Future of the Norwegian Defense Industry Market ... · to 2020” report offers the reader detailed analysis of the defense budget over the next five years. Alongside it offers insights

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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

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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.


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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


-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


4

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


Figure 2: Norwegian Defense Expenditure (US$ billion), 2016-2020


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 %


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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


6

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


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


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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


Figure 5: Norwegian Homeland Security Expenditure (US$ Million), 2011-2015


-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 (%)


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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


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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


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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


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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


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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


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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


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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


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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


16

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

Documents

Future of the Norwegian Defense Industry Market ... · to 2020” report offers the reader detailed analysis of the defense budget over the next five years. Alongside it offers insights