Synopsis This report is the result of SDI's extensive market and company research covering the South African 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. Summary Why was the report written? The Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain a market share in the South African defense industry. What is the current market landscape and what is changing? South African defense expenditure registered a CAGR of 9.2% during the review period and values US$5.3 billion in 2013. The focus of the South African government will be on crime, peacekeeping missions, border security, and military modernization initiatives to drive defense expenditure. What are the key drivers behind recent market changes? Crime, peacekeeping missions, border security and military modernization initiatives to drive defense expenditure.

1. Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts
to 2018
Synopsis
This report is the result of SDI's extensive market and company research covering the South African 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.
Summary
Why was the report written?
The Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and
Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by
foreign original equipment manufacturers (OEMs) to gain a market share in the South African defense
industry.
What is the current market landscape and what is changing?
South African defense expenditure registered a CAGR of 9.2% during the review period and values US$5.3
billion in 2013. The focus of the South African government will be on crime, peacekeeping missions, border
security, and military modernization initiatives to drive defense expenditure.
What are the key drivers behind recent market changes?
Crime, peacekeeping missions, border security and military modernization initiatives to drive defense
expenditure.
What makes this report unique and essential to read?
The Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and
Forecasts to 2018 provides detailed analysis of the current industry size and growth expectations from 2014 to
2018, including highlights of key growth stimulators. It also benchmarks the industry against key global
markets and provides a detailed understanding of emerging opportunities in specific areas.
Scope
The report provides detailed analysis of the current industry size and growth expectations from 2014 to
2018, 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 South African
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 South Africa 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.
Reasons To Buy
The African Economic Outlook data for 2009 shows corruption in South Africa to be the fourth-highest of
the 53 countries in the African region. In 2009, South Africa's corruption perception index (CPI), a score that
Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

2. is based on the degree of corruption as perceived by industry professionals and country analysts, and ranges
between 10 (highly uncorrupt) and 0 (highly corrupt), is estimated at 4.7 - far above the African average of
2.86. The decision made by South Africa's first democratically elected government to purchase ZAR30 billion
(US$3.5 billion) worth of weapons in 1999 has been the single largest, and one of the most controversial,
defense procurement deals in post-apartheid South African history. In South Africa, the lack of transparency in
arms procurement processes remains a common challenge, obstructing an informed debate on any arms trade
treaty among countries and aiding corruption. Furthermore, distrust between countries often escalates, leading
to the excessive and destabilizing accumulation of arms. Managing the weapons acquisition process is a
challenge to both the political and technical systems in South Africa. The South African defense policy
frameworks, written in the 1990s, have been proven unsuitable by several procurements, most notably the
US$3.5 billion Strategic Defense Package of 1999, which was marred by corruption and irregularity. As a
result, functions, mandates, and roles that were not envisaged at the time have been written into current
defense force roles.
Key Highlights
Increasing concerns regarding the obsolescence of South Africa's military arsenal has enabled many foreign
companies to enter the South African defense market by offering superior defense products. For instance,
Boeing made its initial entry into the South African defense market with a major presence at the Africa
Aerospace and Defense Expo in 2008, and the offer of the CH-47 Chinook as a solution to South Africa's
heavy airlift requirements. In the review period, there were a growing number of joint ventures between
European and South African defense firms. The South African government is encouraging joint ventures as
these deals enable the transfer of technology, allow domestic firms to enter the global supply chain, and
encourage long-term investment into research and development. For instance, Saab AB, a defense company
based in Sweden, entered into a US$35 million joint venture with a South African defense company, Denel, in
order to manufacture aircraft components. [South Africa's arms imports are dominated by Sweden due to the
purchase of Gripen aircraft in 2010 and 2011 respectively. In order to replace Dassault Mirage III, the South
African Air Force (SAAF) acquired 26 Swedish-built Saab Gripen C and D model fighters in 2012. During
2008-2012, 61.2% of the country's arms imports were from Sweden, 23.1% from Germany, 7.7% from UK,
5.3% from USA, 1.6% from Italy, 0.9% from Israel, and 0.3% from France.
table Of Content
1 Introduction
1.1. What Is This Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. Sdi Research Terrorism Index
1.5. About Strategic Defence Intelligence
2 Executive Summary
Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

3. 3 Market Attractiveness And Emerging Opportunities
3.1. Defense Market Size Historical And Forecast
3.1.1. South African Defense Expenditure Expected To Grow At A Slow Pace During The Forecast Period At
A Cagr Of 7.3%
3.1.2. Crime, Peacekeeping Missions, Border Security And Military Modernization Initiatives To Drive
Defense Expenditure
3.1.3. Military Expenditure As A Percentage Of Gdp Is Expected To Increase During The Forecast Period
3.2. Analysis Of Defense Budget Allocation
3.2.1. Capital Expenditure Share To Decrease Over The Next Five Years
3.2.2. Capital Expenditure For Air Force To Be Highest With Fastest Growth Rate
3.2.3. Army Capital Expenditure To Grow At A Modest Pace
3.2.4. Naval Expenditure On New Acquisitions Expected To Grow Steadily During The Forecast Period
3.3. Homeland Security Market Size And Forecast
3.3.1. Homeland Security (hls) Expenditure Expected To Grow Moderately Over The Forecast Period
3.3.2. Rising Threat Of Global Terrorism Could Affect The Country, Though Threat Level Is Currently Low
3.3.3. South Africa Faces A Moderate Level Of Threat From Foreign Terrorist Organizations
3.4. Benchmarking With Key Global Markets
3.4.1. South African Defense Expenditure Expected To Remain Modest Compared To Leading Spenders
3.4.2. The Country Will Continue To Be A Small Player In The Global Defense Market
3.4.3. South African Defense Expenditure As A Percentage Of Gdp Is Lower Than The Majority Of Leading
Defense Spenders
3.4.4. South Africa Has A Moderate Per-capita Defense Expenditure
3.4.5. South Africa Faces Negligible Threat From Foreign Terrorist Organizations
3.5. Market Opportunities: Key Trends And Growth Stimulators
3.5.1. Central Logistics:
3.5.2. Infantry Fighting Vehicles (ifvs):
3.5.3. Mine Resistant Ambush Protected Vehicle (mrap):
3.5.4. Counter Ied Vehicles:
3.5.5. Attack Aircraft Mro:
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense Imports Expected To Increase During The Forecast Period
4.1.2. Sweden Dominated South African Defense Imports During The Review Period
4.1.3. Aircraft Were The Major Defense Imports During The Review Period
4.2. Export Market Dynamics
4.2.1. Us Dominates South African Defense Export Market During The Review Period
4.2.2. Armored Vehicles Were The Major Defense Exports During The Review Period
5 Industry Dynamics
5.1. Five Forces Analysis
Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

4. 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: Medium
6 Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset Policy Ensures Support For Local Companies
6.1.2. Fdi Is Channeled To Benefit Local Business
6.2. Market Entry Route
6.2.1. Foreign Oems Find Alternative Routes Into The Market
6.2.2. Joint Ventures And Collaborations Provide Market Entry Opportunities
6.3. Key Challenges
6.3.1. Corruption And Bribery
6.3.2. Lack Of Transparency
6.3.3. Lack Of Relevant Defense Policy
7 Competitive Landscape And Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Private Sector Companies
7.2.1. Denel: Overview
7.2.2. Denel: Major Products And Services
7.2.3. Denel: Recent Announcements And Strategic Initiatives
7.2.4. Denel: Alliances
7.2.5. Denel: Recent Contract Wins
7.2.6. Denel: Financial Analysis
7.2.7. Ansys Limited: Overview
7.2.8. Ansys Limited: Major Products And Services
7.2.9. Ansys Limited: Alliances
7.2.10. Ansys Limited: Recent Contract Wins
7.2.11. Ansys Limited: Financial Analysis
7.2.12. Key Private Sector Companies
7.2.13. Reutech: Overview
7.2.14. Reutech: Products And Services
7.2.15. Reutech: Recent Announcements And Strategic Initiatives
7.2.16. Reutech: Alliances
7.2.17. Reutech: Recent Contract Wins
7.2.18. Saab Grintek: Overview
7.2.19. Saab Grintek: Products And Services
7.2.20. Saab Grintek: Recent Announcements And Strategic Initiatives
Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

5. 7.2.21. Saab Grintek: Alliances
7.2.22. Saab Grintek: Recent Contract Wins
7.2.23. Land Systems South Africa: Overview
7.2.24. Land Systems South Africa: Products And Services
7.2.25. Land Systems South Africa: Recent Announcements And Strategic Initiatives.
7.2.26. Land Systems South Africa: Alliances
7.2.27. Land Systems South Africa: Recent Contract Wins
7.2.28. Ivema: Overview
7.2.29. Ivema: Products And Services
7.2.30. Ivema: Recent Contract Wins
7.2.31. Aerosud: Overview
7.2.32. Aerosud: Products And Services
7.2.33. Aerosud: Recent Announcements And Strategic Initiatives
7.2.34. Aerosud: Alliances
7.2.35. Aerosud: Recent Contract Wins
7.2.36. Turbomeca Africa: Overview
7.2.37. Turbomeca Africa: Products And Services
7.2.38. Turbomeca Africa: Alliances
7.2.39. Turbomeca Africa: Recent Contract Wins
7.2.40. Global Armour: Overview
7.2.41. Global Armour: Products And Services
7.2.42. Global Armour: Recent Announcements And Strategic Initiatives
7.2.43. Global Armour: Alliances
7.2.44. Global Armour: Recent Contract Wins
7.2.45. Milkor (pty) Ltd: Overview
7.2.46. Milkor (pty) Ltd.: Products And Services
7.2.47. Milkor (pty) Ltd.: Recent Announcements And Strategic Initiatives
7.2.48. Milkor (pty) Ltd.: Recent Contract Wins
7.2.49. Advanced Technologies And Engineering: Overview
7.2.50. Advanced Technologies And Engineering: Products And Services
7.2.51. Advanced Technologies And Engineering: Recent Announcements And Strategic Initiatives
7.2.52. Advanced Technologies And Engineering: Recent Contract Wins
7.2.53. Tellumat Defence: Overview
7.2.54. Tellumat Defence: Products And Services
7.2.55. Tellumat Defence: Recent Announcements And Strategic Initiatives
7.2.56. Tellumat Defence: Alliances
7.2.57. Tellumat Defense: Recent Contract Wins
8 Business Environment And Country Risk
8.1. Demographics And Social Statistics
8.1.1. Urban Population
8.1.2. Rural Population
Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

6. 8.1.3. Number Of Households
8.2. Economic Performance
8.2.1. Gdp Per Capita
8.2.2. Gdp, Current Prices
8.2.3. Consumer Price Index
8.2.4. Wholesale Price Index
8.2.5. Local Currency Unit Per Usd
8.2.6. Lending Rate
8.2.7. Deposit Rate
8.2.8. Real Interest Rate
8.2.9. Goods Exports As % Of Gdp
8.2.10. Goods Imports As % Of Gdp
8.2.11. Goods Trade Surplus/deficit As % Of Gdp
8.2.12. Service Imports As % Of Gdp
8.2.13. Service Exports As % Of Gdp
8.2.14. Service Trade Surplus/deficit As % Of Gdp
8.2.15. Foreign Direct Investments
8.2.16. Net Foreign Direct Investments As % Of Gdp
8.2.17. International Reserves, Including Gold
8.2.18. Market Capitalization Of Listed Companies
8.2.19. Market Capitalization Of Listed Companies As % Of Gdp
8.3. Energy And Utilities
8.3.1. Conventional Thermal Electricity Net Generation (billion Kwh)
8.3.2. Conventional Thermal Electricity Installed Capacity (billion Kw)
8.3.3. Petroleum Consumption
8.3.4. Total Non Hydro Renewable Electricity Net Generation (billion Kilowatts)
8.3.5. Crude Oil Proved Reserves (billion Barrels)
8.3.6. Hydroelectricity Net Generation (billion Kilowatt Hours)
8.3.7. Nuclear Electricity Net Generation (billion Kilowatt Hours)
8.3.8. Total Electricity Imports (billion Kilowatt Hours)
8.3.9. Total Electricity Exports (billion Kilowatt Hours)
8.4. Infrastructure
8.4.1. Air Transport, Freight (million Ton-km)
8.4.2. Rail Lines
8.4.3. Overall Construction
8.5. Minerals
8.5.1. Mining, Manufacturing, Utilities Output
8.6. Technology
8.6.1. Patents Granted
8.6.2. Research And Development Expenditure
8.7. Telecommunication
8.7.1. Telephone Lines
8.7.2. Telephone Lines Penetration Rate
Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

7. 8.7.3. Mobile Cellular Subscriptions
8.7.4. Mobile Cellular Subscriptions Penetration Rate
9 Appendix
9.1. About Sdi
9.2. Disclaimer
9 Appendix
9.1. About Sdi
9.2. Disclaimer
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Future of the South African Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018