Market Overview of the Modernisation of Asian Navies
Global Military Naval Vessels and Support in Service
Amartya De, Senior Consultant Aerospace & Defense Practice, Asia Pacific
1 Market Overview - Key Questions
What is the potential for military naval vessels and SIS market despite budget constraints witnessed globally?
Which segments have the highest growth potential and why?
Which are the countries providing the highest growth opportunities to the market and what will be the future scope in these countries?
Source: Frost & Sullivan
2 Executive Summary
Global Military Naval Vessels Market
Market Size at Compound Market Revenue End of Forecast Annual Growth Period Rate
$32.00 B $39.99 B 2.5%
(2013) (2022) (2013–2022)
Global Support in Service Market
Market Size at Compound Market Revenue End of Forecast Annual Growth Period Rate
$15.29 B $21.24 B 3.7%
(2013) (2022) (2013–2022)
Decreasing Stable Increasing Source: Frost & Sullivan
3 Market Overview - Segmentation
Market Global Military Naval Vessels and SIS Market
Central Middle Latin North Regions Africa APAC Europe Asia East America America
Supercarriers Light Aircraft Carriers Amphibious Vessels
Cruisers Destroyers Frigates Corvettes Platforms Ballistic Nuclear-powered Attack Conventional Submarines Missile Submarines (SSBN) Submarines (SSN) (SSK)
Logistics and Support Mine Warfare Patrol and Costal Vessels Vessels
Line Maintenance Heavy Maintenance Services Spare Parts Modernisation Training Source: Frost & Sullivan
4 Market Overview - Segmentation by Platform Role and SIS Activity
Key Takeaway: The market shares of frigate, nuclear-powered ballistic missile submarine (SSBN), and heavy maintenance segments will see the highest growth by 2022.
Forecast for Global Military Naval Vessels Forecast for Global Military SIS Market: 2022 Market: 2022 Amphibious Vessel Line Training 3.1% Maintenance Super Carrier 7.0% Corvette 4.6% 10.9% 4.5%
Nuclear- Destroyer Powered 11.5% Heavy Attack Maintenance Submarine 33.2% (SSN) Modernisation 17.5% 31.6%
Frigate 19.1%
Conventional Submarine Light Aircraft (SSK) Carrier 9.8% 3.7% Nuclear- Logistics and Powered Support Vessel Patrol and Mine Warfare Ballistic Missile 3.5% Spare Parts Coastal 2.3% Submarine Vessel 23.6% (SSBN) 3.2% 10.9%
5 Drivers and Restraints
Total Military Naval Vessels and SIS Market: Key Market Drivers and Restraints, Global, 2014–2022 1–2 Years 3–5 Years 6–9 Years Implementation of extensive re-armament programs in APAC and the Middle East countries results in increase in demand for modern military vessels. The growing market of second-hand defence platforms offers an opportunity to naval platform suppliers.
Market Drivers Increasing number of piracy and terrorism acts boosts demand for patrol and coastal vessels and private convoys services.
Demand for local partnerships and technology transfer to provide new military vessels and SIS of complex naval platforms make market penetration difficult. Emerging regional participants particularly in APAC are increasing competition on the military naval vessels and SIS market. Defence budget cuts cause significant pressure on Market Restraints procurement of naval vessels and related SIS programmes.
Impact: High Medium Low Source: Frost & Sullivan
6 Military Naval Vessels Market - Revenue Forecast by Region
Key Takeaway: The high jump of revenue in APAC after 2015 will be due to expected introduction of light aircraft carriers into service by China and India.
Military Naval Vessels Market: 2013–2022
20.0 Fastest growing regions
18.0
16.0
14.0 2nd biggest region after North America 12.0
10.0
8.0
6.0 Revenue( in $US billion) Fastest growth in Central Asia expected from Russian Navy 4.0
2.0
0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Asia-Pacific 7.37 8.60 8.78 10.71 9.73 10.60 9.43 9.76 9.14 9.32 Central Asia 4.36 4.44 4.52 5.26 5.38 5.51 5.65 5.88 6.03 6.18 Latin America 1.28 1.30 1.32 1.36 1.38 1.40 1.86 1.91 1.93 1.52 The Middle East 0.80 0.81 0.83 0.88 0.90 0.92 0.94 0.99 1.01 1.03 Source: Frost & Sullivan
7 Military Naval Vessels Market - Revenue Forecast by Vertical Market
Key Takeaway: The frigate segment will generate the highest cumulative revenue during the forecast period.
Global Military Naval Vessels Market: Forecast by Vertical Market, 2013–2022
25.0 TOP 3 Segments
20.0
15.0 Revenue( in $US billion) 10.0 Frigate ($US 66.9 billion)
5.0 Nuclear Submarine SSN($US 65.4 billion)
0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Destroyer 3.93 3.98 4.02 4.22 4.27 5.11 5.17 5.27 4.54 4.61 Frigate 5.83 5.97 6.11 6.42 6.59 6.76 6.95 7.22 7.43 7.64 SSN 5.80 5.91 6.02 6.25 6.36 6.48 7.04 7.19 7.32 7.01
Source: Frost & Sullivan
8 SIS Market—Percent Revenue Forecast by Region
Key Takeaway: APAC is a prominent region for SIS standing at 3 rd place globally after NA and EU.
Global SIS Market: Revenue Forecast by Region, 2013–2022
7.0
6.0
5.0
4.0
3.0 Asia Pacific ($US 32.5 billion expenditure in SIS) Revenue( in $US billion) 2.0
1.0
0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Asia-Pacific 2.70 2.84 2.85 3.12 3.13 3.15 3.16 3.84 3.86 3.88 Central Asia 1.15 1.19 1.20 1.44 1.46 1.48 1.51 1.54 1.57 1.59 The Middle East 0.19 0.21 0.21 0.22 0.22 0.23 0.23 0.26 0.27 0.27
Source: Frost & Sullivan
9 SIS Market - Revenue Forecast by Vertical Market
Key Takeaway: The heavy maintenance segment will generate the highest revenue during the forecast period. SIS Market: Percent Revenue Forecast by Vertical Market, Global, 2013–2022 25.0
20.0
15.0 Heavy Maintenance
10.0 Spare Parts
5.0 Revenue( in $US billion) Mordernisation
0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Line Maintenance 0.84 0.85 0.86 0.91 0.92 0.93 0.94 0.97 0.98 0.99 Heavy Maintenance 4.20 4.23 4.26 6.13 6.18 6.24 6.29 6.91 6.97 7.04 Spare Parts 4.40 4.44 4.47 4.58 4.62 4.66 4.71 4.91 4.96 5.01 Modernisation 4.88 5.10 5.14 5.22 5.27 5.32 5.38 6.57 6.64 6.71 Training 0.98 0.99 1.00 1.30 1.32 1.33 1.34 1.46 1.48 1.49
Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan
10 Competitive Analysis
Total Military Naval Vessels and SIS Market: Competitive Landscape and Key Participants
Lockheed Martin, BAE Systems, Northrop Grunmann, General Dynamics Marine Systems, Tier I DCNS, BAE Systems, CMN, TKMS, Lürssen, Navantia, Damen Shipyards Group, Daewoo Shipbuilding & Marine Engineering, Hyundai Heavy Industries, Mitsubishi Heavy Industries, Kawasaki Heavy Industries, CSOI, CSSC, CSIC, Mazagon Docks Limited, Hindustan Shipyard Limited, United Shipbuilding Corporation, Sevmash, Admiralty Shipyard, Baltiysky Zavod, Severnaya Verf, Baltic Shipyard,Parokhodniy Shipyard, Sredne-Nevskiy Shipyard, Abu Dhabi Ship Building
Tier II Rockwell Collins, Hispano-Suiza, Rolls Royce, CAE, Safran, SMA Engine Snecma, VIJA, Raytheon, Selex, Kongsberg, ST Engineering, Saab, Elbit Systems, Indra, Rubin Design Bureau, NPO Mashinostroyeniya, Samsung Heavy Industries, BMZ, KTZ and Zvezda, MAN Diesel & Turbo SE (a subgroup of MAN SE), Wärtsilä, MAK, Caterpillar, Deutz, MTU, Saab AB, QinetiQ, Thales, MBDA, Boeing, ATLAS ELEKTRONIK, BMT Defence Services, Thales
Tier III Local suppliers
Source: Frost & Sullivan
11 APAC Breakdown
12 APAC Military Naval Vessels Market - Revenue Forecast by Vertical Market
Key Takeaway: Military vessels fleet modernisation will drive APAC’s expenditure on military naval vessels. The frigate and conventional submarine (SS(SSKK)) have maximum interest in APAC.
Military Naval Vessels Market: Revenue Forecast by Vertical Market, APAC, 2013–2022
8.00
7.00
6.00 Destroyer
5.00
Revenue($ Billion) 4.00 Frigate
3.00
2.00 SSK (Conventional submarine) 1.00
0.00 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Destroyer 1.41 1.42 1.43 1.55 1.57 2.37 2.39 2.44 1.67 1.69 Frigate 1.76 1.78 1.80 1.94 1.96 1.99 2.02 2.08 2.11 2.15 SSK 1.56 1.60 1.69 1.84 1.88 1.86 1.91 1.99 2.04 2.09 SSBN 0.42 0.44 0.45 0.51 0.53 0.55 0.57 0.60 0.63 0.65 SSN 0.29 0.30 0.30 0.33 0.34 0.34 0.35 0.36 0.37 0.38
Source: Frost & Sullivan
13 APAC SIS Market—Revenue Forecast by Vertical Market
Key Takeaway: The complexity of newly procured vessvesselsels and extensive modernisation programmes will result in high growth of the SIS market in APAC. SIS Market: Revenue Forecast by Vertical Market, APAC, 2013–2022
4.50
4.00
3.50
3.00
2.50 Heavy Maintenance
2.00
1.50 Spare Parts Revenue($ Billion) 1.00
0.50 Mordernisation
0.00 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Line Maintenance 0.15 0.15 0.15 0.16 0.16 0.16 0.16 0.18 0.18 0.18 Heavy Maintenance 0.86 0.86 0.86 1.20 1.20 1.20 1.21 1.55 1.56 1.57 Spare Parts 0.77 0.77 0.77 0.80 0.80 0.81 0.81 0.95 0.95 0.96 Modernisation 0.75 0.88 0.88 0.77 0.78 0.78 0.78 0.91 0.91 0.92 Training 0.17 0.18 0.18 0.20 0.20 0.20 0.20 0.25 0.26 0.26 Year
Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan
14 APAC Military Naval Vessels and SIS Market—Competitive Analysis
Military Naval Vessels and SIS Market: Competitive Landscape and Key Participants, APAC
Tier I DCNS, DSME, HHI, Samsung Heavy Industries, BAE Systems, ST Engineering, Austal, ASC, Mazagon Docks Limited, Hindustan Shipyard Limited, Mitsubishi Heavy Industries, Kawasaki Heavy Industries, CSOI, CSSC, CSIC
Boustead Naval Shipyards, Tier II Unithai Shipyard and Engineering, Vietnam Shipbuilding Industry Group, United Technologies, Thales, Snecma, Tata Group, MBDA, Raytheon, Boeing, ATLAS ELEKTRONIK, Rolls-Royce, General Electric, MTU, MAN Diesel & Turbo SE, Iveco, Wärtsilä, Sulzer, Volvo Penta, Guascor, ABC, CAE Safran, Samsung, YANMAR, Thales
Tier III Local suppliers
Source: Frost & Sullivan
15 Executive Summary
• Despite the global economic crisis, the military naval vessels and SIS market is relatively immune to austerity measures
• Frost & Sullivan estimates that cumulative military naval vessels revenue will be $375.67 billion from 2013 to 2022 expanding at a CAGR of 2.5%. However, cumulative support in service (SIS) revenue from 2013 to 2022 which is estimated to be $183.27 billion will expand at a higher CAGR of 3.7%.
• APAC is the most attractive market for foreign shipbuilding companies in terms of access to the market and expected implementation of naval procurement projects.
• Frigates are becoming primary military vessels in most of the naval fleets. This segment will generate the highest cumulative revenue of $66.91 billion during 2013 to 2022.
• Western shipbuilding companies should be prepared for growing competition from the Asia-Pacific (APAC) naval companies.
• Partnership with local mainly state-owned shipyards represent the best route to market in most of the countries.
Source: Frost & Sullivan
16 Thank You
Amartya De Senior Consultant Aerospace & Defense Practice, Asia Pacific Tel: +603-6207-1071 Mob: +601-2980-2084 Fax: +603.6201.7402 www.aerospace.frost.com
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