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TOC for Future of the Polish Defense Industry – Market Attractiveness, Competitive Landscape, and Forecasts to 2022

130 pages report Published in Mar 2017

Table of Contents

1. Introduction 9
1.1. What is this Report About? 9
1.2. Definitions 9
1.3. Summary Methodology 11
1.4. About Strategic Defence Intelligence 13

2. Executive Summary 14

3. Market Attractiveness and Emerging Opportunities 16
3.1. Current Market Scenario 17
3.1.1. Primary threat perception 17
3.1.2. Military Doctrine & Strategy 18
3.1.3. Military Fleet Size 20
3.1.4. Procurement Programs 23
3.1.5. Ongoing procurement programs 23
3.1.6. Future procurement programs 24
3.1.7. Social, Political and Economic Environment & Support for Defense Projects 25
3.1.8. Political & Strategic Alliances 26
3.2. Defense Market Size Historical and Forecast 27
3.2.1. Polish defense expenditure is expected to reach US$11.9 billion by 2022 27
3.2.2. Ukrainian crisis, military modernization initiatives and peacekeeping missions to fuel defense expenditure over the forecast period 30
3.2.3. Polish defense budget to be at 1.8% of GDP over 2018-2022 32
3.3. Analysis of Defense Budget Allocation 34
3.3.1. Capital expenditure allocation expected to increase during the forecast period 34
3.3.2. Capital expenditure to increase at a CAGR of 6.58% over 2018-2022 36
3.3.3. The majority of the defense budget is allocated to military intelligence services and crisis response operations, which are anticipated to increase over the forecast period 39
3.3.4. Poland to invest US$5.2 billion on its land forces during the forecast period 41
3.3.5. Air force budget to grow at a CAGR of 11.61% during the forecast period 44
3.3.6. Naval expenditure expected to grow at a CAGR of 16.81% over the forecast period 47
3.3.7. A major portion of Poland’s defense budget to be allocated to the Other category 49
3.3.8. Per capita defense expenditure is expected to increase during the forecast period 51
3.4. Homeland Security Market Size and Forecast 53
3.4.1. Polish homeland security market to increase at a CAGR of 1.70% over the forecast period 53
3.4.2. Homeland security expenditure to be triggered by the country’s efforts to counter drug smuggling, human trafficking, and cyber attacks 55
3.4.3. Poland faces no known threat from terrorist organizations 57
3.4.4. Poland faces low level of threat from foreign terrorist organizations 58
3.4.5. Poland has a terrorism index score of “0.0” 60
3.5. Benchmarking with Key Global Markets 61
3.5.1. Poland’s defense growth rate is expected to remain modest over the forecast period 61
3.5.2. Poland’s defense spending is low compared to other European nations 63
3.5.3. Poland allocates a moderate share of GDP for defense expenditure 64
3.6. Market Opportunities: Key Trends and Growth Stimulators 65
3.6.1. Missile Defense System 65
3.6.2. Multi-mission Helicopter 66
3.6.3. Submarine 67
3.6.4. Corvettes 68

4. Defense Procurement Market Dynamics 69
4.1. Import Dynamics 70
4.1.1. Defense imports fluctuated during the period 2012-2016 70
4.1.2. Poland sourced the majority of its arms imports from Finland 71
4.1.3. Missiles and armored vehicles are the major military hardware imports 72
4.2. Export Market Dynamics 73
4.2.1. Polish defense exports expected to increase over the forecast period 73
4.2.2. Poland exports the majority of its defense goods to the US 74
4.2.3. Aircraft and armored vehicles constitute the majority of Polish defense exports 75

5. Industry Dynamics 76
5.1. Five Forces Analysis 76
5.1.1. Bargaining power of supplier: low 77
5.1.2. Bargaining power of buyer: high 77
5.1.3. Barrier to entry: medium 77
5.1.4. Intensity of rivalry: high 77
5.1.5. Threat of substitution: high 78

6. Market Entry Strategy 79
6.1. Market Regulation 79
6.1.1. Polish government introduces new Offset Act for defense equipment procurements 79
6.2. Market Entry Route 80
6.2.1. Budgeting Process 80
6.2.2. Procurement Policy & Process 82
6.2.3. Joint ventures and acquisitions of domestic companies are the preferred entry routes 83
6.2.4. Foreign OEMs gain industry access through joint research and development programs 84
6.3. Key Challenges 85
6.3.1. Dominance of EU defense companies impede the progress of non-European firms 85
6.3.2. Lack of transparency in the public procurement process proves a major challenge 85

7. Competitive landscape and Strategic Insights 86
7.1. Competitive landscape Overview 86
7.2. Key Foreign Companies 88
7.2.1. BAE Systems: overview 88
7.2.2. BAE Systems: main products and services 88
7.2.3. BAE Systems: recent announcements and strategic initiatives 88
7.2.4. BAE Systems: alliances 90
7.2.5. BAE Systems: recent contract wins 90
7.2.6. The Boeing Company: overview 91
7.2.7. The Boeing Company: main products and services 91
7.2.8. The Boeing Company: recent announcements and strategic initiatives 91
7.2.9. The Boeing Company: alliances 92
7.2.10. Lockheed Martin: overview 93
7.2.11. Lockheed Martin: main products and services 93
7.2.12. Lockheed Martin: recent announcements and strategic initiatives 93
7.2.13. Lockheed Martin: alliances 94
7.2.14. Lockheed Martin: recent contract wins 94
7.2.15. CAE: overview 95
7.2.16. CAE: main products and services 95
7.2.17. CAE: recent contract wins 95
7.2.18. Sikorsky, a Lockheed Martin Company: overview 96
7.2.19. Sikorsky Aircraft Corporation: main products and services 96
7.2.20. Sikorsky, a Lockheed Martin Company: recent announcements and strategic initiatives 96
7.2.21. Sikorsky, a Lockheed Martin Company: alliances 97
7.2.22. Sikorsky, a Lockheed Martin Company: recent contract wins 97
7.2.23. Alenia Aermacchi: overview 98
7.2.24. Alenia Aermacchi: main products and services 98
7.2.25. Alenia Aermacchi: recent announcements and strategic initiatives 98
7.2.26. Alenia Aermacchi: alliances 99
7.2.27. Alenia Aermacchi: recent contract wins 99
7.3. Key Public Companies 100
7.3.1. Polish Defense Holding: overview 100
7.3.2. Polish Defense Holding: main products 100
7.3.3. Polish Defense Holding: recent announcements and strategic initiatives 102
7.3.4. Polish Defense Holding: alliances 102
7.3.5. Polish Defense Holding: recent contract wins 104
7.3.6. PZL Mielec: overview 105
7.3.7. PZL Mielec: products 105
7.3.8. PZL Mielec: recent announcements and strategic initiatives 105
7.3.9. PZL Mielec: alliances 106
7.3.10. PZL Mielec: recent contract wins 106
7.3.11. Wojskowe Zak?ady Uzbrojenia SA: overview 107
7.3.12. Wojskowe Zak?ady Uzbrojenia SA: main products and services 107
7.3.13. Wojskowe Zak?ady Uzbrojenia SA: recent announcements and strategic initiatives 108
7.3.14. Wojskowe Zak?ady Uzbrojenia SA: alliances 108
7.3.15. Huta Stalowa Wola: overview 109
7.3.16. Huta Stalowa Wola: main products and services 109
7.3.17. Huta Stalowa Wola: recent announcements and strategic initiatives 109
7.3.18. Huta Stalowa Wola: alliances 110
7.3.19. Huta Stalowa Wola: recent contract wins 110
7.3.20. ROSOMAK S.A.: overview 111
7.3.21. ROSOMAK S.A.: main products and services 111
7.3.22. ROSOMAK S.A.: recent announcements and strategic initiatives 111
7.3.23. ROSOMAK S.A.: recent contract wins 112

8. Business Environment and Country Risk 113
8.1. Economic Performance 113
8.1.1. GDP Per Capita 113
8.1.2. GDP, Current Prices 114
8.1.3. Exports of goods and services, current prices 115
8.1.4. Imports of goods and services, current prices 116
8.1.5. Gross National disposable income (USD Billion) 117
8.1.6. Local Currency Unit per US Dollar 118
8.1.7. Market Capitalization of Listed Companies 119
8.1.8. Market Capitalization of Listed Companies a percentage of GDP 120
8.1.9. Government Cash Surplus/Deficit as a percentage of GDP 121
8.1.10. Goods exports as a percentage of GDP 122
8.1.11. Goods imports as a percentage of GDP 123
8.1.12. Goods Trade Surplus/Deficit as a percentage of GDP 124
8.1.13. Service Imports as a percentage of GDP 125
8.1.14. Service Exports as a percentage of GDP 126
8.1.15. Foreign direct investment, net (BoP, current US$ Bn) 127
8.1.16. Net foreign direct investment as % of GDP 128
8.1.17. Mining, Manufacturing, Utilities Output (LCU Billion) 129

9. Appendix 130
9.1. About SDI 130
9.2. Disclaimer 130

List of Tables

Table 1: Polish Land Forces Strength 20
Table 2: Polish Navy Strength 21
Table 3: Polish Air Force Strength 22
Table 4: Polish Ongoing Procurement Programs 23
Table 5: Polish Future Procurement Programs 24
Table 6: Polish Defense Expenditure (PLN billion & US$ billion), 2013-2022 28
Table 7: Polish GDP Growth vs. Defense Expenditure as a Percentage of GDP, 2013-2022 32
Table 8: Polish Defense Budget Split Between Capital and Revenue Expenditure (%),2013-2022 34
Table 9: Polish Defense Capital Expenditure (PLN Billion & US$ Billion), 2013-2022 37
Table 10: Polish Defense Expenditure Allocation (% Share), 2013-2022 39
Table 11: Polish Defense Expenditure for Army (PLN Billion & US$ Million), 2013-2022 42
Table 12: Polish Defense Expenditure for Air Force (PLN Billion & US$ Million), 2013-2022 45
Table 13: Polish Defense Expenditure for Navy (PLN Billion & US$ Million), 2013-2022 47
Table 14: Polish Defense Expenditure for Other Categories (PLN Billion & US$ Billion), 2013-2022 49
Table 15: Polish Per-Capita Defense Expenditure (US$), 2013-2022 51
Table 16: Polish Homeland Security Expenditure (PLN Billion & US$ Billion), 2013-2022 53
Table 17: Terrorism Index, 2017 58
Table 18: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022 61
Table 19: Polish Budget Formation Timetable: 80
Table 20: Market Entry Strategies by Key Foreign Companies 83
Table 21: Competitive Landscape of the Polish Defense Industry 86
Table 22: BAE Systems, Main Products 88
Table 23: BAE Systems, Alliances 90
Table 24: BAE Systems - Recent Contract Wins 90
Table 25: The Boeing Company, Main Products 91
Table 26: The Boeing Company, Alliances 92
Table 27: Lockheed Martin, Main Products 93
Table 28: Lockheed Martin, Alliances 94
Table 29: Lockheed Martin, Recent Contract Wins 94
Table 30: CAE, Main Products and Services 95
Table 31: CAE, recent contract wins 95
Table 32: Sikorsky, a Lockheed martin Company Main Products and Services 96
Table 33: Sikorsky, a Lockheed Martin Company Alliances 97
Table 34:Sikorsky, a Lockheed Martin Company: recent contract wins 97
Table 35: Alenia Aermacchi, Main Products and Services 98
Table 36: Alenia Aermacchi, Alliances 99
Table 37: Alenia Aermacchi, Recent Contract Wins 99
Table 38: Polish Defense Holding, Major Products 100
Table 39: Polish Defense Holding, Alliances 102
Table 40: Polish Defense Holding, Recent Contract Wins 104
Table 41: PZL Mielec - Main Products 105
Table 42: PZL Mielec, Alliances 106
Table 43: PZL Mielec, Recent Contract Wins 106
Table 44: Wojskowe Zak?ady Uzbrojenia SA, Main Products and Services 107
Table 45: Wojskowe Zak?ady Uzbrojenia SA, Alliances 108
Table 46: Huta Stalowa Wola, Main Products and Services 109
Table 47: Huta Stalowa Wola, Alliances 110
Table 48: Huta Stalowa Wola, Recent Contract Wins 110
Table 49: ROSOMAK S.A.: Main Products and Services 111
Table 50: ROSOMAK SA., Recent Contract Wins 112

List of Figures

Figure 1: Polish Defense Expenditure (PLN Billion), 2013-2022 28
Figure 2: Polish Defense Expenditure (US$ Billion), 2013-2022 29
Figure 3: Polish GDP Growth vs. Defense Expenditure as Percentage of GDP, 2013-2022 33
Figure 4:Polish Defense Budget Split Between Capital and Revenue Expenditure (%),2013-2022 35
Figure 5: Polish Defense Capital Expenditure (PLN Billion), 2013-2022 37
Figure 6: Polish Defense Capital Expenditure (US$ Billion), 2013-2022 38
Figure 7: Polish Defense Expenditure Allocation (% Share), 2013-2022 40
Figure 8: Polish Army Defense Budget (PLN Billion), 2013-2022 42
Figure 9: Polish Army Defense Budget (US$ Million), 2013-2022 43
Figure 10: Polish Air Force Defense Budget (PLN Billion), 2013-2022 45
Figure 11: Polish Air Force Defense Budget (US$ Million), 2013-2022 46
Figure 12: Polish Navy Defense Budget (PLN Billion), 2013-2022 48
Figure 13: Polish Navy Defense Budget (US$ Million), 2013-2022 48
Figure 14: Polish Other Category Defense Budget (PLN Billion), 2013-2022 50
Figure 15: Polish Other Category Defense Budget (US$ Billion), 2013-2022 50
Figure 16: Poland Per Capita Expenditure (US$), 2013-2022 52
Figure 17: Polish Homeland Security Budget (PLN Billion), 2013-2022 54
Figure 18: Polish Homeland Security Budget (US$ billion), 2013-2022 54
Figure 19: Terrorism Heat Map 57
Figure 20: Terrorism Index, 2017 60
Figure 21: Benchmarking with Key Markets - 2013-2017 vs. 2018-2022 62
Figure 22: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2017 and 2022 63
Figure 23: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2017 64
Figure 24: Missile Defense System Market Size (US$ Million), 2017-2027 65
Figure 25: Multi-role Helicopter Market Size (US$ Million), 2017-2027 66
Figure 26: Diesel Electric Submarine Market Size (US$ Million), 2017-2027 67
Figure 27: Corvettes Market Size (US$ Million), 2017-2027 68
Figure 28: Polish Defense Imports (US$ Million), 2012-2016 70
Figure 29: Polish Defense Imports by Country (%),2012-2016 71
Figure 30: Polish Defense Imports by Category (%), 2012-2016 72
Figure 31: Polish Defense Exports by Value (US$ Million), 2012-2016 73
Figure 32: Polish Defense Exports by Country (%), 2012-2016 74
Figure 33: Polish Defense Exports by Category (%), 2012-2016 75
Figure 34: Industry Dynamics: Porter’s Five Forces Analysis 76
Figure 35: Polish GDP Per Capita, 2015-2025 113
Figure 36: Polish GDP, Current Prices (In US$ Billions), 2015-2025 114
Figure 37: Polish Exports of goods and services, current prices (LCU Billion), 2005- 2014 115
Figure 38: Polish Imports of goods and services, current prices (LCU Billion), 2005- 2014 116
Figure 39: Polish Gross National Disposable Income (US$ Billion), 2005- 2012 117
Figure 40: Local Currency Unit per US$- Exchange Rate , 2015-2024 118
Figure 41: Polish Market Capitalization of Listed Companies (US$ Billion), 2005-2012 119
Figure 42: Polish Market Capitalization of Listed Companies as percentage of GDP, 2005-2012 120
Figure 43: Polish Government Cash Surplus/Deficit as a percentage of GDP, 2005-2012 121
Figure 44: Poland’s Goods Exports as a percentage of GDP, 2005-2013 122
Figure 45: Poland’s Goods Imports as a percentage of GDP, 2005-2013 123
Figure 46: Poland’s Goods Trade Surplus/Deficit as a percentage of GDP, 2003-2012 124
Figure 47: Poland’s Service Imports as a percentage of GDP, 2005-2013 125
Figure 48: Poland’s Service Exports as % of GDP, 2005-2013 126
Figure 49: Poland’s Foreign direct investment, net (BoP, current US$ Bn), 2005-2013 127
Figure 50: Poland’s Net foreign direct investment as % of GDP, 2005-2013 128
Figure 51: Poland’s Mining, Manufacturing, Utilities Output (LCU Billion), 2005-2014 129

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