Ukrainian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Ukrainian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

  • June 2019 •
  • 123 pages •
  • Report ID: 5783481 •
  • Format: PDF
Ukrainian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024

Summary
Ukraine’s total defense expenditure is anticipated to be US$34 billion cumulatively over the forecast period.As a part of the ongoing military reforms, the Ukrainian Ministry of Defense plans to restructure and reform the fighting capability of its armed forces to the western model of network centric maneuver warfare by 2020.

The country’s government is also attempting to reorganize the country’s armed forces and bring it up to NATO standards. Although progress has been sluggish, the country is steadily transforming its military strategy and operational command and control from the Soviet model to modern western NATO standards.

Ukraine is still faced with a festering, well-funded and equipped insurgency movement within the country that threatens to transform into a long drawn, high attrition battle. The swift capitulation of Ukrainian armed forces during the battle of Crimea and the subsequent losses suffered during the battle in Shakhtarsk Raion, Battle of Horlivka, and Battle of Debaltseve have highlighted the military deficiencies of the Ukrainian Armed Forces, further reinforced by Ukraine’s continued inability to dislodge the insurgents from the Donbass region.

In 2019, the country allocated US$3.8 billion for defense and its allocations for national defense are expected to increase form US$4.5 billion in 2020 to US$7.1 billion in 2024, reflecting a CAGR of 12.51%. The country is anticipated to allocate cumulative expenditure of US$34 billion over the forecast period. Driven by the need to contain terrorism, narcotics trafficking and even human trafficking, the Ukrainian government is anticipated to significantly invest in overhauling the country’s moribund internal security apparatus. Ukrainian homeland security (HLS) expenditure increased from US$1.7 billion in 2015 to US$3.1 billion in 2019, reflecting a CAGR of 15.89% during 2015–2019. Ukrainian homeland security expenditure is expected to increase from US$3.6 billion in 2020 to US$6.8 billion by 2024, reflecting a CAGR of 17.18% over the forecast period.

Ukraine, having inherited a vast defense manufacturing complex from the erstwhile Soviet Union, has access to a relatively competent and self-reliant defense industry base which is capable of meeting most of the country’s basic defense requirements.China accounted for 27% of Ukraine’s exports and was the single largest customer during 2014–2018.

Although Ukraine’s relations with Russia have deteriorated, Russia still accounted for the second highest share of Ukrainian defense exports by value at 23.2%.

Ever since its independence in 1991, the Ukrainian defense industry has suffered from perpetual underfunding, which has significantly impacted its efficiency. The Ukrainian defense budget for 2019, which is valued at US$3.7 billion, earmarked almost 83.6% of the defense budget for revenue expenses, setting aside just US$621.4 million for capital expenditure, compelling the Ukrainian MoD to adopt crowd funding strategies to fund military procurements. Since 2014, Ukrainians were reported to have donated an average of US$35,000 every day to crowd fund army acquisitions, which has enabled the country to proceed with the procurement of small reconnaissance UAV.

The report “Ukrainian Defense Market - Attractiveness, Competitive Landscape and Forecasts to 2024” offers detailed analysis of the Ukrainian 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 Ukrainian defense industry market size and drivers: detailed analysis of the Ukrainian defense industry during 2020–2024, 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
- Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
- Market opportunities: list of the top ten defense investment opportunities over the next 5 years
- Competitive landscape and strategic insights: analysis of the competitive landscape of the Ukrainian defense industry

Companies mentioned - Raytheon, Antonov ASTC, RPC Fort, The Kharkiv Morozov Machine Building Design Bureau (KMDB),The Malyshev Plant, AvtoKrAZ Holding Company and Motor Sich.

Scope
- With one of the highest annual defense expenditure growth rates in the world, 29.3% in 2018, Ukraine mantained a robust growth indefense spending even in 2019, making it an attractive defense market. Between 2015 and 2019, the country’s capital expenditure allocation stood at an average of 18.9% of the total defense budget, and is expected to slightly decline to 17.9% over the forecast period.
- Overall, Ukraine is projected to spend a total of US$5.1 billion on the acquisition of military hardware between 2020 and 2024.

Reasons to buy
- This report will give the user confidence to make the correct business decisions based on a detailed analysis of the Ukrainian 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
- Profiles of the top domestic and foreign defense manufacturers . This will provide the user with a total competitive landscape of the sector
- A deep qualitative analysis of the Ukrainian defense industry covering sections including demand drivers, Key Trends , and latest industry contracts.
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