic initiatives ............................................................. 110
7.3.9. Umoe Mandal: alliances ......................................................................................................................... 111
7.3.10. Eidsvoll Electronics AS: overview ........................................................................................................... 112
7.3.11. Eidsvoll Electronics AS: products and services ...................................................................................... 112
7.3.12. Eidsvoll Electronics AS: recent announcements and strategic initiatives .............................................. 112
7.3.13. Eidsvoll Electronics AS: alliances ........................................................................................................... 112
7.3.14. Eidsvoll Electronics AS: recent contract wins ......................................................................................... 113
8. Business Environment and Country Risk ....................................................................... 114
8.1. Demographics ............................................................................................................................. 114
8.1.1. Total Rural population ............................................................................................................................. 114
8.1.2. Total urban population ............................................................................................................................ 115
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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8.1.3. Number of households............................................................................................................................ 116
8.2. Economic Performance .............................................................................................................. 117
8.2.1. GDP per capita at constant prices .......................................................................................................... 117
8.2.2. GDP at current prices (US$) ................................................................................................................... 118
8.2.3. Exports of goods and services (current US$ bn) .................................................................................... 119
8.2.4. Imports of goods and services (current US$ bn) .................................................................................... 120
8.2.5. Gross national disposable income (US$ billion) ..................................................................................... 121
8.2.6. Manufacturing output (US$ bn) .............................................................................................................. 122
8.2.7. Consumer price index ............................................................................................................................. 123
8.2.8. Wholesale price index ............................................................................................................................. 124
8.2.9. LCU per US$ (period average) ............................................................................................................... 125
8.2.10. LCU per EUR (period average) .............................................................................................................. 126
8.2.11. Market capitalization of listed companies (US$ bn) ............................................................................... 127
8.2.12. Market capitalization of listed companies (% of GDP) ........................................................................... 128
8.2.13. Total Government cash surplus/deficit (LCU billion) .............................................................................. 129
8.2.14. Government cash surplus/deficit as a percentage of GDP (LCU) .......................................................... 130
8.2.15. Central government debt (LCU billion) ................................................................................................... 131
8.2.16. Central government debt as a percentage of GDP (LCU) ...................................................................... 132
8.2.17. Goods exports as a percentage of GDP................................................................................................. 133
8.2.18. Goods imports as a percentage of GDP................................................................................................. 134
8.2.19. Goods balance as a percentage of GDP ................................................................................................ 135
8.2.20. Services imports as a percentage of GDP ............................................................................................. 136
8.2.21. Service exports as a percentage of GDP ............................................................................................... 137
8.2.22. Services balance as a percentage of GDP............................................................................................. 138
8.2.23. Foreign direct investment, net (BoP, current US$ billions) ..................................................................... 139
8.2.24. Net foreign direct investment as a percentage of GDP .......................................................................... 140
8.2.25. International reserves, including gold (US$ billion) ................................................................................ 141
8.3. Energy and utilities ..................................................................................................................... 142
8.3.1. Total Conventional Thermal Electricity Net Generation (Billion kWh) .................................................... 142
8.3.2. Hydroelectricity Net Generation (Billion kWh) ........................................................................................ 143
8.3.3. Total Conventional Thermal Electricity Installed Capacity (Million kW) ................................................. 144
8.3.4. Proved Reserves of Natural Gas (Trillion Cubic Feet) ........................................................................... 145
8.3.5. Total Petroleum Consumption (Thousand Barrels Per Day) .................................................................. 146
8.3.6. Crude Oil Proved Reserves (Billion Barrels) .......................................................................................... 147
8.3.7. Total Non-Hydro Renewable Electricity Net Generation (Billion kW) ..................................................... 148
8.4. Mineral ......................................................................................................................................... 149
8.4.1. Mining, Manufacturing, Utilities Output (US$ billion) .............................................................................. 149
8.5. Technology .................................................................................................................................. 150
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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8.5.1. Research and Development expenditure (LCU Thousands).................................................................. 150
8.6. Telecommunication .................................................................................................................... 151
8.6.1. Telephone lines (in mn) .......................................................................................................................... 151
8.6.2. Telephone lines Penetration Rate (per 100 people) ............................................................................... 152
9. Appendix ............................................................................................................................ 153
9.1. About SDI ..................................................................................................................................... 153
9.2. Disclaimer .................................................................................................................................... 153
Future of the Norwegian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020
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LIST OF FIGURES
Figure 1: Norwegian Defense Expenditure (US$ Billion), 2011–2015 ................................................................................................................. 19 Figure 2: Norwegian Defense Expenditure (US$ Billion), 2016–2020 ................................................................................................................. 20 Figure 3: Norwegian Defense Expenditure (NOK Billion), 2011–2015 ................................................................................................................. 21 Figure 4: Norwegian Defense Expenditure (NOK Billion), 2016–2020 ................................................................................................................. 22 Figure 5: Norwegian GDP Growth vs. Defense Expenditure Growth vs. Defense Expenditure as Percentage of GDP, 2011–2015 .................... 25 Figure 6: Norwegian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2016–2020 .................. 26 Figure 7:Norwegian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015 ............................................................ 28 Figure 8: Norwegian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020 ........................................................... 29 Figure 9: Norwegian Defense Expenditure Breakdown (%), 2011–2015 ............................................................................................................. 30 Figure 10: Norwegian Defense Expenditure Breakdown (%), 2016–2020 ........................................................................................................... 31 Figure 11: Norwegian Defense Expenditure for Army (US$ billion), 2011–2015 .................................................................................................. 33 Figure 12: Norwegian Defense Expenditure for Army (US$ billion), 2016–2020 .................................................................................................. 34 Figure 13: Norwegian Defense Expenditure for Army (NOK billion), 2011–2015 ................................................................................................. 35 Figure 14: Norwegian Defense Expenditure for Army (NOK billion), 2016–2020 ................................................................................................. 36 Figure 15: Norwegian Defense Expenditure for Air Force (US$ billion), 2011–2015............................................................................................ 37 Figure 16: Norwegian Defense Expenditure for Air Force (US$ billion), 2016–2020............................................................................................ 38 Figure 17: Norwegian Defense Expenditure for Air Force (NOK billion), 2011–2015 ........................................................................................... 39 Figure 18: Norwegian Defense Expenditure for Air Force (NOK billion), 2016–2020 ........................................................................................... 40 Figure 19: Norwegian Defense Expenditure for Navy (US$ billion), 2011–2015 .................................................................................................. 41 Figure 20: Norwegian Defense Expenditure for Navy (US$ billion), 2016–2020 .................................................................................................. 42 Figure 21: Norwegian Defense Expenditure for Navy (NOK billion), 2011–2015 ................................................................................................. 43 Figure 22: Norwegian Defense Expenditure for Navy (NOK billion), 2016–2020 ................................................................................................. 44 Figure 23: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (US$ billion), 2011–2015............... 45 Figure 24: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (US$ billion), 2016–2020............... 46 Figure 25: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (NOK billion), 2011–2015 .............. 47 Figure 26: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (NOK billion), 2016–2020 .............. 48 Figure 27: Norwegian Defense Expenditure for Other Categories (US$ billion), 2011–2015 ............................................................................... 49 Figure 28: Norwegian Defense Expenditure for Other Categories (US$ billion), 2016–2020 ............................................................................... 50 Figure 29: Norwegian Defense Expenditure for Other Categories (NOK billion), 2011–2015 .............................................................................. 51 Figure 30: Norwegian Defense Expenditure for Other Categories (NOK billion), 2016–2020 .............................................................................. 52 Figure 31: Norwegian Homeland Security Expenditure (US$ billion), 2011–2015 ............................................................................................... 54 Figure 32: Norwegian Homeland Security Expenditure (US$ billion), 2016–2020 ............................................................................................... 55 Figure 33: Norwegian Homeland Security Expenditure (NOK billion), 2011–2015 .............................................................................................. 56 Figure 34: Norwegian Homeland Security Expenditure (NOK billion), 2016–2020 .............................................................................................. 57 Figure 35: SDI Terrorism Heat Map, 2015 .......................................................................................................................................................... 59 Figure 36: SDI Terrorism Index, 2015 ................................................................................................................................................................. 60 Figure 37: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020 .......................................................................................................... 62 Figure 38: Benchmarking with World‟s Largest Defense Spenders (US$ Billion), 2015 and 2020 ....................................................................... 63 Figure 39: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2015 ..................................................................... 64 Figure 40: Fighters & Multi-Role Aircraft (US$ Million), 2015–2025..................................................................................................................... 67 Figure 41: Diesel Electric Submarine (US$ Million), 2015–2025 ........................................................................................................................ 68 Figure 42: Multi-mission Helicopters (US$ Million), 2015–2025 .......................................................................................................................... 69 Figure 43: Multi-role Aircraft MRO (US$ Million), 2015–2025 .............................................................................................................................. 70 Figure 44: Norwegian Defense Import Trend, 2009–2013 (TIV values*) ............................................................................................................. 72 Figure 45: Norwegian Defense Import by Country, 2009–2013 (TIV values) ....................................................................................................... 73 Figure 46: Norwegian Defense Imports by Category (%),2009–2013 .................................................................................................................. 74 Figure 47: Norwegian Defense Exports by Value (%), 2009–2013 ...................................................................................................................... 75 Figure 48: Norwegian Defense exports by Country (%), 2009–2013 ................................................................................................................... 76 Figure 49: Norwegian Defense Exports by Category (%), 2009–2013 ................................................................................................................ 77 Figure 50: Industry Dynamics – Porter‟s Five Forces Analysis ............................................................................................................................ 78 Figure 51: Kongsberg Defense Systems – Revenue Trend Analysis (NOK Million), 2010–2014 ......................................................................... 93 Figure 52: Kongsberg Defense Systems – Operating Profit Trend Analysis (NOK Million), 2010–2014............................................................... 94 Figure 53: Kongsberg Defense Systems – Net profit Trend Analysis (NOK Million), 2010–2014 ......................................................................... 94 Figure 54: NAMMO AS – Revenue Trend Analysis (NOK Million), 2009–2013 ..................................................................................................101
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Figure 55: NAMMO AS – Operating Profit Trend Analysis (NOK Million), 2009–2013 ........................................................................................102 Figure 56: NAMMO AS – Net Profit Trend Analysis (NOK Million), 2009–2013 ..................................................................................................102 Figure 57: Kitron – Revenue Trend Analysis (NOK Million), 2010–2014 ............................................................................................................105 Figure 58: Kitron – Operating Profit Trend Analysis (NOK Million), 2010–2014 ..................................................................................................106 Figure 59: Kitron – Net Profit Trend Analysis (NOK Million), 2010–2014 ............................................................................................................106 Figure 60: Norway Rural population (In million), 2015–2024 ..............................................................................................................................114 Figure 61: Norway Urban population (In million), 2015–2024 .............................................................................................................................115 Figure 62: Norway- Number of Households (Million), 2008–2017 ......................................................................................................................116 Figure 63: Norwegian GDP Per Capita at Constant Prices (US$), 2015–2024 ...................................................................................................117 Figure 64: Norway GDP at Current Prices (US$ Billion), 2015–2024 .................................................................................................................118 Figure 65: Norwegian Exports of goods and services (US$), 2004–2013...........................................................................................................119 Figure 66: Norwegian Imports of goods and services (US$), 2003–2012 ...........................................................................................................120 Figure 67: Norwegian Gross national disposable income (US$ billion), 2003-2012 ............................................................................................121 Figure 68: Norwegian Manufacturing output (US$ Billion), 2003–2012 ..............................................................................................................122 Figure 69: Norwegian Consumer price index, 2015–2024 ..................................................................................................................................123 Figure 70: Norwegian Wholesale price index, 2003–2012 .................................................................................................................................124 Figure 71: Norway LCU per US$, 2015–2024 ...................................................................................................................................................125 Figure 72: LCU per EUR (period average), 2015-2024 ......................................................................................................................................126 Figure 73: Norwegian market capitalization of listed companies (US$ billion), 2003–2012 .................................................................................127 Figure 74: Norwegian market capitalization of listed companies (% of GDP), 2003–2012 ..................................................................................128 Figure 75: Norwegian Total Government cash surplus/deficit (LCU billion), 2003–2012.....................................................................................129 Figure 76: Norwegian Government cash surplus/deficit as % of GDP (LCU), 2003–2012 ..................................................................................130 Figure 77: Norwegian- Central government debt (LCU billion), 2002–2011 ........................................................................................................131 Figure 78: Norwegian Central government debt as % of GDP (LCU), 2003–2012 .............................................................................................132 Figure 79: Norway- Goods exports as a % of GDP (%), 2003–2012 ..................................................................................................................133 Figure 80: Norway- Goods imports as a % of GDP (%), 2003–2012 ..................................................................................................................134 Figure 81: Norwegian Goods balance as a % of GDP (%), 2003–2012 .............................................................................................................135 Figure 82: Norwegian Services imports as a % of GDP (%), 2003–2012 ...........................................................................................................136 Figure 83: Norwegian Service exports as a % of GDP (%), 2003–2012 .............................................................................................................137 Figure 84: Norway- Services balance as a % of GDP (%), 2003–2012 ..............................................................................................................138 Figure 85: Norway- Foreign direct investment, net (BoP, current US$ billion), 2001–2010 .................................................................................139 Figure 86: Norwegian Net foreign direct investment as % of GDP, 2001-2009...................................................................................................140 Figure 87: Norwegian International reserves, including gold (US$ billion), 2002-2011 .......................................................................................141 Figure 88: Norway- Total Conventional Thermal Electricity Net Generation (Billion Kilowatt hours), 2002–2011 ................................................142 Figure 89: Norwegian Hydroelectricity Net Generation (Billion Kilowatt hours), 2003–2012 ...............................................................................143 Figure 90: Norwegian Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts), 2001–2010 ................................................144 Figure 91: Norwegian Proved Reserves of Natural Gas (Trillion Cubic Feet), 2004–2013 ..................................................................................145 Figure 92: Norwegian Total Petroleum Consumption (Thousand Barrels Per Day), 2004–2013 .........................................................................146 Figure 93: Crude Oil Proved Reserves (Billion Barrels), 2005–2014 ..................................................................................................................147 Figure 94: Total Non-Hydro Renewable Electricity Net Generation (Billion Kilowatts), 2003–2012 .....................................................................148 Figure 95: Norwegian Mining, Manufacturing, Utilities Output (US$ billion), 2003–2012 ....................................................................................149 Figure 96: Norwegian Research and development expenditure (LCU thousands), 2001–2010 ..........................................................................150 Figure 97: Norwegian Telephone lines, 2003–2012 ...........................................................................................................................................151 Figure 98: Norwegian Telephone lines Penetration Rate (per 100 people), 2003–2012 .....................................................................................152
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LIST OF TABLES
Table 1: Norwegian Defense Expenditure (US$ Billion), 2011–2015 ................................................................................................................... 19 Table 2: Norwegian Defense Expenditure (US$ Billion), 2016–2020 ................................................................................................................... 20 Table 3: Norwegian Defense Expenditure (NOK Billion), 2011–2015 .................................................................................................................. 21 Table 4: Norwegian Defense Expenditure (NOK Billion), 2016–2020 .................................................................................................................. 22 Table 5: Norwegian GDP Growth vs. Defense Expenditure Growth vs. Defense Expenditure as Percentage of GDP, 2011–2015 ..................... 25 Table 6: Norwegian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2016–2020 .................... 26 Table 7: Norwegian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015 ............................................................ 28 Table 8: Norwegian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020 ............................................................ 29 Table 9: Norwegian Defense Expenditure Breakdown (%), 2011–2015 .............................................................................................................. 30 Table 10: Norwegian Defense Expenditure Breakdown (%), 2016–2020 ............................................................................................................ 31 Table 11: Norwegian Defense Expenditure for Army (US$ billion), 2011–2015 ................................................................................................... 33 Table 12: Norwegian Defense Expenditure for Army (US$ billion), 2016–2020 ................................................................................................... 34 Table 13: Norwegian Defense Expenditure for Army (NOK billion), 2011–2015 .................................................................................................. 35 Table 14: Norwegian Defense Expenditure for Army (NOK billion), 2016–2020 .................................................................................................. 36 Table 15: Norwegian Defense Expenditure for Air Force(US$ billion), 2011–2015 .............................................................................................. 37 Table 16: Norwegian Defense Expenditure for Air Force, (US$ billion), 2016–2020 ............................................................................................ 38 Table 17: Norwegian Defense Expenditure for Air Force (NOK billion), 2011–2015 ............................................................................................ 39 Table 18: Norwegian Defense Expenditure for Air Force (NOK billion), 2016–2020 ............................................................................................ 40 Table 19: Norwegian Defense Expenditure for Navy (US$ billion), 2011–2015 ................................................................................................... 41 Table 20: Norwegian Defense Expenditure for Navy (US$ billion), 2016–2020 ................................................................................................... 42 Table 21: Norwegian Defense Expenditure for Navy (NOK billion), 2011–2015 .................................................................................................. 43 Table 22: Norwegian Defense Expenditure for Navy (NOK billion), 2016–2020 .................................................................................................. 44 Table 23: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (US$ billion), 2011–2015 ................ 45 Table 24: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (US$ billion), 2016–2020 ................ 46 Table 25: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (NOK billion), 2011–2015 ............... 47 Table 26: Norwegian Defense Expenditure for Procurement of Material, Buildings, and Construction Work (NOK billion), 2016–2020 ............... 48 Table 27: Norwegian Defense Expenditure for Other Categories (US$ billion), 2011–2015 ................................................................................ 49 Table 28: Norwegian Defense Expenditure for Other Categories (US$ billion), 2016–2020 ................................................................................ 50 Table 29: Norwegian Defense Expenditure for Other Categories (NOK billion), 2011–2015................................................................................ 51 Table 30: Norwegian Defense Expenditure for Other Categories (NOK billion), 2016–2020................................................................................ 52 Table 31: Norwegian Homeland Security Expenditure (US$ billion), 2011–2015 ................................................................................................ 54 Table 32: Norwegian Homeland Security Expenditure (US$ billion), 2016–2020 ................................................................................................ 55 Table 33: Norwegian Homeland Security Expenditure (NOK billion), 2011–2015 ................................................................................................ 56 Table 34: Norwegian Homeland Security Expenditure (US$ billion), 2016–2020 ................................................................................................ 57 Table 35: Benchmarking with Key Markets – 2011–2015 vs. 2016–2020............................................................................................................ 61 Table36: SDI Terrorism Index ............................................................................................................................................................................. 65 Table 37: Offset Multiplier Categories ................................................................................................................................................................. 80 Table 38: Market Entry Strategies by Key Foreign Companies ........................................................................................................................... 82 Table 39: FMS deals to Norway .......................................................................................................................................................................... 83 Table 40: Kongsberg Defense Systems – Major Products & Services ................................................................................................................ 87 Table 41: Kongsberg Defense Systems – Alliances ............................................................................................................................................ 90 Table 42: Kongsberg Defense Systems – Recent Contract Wins ........................................................................................................................ 91 Table 43: Forsvarets ForskningsInstitutt – Product Focus ................................................................................................................................... 95 Table 44: Forsvarets ForskningsInstitutt – Alliances ........................................................................................................................................... 95 Table 45: Forsvarets ForskningsInstitutt – Recent Contract Wins ....................................................................................................................... 96 Table 46: NAMMO AS – Product Focus ............................................................................................................................................................. 97 Table 47: NAMMO AS – Alliances ...................................................................................................................................................................... 99 Table 48: NAMMO AS – Recent Contract Wins ................................................................................................................................................100 Table 49: Kitron – Product Focus ......................................................................................................................................................................103 Table 50: Kitron – Alliances ...............................................................................................................................................................................104 Table 51: Kitron - Recent Contract Wins ............................................................................................................................................................104 Table 52: Thales Norway AS – product focus ....................................................................................................................................................107 Table 53: Thales Norway AS – Alliances ...........................................................................................................................................................108 Table 54: Thales Norway AS – Recent Contract Wins .......................................................................................................................................109
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Table 55: Umoe Mandal – Product Focus ..........................................................................................................................................................110 Table 56: Umoe Mandal – Alliances ..................................................................................................................................................................111 Table 57: Eidsvoll Electronics AS – Product Focus ............................................................................................................................................112 Table 58: Eidsvoll Electronics - Alliances ...........................................................................................................................................................112 Table 59: Eidsvoll - Recent Contract Wins .........................................................................................................................................................113