The Global Military Ammunition Market 2013 2023 1
TABLE OF CONTENTS 1 Introduction... 11 1.1 What is this Report About?... 11 1.2 Definitions... 11 1.3 Summary Methodology... 13 1.4 About Strategic Defence Intelligence... 14 2 Executive Summary... 15 3 Global Military Ammunition Market Size and Drivers... 17 3.1 Military Ammunition Market Size and Forecast 2013 2023... 17 3.1.1 Global military ammunition market to show positive growth during the forecast period... 17 3.2 Global Military Ammunition Market Regional Analysis... 18 3.2.1 North America to register highest spending in the global military ammunition market... 18 3.2.2 Spending on small caliber ammunition significantly driving North American military ammunition market during the forecast period... 20 3.2.3 Military ammunition market in the Asia-Pacific region is expected to witness consistent levels of growth over the forecast period... 22 3.2.4 Europe is expected to register a moderate growth in military ammunition market... 24 3.2.5 Military ammunition market in the Middle East to increase during the forecast period... 26 3.2.6 Brazil expected to be the highest spender in the military ammunition sector in the Latin American region 28 3.2.7 African markets expected to witness a gradual increase in military ammunition spending over the forecast period 29 3.3 Military Ammunition Sub-Sector Market Size Composition... 30 3.3.1 Artillery ammunition expected to constitute the largest segment... 30 3.3.2 Small caliber ammunition expected to constitute the second largest segment... 33 3.3.3 Mortar ammunition to be the third largest segment in the global ammunition market... 34 3.3.4 Large caliber ammunition to account for a share of 6.7% of the total ammunition market... 35 3.3.5 Market for medium caliber ammunition to grow at a CAGR of 1.99% over the forecast period... 36 3.4 Demand Drivers and Growth Stimulators... 37 3.4.1 Force modernization initiatives by various countries to drive the global ammunition market... 37 3.4.2 Regional conflicts and instability to drive ammunition procurement... 37 3.5 Defense Budget Spending Review... 38 3.5.1 European capital expenditure expected to increase during the forecast period... 38 3.5.2 Asian defense budgets expected to increase at a robust pace... 39 3.5.3 North American defense expenditure projected to increase marginally during the forecast period... 40 3.5.4 Modernization programs likely to drive defense expenditure in South American countries... 41 2
3.5.5 Military budgets of African countries expected to increase during the forecast period... 42 3.5.6 Defense budgets of Middle Eastern countries likely to increase during the forecast period... 43 3.6 Defense Modernization Review... 44 3.6.1 Debt crisis in Europe leading to postponement of modernization plans... 44 3.6.2 Arms race in Asia reflected in modernization plans... 44 3.6.3 North American modernization plans marginally affected by economic recession... 44 3.6.4 Modernization programs in South America driven by replacement of obsolete armaments... 44 3.6.5 African countries mainly spending on infantry weapons, and surveillance and monitoring equipment, to slow growing crime rate... 45 3.6.6 Middle Eastern countries pursuing modernization of air force and air defense systems... 45 4 Industry Trends, Recent Developments and Challenges... 46 4.1 Technological Developments... 46 4.1.1 Precision Extended Range Munition to provide enhanced precision... 46 4.1.2 Smart ammunition to result in increased lethality... 46 4.1.3 Lead free small caliber ammunition in a step to reduce environmental contamination... 46 4.2 Market Trends... 48 4.2.1 The US Army developing lightweight ammunition to reduce soldier load... 48 4.2.2 Precision munitions finding increasing usage among the militaries... 48 4.3 Industry Consolidation... 49 4.3.1 Joint programs expected to increase over the forecast period... 49 4.4 Key Challenges... 50 4.4.1 Reducing the burden of soldiers poses a key challenge for military ammunition market... 50 4.4.2 Lack of skilled labor in military ammunition industry poses a challenge for its growth... 50 4.4.3 Withdrawal of US troops from Afghanistan to negatively impact the military ammunition market... 51 5 SWOT Analysis of the Military Ammunition Market... 52 5.1 Strengths... 53 5.1.1 Continuously expanding need for ammunition in the Asia Pacific, Middle East and Africa... 53 5.1.2 Technological advancements driving the market the market for military ammunition... 53 5.2 Weaknesses... 55 5.2.1 Lack of advanced manufacturing capability and skilled workforce to hinder growth of the sector... 55 5.2.2 Troop drawdown from Afghanistan to decrease demand for military ammunition... 55 5.3 Opportunities... 56 5.3.1 Ammunition shortage among major militaries such as the US and India... 56 5.3.2 Emerging economies in the Asia Pacific region to provide ample scope for ammunition sales... 56 5.4 Threats... 58 5.4.1 US and European economic crisis... 58 3
5.4.2 New Arms Trade Treaty to negatively impact the military ammunition market... 58 5.4.3 Emerging markets developing indigenous ammunition manufacturing capabilities... 58 6 Country Analysis Military Ammunition Market... 60 6.1 United States Market Size and Forecast 2013 2023... 61 6.1.1 Small caliber ammunition expected to account for the largest share of US military ammunition market. 65 6.1.2 Spending on artillery ammunition expected to account for the second largest share... 66 6.1.3 Mortar ammunition segment is expected to constitute the third largest market share in the US... 67 6.2 Russia Market Size and Forecast 2013 2023... 68 6.2.1 Small caliber ammunition segment expected to lead the Russian ammunition market... 71 6.2.2 Expenditure on artillery ammunition to be robust during the forecast period... 72 6.3 The United Kingdom Market Size and Forecast 2013 2023... 73 6.3.1 Small caliber ammunition market to remain consistent during the forecast period... 77 6.3.2 Artillery ammunition accounts for the second largest share of the UK spending on ammunition... 79 6.3.3 Large caliber ammunition market in the UK to increase during the forecast period... 80 6.4 France Market Size and Forecast 2013 2023... 81 6.4.1 Small caliber ammunition segment expected to account for the largest share during the forecast period84 6.4.2 Artillery ammunition segment expected to account for the second largest segment of expenditure... 85 6.4.3 Mortar ammunition to constitute 16.8% of French military ammunition market... 86 6.5 China Market Size and Forecast 2013 2023... 87 6.5.1 Artillery ammunition market in China to account for the highest segment of expenditure... 90 6.5.2 Chinese expenditure on small caliber ammunition expected to grow at a CAGR of 0.98% over the forecast period... 91 6.6 Australian Market Size and Forecast 2013 2023... 92 6.6.1 Small caliber ammunition expected to account for the largest segment of expenditure... 95 6.6.2 Market for artillery ammunition to grow at a CAGR of 1.84% over the forecast period... 97 6.6.3 Mortar ammunition expected to account for the third largest area of expenditure... 98 6.7 India Market Size and Forecast 2013 2023... 99 6.7.1 Artillery ammunition to account for the largest segment of expenditure... 102 6.7.2 Market for small caliber ammunition to account for the second largest segment... 104 6.7.3 Medium caliber ammunition to account for the third largest share of Indian expenditure... 106 6.8 Israel Market Size and Forecast 2013 2023... 107 6.8.1 Small caliber ammunition segment expected to lead the Israeli military ammunition market... 110 6.8.2 Artillery ammunition market in Israel to increase during the forecast period... 111 6.9 Saudi Arabia Market Size and Forecast 2013 2023... 112 6.9.1 Saudi Arabia s expenditure on small caliber ammunition segment to increase at a CAGR of 0.14%... 115 6.9.2 Artillery ammunition segment is expected to exhibit a CAGR of 2.66% during the forecast period... 116 4
6.10 Brazil Market Size and Forecast 2013 2023... 117 6.10.1 Small caliber ammunition to account for the highest proportion of expenditure by Brazil on military ammunition... 120 6.10.2 Artillery ammunition accounts for second largest share of Brazilian spending on military ammunition. 121 6.11 Venezuela Market Size and Forecast 2013 2023... 122 6.11.1 Venezuelan expenditure on artillery ammunition to account for the largest share... 124 6.12 Algeria Market Size and Forecast 2013 2023... 125 6.12.1 Artillery ammunition segment to account for a major portion of expenditure by Algeria... 128 7 Major Military Ammunition Programs... 129 7.1 Small Caliber Ammunition... 129 7.1.1 US - Procurement of Small Caliber Rifle Ammunition... 129 7.1.2 Russia Procurement of Ammunition for AK-12 rifles... 130 7.1.3 India Multi-caliber assault rifle ammunition... 131 7.2 Medium Caliber Ammunition... 132 7.2.1 UK - Munition Acquisition Supply Solutions (Mass) Program... 132 7.2.2 France Procurement of 40mm cannon and ammunition... 133 7.2.3 Australia Procurement of 40mm low-velocity air-bursting ammunition... 134 7.3 Large Caliber Ammunition... 135 7.3.1 India Ammunition for anti-material rifles... 135 7.3.2 US Procurement of M1040 105mm Canister Cartridges... 136 7.4 Mortar Ammunition... 137 7.4.1 Russia - Ammunition for 2S31 Vena Self-propelled mortar... 137 7.4.2 France 120mm mortar ammunition under Metric Precision Munition (MPM) Program... 138 7.4.3 India 120mm mortar ammunition under Metric Precision Munition (MPM) Program... 139 7.5 Artillery Ammunition... 140 7.5.1 India 155mm ammunition for howitzers... 140 7.5.2 Israel Ammunition for M109A2/A3 Doher self-propelled howitzers (SPH)... 141 7.5.3 Russia Ammunition for MSTA-S 2S19 152mm Self-Propelled Howitzers... 142 7.5.4 US Procurement of M107 Projectile Metal Parts... 143 8 Competitive Landscape and Strategic Insights... 144 8.1 Competitive Landscape overview... 144 8.1.1 Alliant Techsystems Inc.: Overview... 144 8.1.2 Alliant Techsystems Inc.: Products and Services... 144 8.1.3 Alliant Techsystems Inc.: Recent Announcements and Strategic Initiatives... 145 8.1.4 Alliant Techsystems Inc.: Alliances... 145 8.1.5 Alliant Techsystems Inc.: Recent Contract Wins... 147 5
8.1.6 Alliant Techsystems Inc.: Financial Analysis... 147 8.1.7 General Dynamics-Ordnance and Tactical Systems: Overview... 149 8.1.8 General Dynamics-Ordnance and Tactical Systems: Products and Services... 149 8.1.9 General Dynamics-Ordnance and Tactical Systems: Recent Announcements and Strategic Initiatives149 8.1.10 General Dynamics-Ordnance and Tactical Systems: Alliances... 149 8.1.11 General Dynamics-Ordnance and Tactical Systems: Recent Contract Wins... 150 8.1.12 BAE Systems: Overview... 150 8.1.13 BAE Systems: Products and Services... 150 8.1.14 BAE Systems: Recent announcements and Strategic initiatives... 151 8.1.15 BAE Systems: Alliances... 151 8.1.16 BAE Systems: Recent Contract Wins... 151 8.1.17 BAE Systems: Financial Analysis... 152 8.1.18 Rheinmetall Defence: Overview... 154 8.1.19 Rheinmetall Defense: Products and Services... 154 8.1.20 Rheinmetall Defence: Recent announcements and Strategic initiatives... 154 8.1.21 Rheinmetall Defence: Alliances... 154 8.1.22 Rheinmetall Defence: Recent Contract Wins... 155 8.1.23 Rheinmetall Defence: Financial Analysis... 155 8.1.24 Nexter Munitions: overview... 157 8.1.25 Nexter Munitions.: products and services... 157 8.1.26 Nexter Munitions: alliances... 157 8.1.27 Nexter Munitions: recent contract wins... 158 8.1.28 L-3 Communications Corp.: overview... 158 8.1.29 L-3 Communications Corp.: products and services... 158 8.1.30 L-3 Communications Corp: Recent announcements and Strategic initiatives... 158 8.1.31 L-3 Communications Corp: recent contract wins... 159 8.1.32 Nammo AS: overview... 159 8.1.33 Nammo AS: products and services... 159 8.1.34 Nammo AS: Recent announcements and Strategic initiatives:... 159 8.1.35 Nammo AS: alliances... 160 8.1.36 Nammo AS: recent contract wins... 160 8.1.37 Olin Corporation: Overview... 160 8.1.38 Olin Corporation: Products and Services... 160 8.1.39 Olin Corporation: Recent announcements and Strategic initiatives... 161 8.1.40 Olin Corporation: Alliances... 161 8.1.41 Olin Corporation: Recent Contract Wins... 161 8.1.42 Olin Corporation: Financial Analysis... 161 6
9 Appendix... 164 9.1 Methodology... 164 9.2 About SDI... 164 9.3 Disclaimer 164 7
LIST OF FIGURES Figure 1: Global Military Ammunitions Market (US$ Billion), 2013 2023... 17 Figure 2: Military Ammunition Market Breakdown by Region (%), 2013 2023... 19 Figure 3: North American Military Ammunition Market (US$ Billion), 2013 2023... 21 Figure 4: Asia-Pacific Military Ammunition Market (US$ Billion), 2013 2023... 23 Figure 5: European Military Ammunition Market (US$ Billion), 2013 2023... 25 Figure 6: Middle East Military Ammunition Market (US$ Million), 2013 2023... 27 Figure 7: Latin American Military Ammunition Market (US$ Million), 2013 2023... 28 Figure 8: African Military Ammunition Market (US$ Million), 2013 2023... 29 Figure 9: Military Ammunition Market Breakdown by Segment (%), 2013 2023... 31 Figure 10: Artillery Ammunition Market Size (US$ Billion), 2013 2023... 32 Figure 11: Small Caliber Ammunition Market Size (US$ Billion), 2013 2023... 33 Figure 12: Mortar Ammunition Market Size (US$ Billion), 2013 2023... 34 Figure 13: Large Caliber Ammunition Market Size (US$ Million), 2013 2023... 35 Figure 14: Medium Caliber Ammunition Market Size (US$ Million), 2013 2023... 36 Figure 15: Defense Capital Expenditure of Top Three European Defense Spenders (US$ Billion), 2013 2023... 38 Figure 16: Defense Capital Expenditure of Top Three Asian Defense Spenders (US$ Billion), 2013 2023... 39 Figure 17: Defense Capital Expenditure of Top North American Defense Spenders (US$ Billion), 2013 2023... 40 Figure 18: Defense Capital Expenditure of Top Three South American Defense Spenders (US$ Billion), 2013 2023... 41 Figure 19: Defense Capital Expenditure of Top Three African Countries (US$ Billion), 2013 2023... 42 Figure 20: Defense Capital Expenditure of Top Three Middle Eastern Defense Spenders (US$ Billion), 2013 2023... 43 Figure 21: Military Ammunition Market in the US (US$ Billion), 2013 2023... 62 Figure 22: Military Ammunition Market Split By Category in the US (%), 2013 2023... 64 Figure 23: Small Caliber Market Size in the US (US$ Million), 2013 2023... 65 Figure 24: Artillery Ammunition Market Size in the US (US$ Million), 2013 2023... 66 Figure 25: Mortar Ammunition Market Size in the US (US$ Million), 2013 2023... 67 Figure 26: Ammunitions Market in Russia (US$ Million), 2013 2023... 69 Figure 27: Russian Ammunition Market Split by Sector (%), 2013 2023... 70 Figure 28: Small Caliber Ammunition Market Size in Russia (US$ Million), 2013 2023... 71 Figure 29: Artillery Ammunition Market Size in Russia (US$ Million), 2013 2023... 72 Figure 30: Ammunitions Market in the UK (US$ Million), 2013 2023... 74 Figure 31: Ammunition Market Split by Sector in UK (%), 2013 2023... 76 Figure 32: Small Caliber Ammunition Market Size in the UK (US$ Million), 2013 2023... 78 Figure 33: Artillery Ammunition Market Size in the UK (US$ Million), 2013 2023... 79 Figure 34: Large Caliber Ammunition Market Size in the UK (US$ Million), 2013 2023... 80 Figure 35: Military Ammunition Market in France (US$ Million), 2013 2023... 82 Figure 36: Military Ammunition Market Split by Sector in France (%), 2013 2023... 83 Figure 37: Small Caliber Ammunition Market Size in France (US$ Million), 2013 2023... 84 Figure 38: Artillery Ammunition Market Size in France (US$ Million), 2013 2023... 85 Figure 39: Mortar Ammunition Market Size in France (US$ Million), 2013 2023... 86 Figure 40: Military Ammunition Market in China (US$ Billion), 2013 2023... 88 Figure 41: Military Ammunition Market Split by Sector in China (%), 2013 2023... 89 Figure 42: Artillery Ammunition Market Size in China (US$ Million), 2013 2023... 90 Figure 43: Small Caliber Ammunition Market Size in China (US$ Million), 2013 2023... 91 Figure 44: Military Ammunition Market in Australia (US$ Million), 2013 2023... 93 Figure 45: Military Ammunition Market Split by Sector in Australia (%), 2013 2023... 94 Figure 46: Small Caliber Ammunition Market Size in Australia (US$ Million), 2013 2023... 96 Figure 47: Artillery Ammunition Market Size in Australia (US$ Million), 2013 2023... 97 Figure 48: Mortar Ammunition Market Size in Australia (US$ Million), 2013 2023... 98 Figure 49: Military Ammunition Market in India (US$ Million), 2013 2023... 101 Figure 50: Military Ammunition Market in India by Sector (%), 2013 2023... 101 Figure 51: Artillery Ammunition Market Size in India (US$ Million), 2013 2023... 103 Figure 52: Small Caliber Ammunition Market Size in India (US$ Billion), 2013 2023... 105 Figure 53: Medium Caliber Military Ammunition Market Size in India (US$ Million), 2013 2023... 106 Figure 54: Military Ammunitions Market in Israel (US$ Million), 2013 2023... 108 8
Figure 55: Military Ammunition Market Split by Sector in Israel (%), 2013 2023... 109 Figure 56: Small Caliber Ammunition Market Size in Israel (US$ Million), 2013 2023... 110 Figure 57: Artillery Ammunition Market Size in Israel (US$ Million), 2013 2023... 111 Figure 58: Military Ammunitions Market in Saudi Arabia (US$ Million), 2013 2023... 113 Figure 59: Military Ammunitions Market Split by Sector in Saudi Arabia (%), 2013 2023... 114 Figure 60: Small Caliber Ammunition Market Size in Saudi Arabia (US$ Million), 2013 2023... 115 Figure 61: Artillery Ammunition Market Size in Saudi Arabia (US$ Million), 2013 2023... 116 Figure 62: Ammunition Market in Brazil (US$ Million), 2013 2023... 118 Figure 63: Ammunition Market Split By Category in Brazil (%), 2013 2023... 119 Figure 64: Small Caliber Ammunition Market Size in Brazil (US$ Million), 2013 2023... 120 Figure 65: Artillery Ammunition Market Size in Brazil (US$ Million), 2013 2023... 121 Figure 66: Military Ammunition Market in Venezuela (US$ Million), 2013 2023... 123 Figure 67: Artillery Ammunition Market Size in Venezuela (US$ Million), 2013 2023... 124 Figure 68: Alliant Techsystems Inc. Revenue Trend Analysis (US$ Million), 2009 2013... 146 Figure 69: Alliant Techsystems Inc. Operating Profit (US$ Million), 2009 2013... 148 Figure 70: Alliant Techsystems Inc. Net Profit Trend Analysis (US$ Million), 2009 2013... 148 Figure 71: BAE Systems Revenue Trend Analysis (GBP Billion), 2008 2012... 152 Figure 72: BAE Systems Operating Profit (GBP Million), 2008 2012... 154 Figure 73: BAE Systems Net Profit (GBP Million), 2008 2012... 154 Figure 74: Rheinmetall Defence Revenue Trend Analysis (EUR Billion), 2008 2012... 156 Figure 75: Rheinmetall Defence Operating Profit (EUR Million), 2008 2012... 156 Figure 76: Rheinmetall Defence Net Profit Trend Analysis (EUR Million), 2008 2012... 157 Figure 77: Olin Corporation Revenue Trend Analysis (US$ Billion), 2008 2012... 164 Figure 78: Olin Corporation Operating Profit (US$ Million), 2008 2012... 165 Figure 79: Olin Corporation Net Profit Trend Analysis (US$ Million), 2008 2012... 165 9
LIST OF TABLES Table 1: Global Military Ammunition Market Overview... 19 Table 2: Global Military Ammunition Market Overview... 31 Table 3: SWOT Analysis of the Military Ammunition market... 52 Table 4: Leading Military Ammunition Markets and Top Three Segments... 60 Table 5: US Military Ammunition Market Overview... 61 Table 6: Key Military Ammunition Programs... 63 Table 7: Russian Ammunitions Market Overview... 69 Table 8: Major Russian Military Ammunition Programs... 70 Table 9: UK Ammunitions Market Overview... 74 Table 10: Major UK Ammunitions Programs... 75 Table 11: French Military Ammunitions Market Overview... 81 Table 12: Major French Military Ammunitions Programs... 82 Table 13: Chinese Military Ammunition Market Overview... 88 Table 14: Australian Military Ammunition Market Overview... 93 Table 15: Indian Military Ammunition Market Overview... 100 Table 16: Israeli Military Ammunition - Market Overview... 107 Table 17: Major Israeli military ammunitions Programs... 108 Table 18: Saudi Arabian Military Ammunition Market Overview... 112 Table 19: Brazilian Ammunition Market Overview... 117 Table 20: Key Brazilian Ammunition Programs... 118 Table 21: Venezuelan Military Ammunition Market Overview... 122 Table 23: Program Details Procurement of Small Caliber Rifle Ammunition... 129 Table 24: Program Details Procurement of Ammunition for AK-12 rifles... 130 Table 25: Program Details Procurement of multi-caliber assault rifle ammunition... 131 Table 26: Program Details Munition Acquisition Supply Solutions (Mass) Program:... 132 Table 27: Program Details Procurement of 40mm cannon and ammunition... 133 Table 28: Program Details Procurement of 40mm cannon and ammunition... 134 Table 29: Program Details Procurement of ammunition for anti-material rifles... 135 Table 30: Program Details Procurement of M1040 105mm Canister Cartridges... 136 Table 31: Program Details Ammunition for 2S31 Vena Self-propelled mortar... 137 Table 32: Program Details 120mm mortar under Metric Precision Munition (MPM) Program... 138 Table 33: Program Details 120mm mortar under Metric Precision Munition (MPM) Program... 139 Table 34: Program Details Procurement of 155mm ammunition for howitzers... 140 Table 35: Program Details Procurement of Rugged All-Terrain Boots... 141 Table 36: Program Details Ammunition for MSTA-S 2S19 152mm Self-Propelled Howitzers... 142 Table 37: Program Details Procurement of M107 Projectile Metal Parts... 143 Table 38: Alliant Techsystems Inc. Alliances... 145 Table 39: Alliant Techsystems Inc. Recent Contract Wins... 146 Table 40: General Dynamics-Ordnance and Tactical Systems Alliances... 149 Table 41: General Dynamics-Ordnance and Tactical Systems Recent Contract Wins... 150 Table 42: BAE Systems Alliances... 152 Table 43: BAE Systems Recent Contract Wins... 152 Table 44: Rheinmetall Defence Alliances... 155 Table 45: Rheinmetall Defence Recent Contract Wins... 155 Table 46:Nexter Munitions: Alliances... 158 Table 47:Nexter Munitions: Recent Contract Wins... 159 Table 48: L-3 Communications Corp.: Recent Contract Wins... 160 Table 49: Nammo AS: Alliances... 161 Table 50: Nammo AS: Recent Contract Wins... 162 Table 51: Olin Corporation Alliances... 163 Table 52: Olin Corporation Recent Contract Wins... 163 10
Executive Summary The global military ammunition market is expected to grow at a CAGR of XX% Global spending on military ammunition is expected to remain fairly constant over the forecast period, primarily due to the sustained procurement anticipated to be carried out by major defense spending countries that are currently involved in conflicts, and emerging economies involved in territorial disputes and countering insurgencies. In addition, the need to maintain a sufficient inventory of ammunition for militaries worldwide and the increasing demand for training ammunition is also anticipated to have a positive impact on the demand for military ammunition. Furthermore, modernization initiatives that are being implemented in most major defense spending countries and are focusing on the upgrade of existing firearms, and the induction of new advanced models are also expected to encourage spending on military ammunition. The impact of military modernization on the ammunition market is most likely to be witnessed prominently in emerging economies such as India, China, Brazil, and Russia, which are spending significantly on enhancing the capabilities of their ground forces by inducting state-of-the-art small arms, howitzers, and mortars. However, with Western led troops moving out of conflict zones such as Afghanistan within the next couple of years and troop reduction initiatives being undertaken by major European defense spenders, the market for military ammunition is not expected to register a growth as steep as was observed in the last decade. Given the increasing emphasis on defense budget cuts in a number of western countries, it is anticipated that governments will opt for the privatization of production facilities in order to maintain efficiency while remaining aligned with budgetary constraints. As such, the ammunition market is expected to witness a number of private-public partnerships, technology transfer, joint development initiatives, and M&As in order to sustain capabilities, and further technology advancement with limited resources. Over the forecast period, cumulative global expenditure on military ammunition is forecast to value US$XX billion. 11
US$ Billion The Global Military Ammunition Market 2013 2023 1 Global Military Ammunition Market Size and Drivers 1.1 Military Ammunition Market Size and Forecast 2013 2023 1.1.1 Global military ammunition market to show positive growth during the forecast period The global military ammunition market is estimated to value US$XX billion in 2013 and increase at a CAGR of XX% during the forecast period, to reach its peak of US$XX billion by 2023. The market consists of five categories of military ammunition: small caliber, medium caliber, large caliber, artillery, and mortar ammunition. The artillery ammunition segment is expected to account for XX% of the global military ammunition market, followed by the small caliber ammunition segment, with a share of XX%. While mortar ammunition and large caliber ammunition account for XX% and XX% of shares respectively, the remaining XX% is constituted by medium caliber ammunition. During the forecast period, cumulative global expenditure on military ammunition is expected to reach US$XX billion. The chart below shows the expected military ammunition market value during 2013 2023: Figure 1: Global Military Ammunition Market (US$ Billion), 2013 2023 XX XX XX XX XX XX XX 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: SDI analysis SDI 12
1.2 Global Military Ammunition Market Regional Analysis 1.2.1 North America to register highest spending in the global military ammunition market The US which is the world s largest military spender and has the largest army size, spends significantly on the procurement of ammunition due to its widespread operations inside the US and in other countries. The country s army is deployed in various foreign locations for peacekeeping operations as a part of NATO forces. The US Army s involvement in the operations such as Iraq and Afghanistan had bolstered the expenditure on ammunition during the last decade. Therefore, following the US troops withdrawal from Afghanistan, which is expected to be carried out in 2014, the spending on ammunition is expected to witness a decline thereafter. However, the market is expected to grow gradually in the succeeding years keeping in view the continuous modernization initiatives and technological advancements in the country. The US DoD had awarded a major long-term contract worth US$XX billion to supply small caliber ammunition for the next ten years and to modernize and operate its Lake city Army Ammunition Plant. Additionally, the country s military arms and ammunition development and manufacturing entity Picatinny Arsenal is also involved in continuous R&D programs in order to provide the military with new and advanced weapons and ammunition. Due to all of these factors, North America will be the leading spender in the military ammunition sector and is expected to account for XX% of the global market over the forecast period. Asia Pacific is expected to be the second largest market for military ammunition followed by Europe with shares of XX% and XX% respectively. Spending in the Asia Pacific region is driven by major procurement programs formulated by large defense spenders such as India, China, Australia, and South Korea. These countries are anticipated to focus on the indigenous development of firearms is anticipated to be a major factor driving the expenditure on military ammunition over the forecast period. European spending on military ammunition is expected to witness relatively low investment and growth over the forecast period. The region has recently had to undergo a financial crisis which has prompted major defense spenders in the region to reduce military spending. However, participation in peacekeeping operations, prevention of terrorism, efforts to secure trade routes and soldier modernization programs, which include small arms and ammunition procurement, are expected to drive the market over the forecast period. The Middle East, Africa, and Latin America account for XX%, XX%, and XX% of global military ammunition expenditure respectively. 13
The table below gives a brief overview of the global military ammunition market: Table 1: Global Military Ammunition Market Overview Region Market in 2013 Market in 2023 Total Market (2013 2023) Annualized growth/decline (2013 2023) North America US$XX billion US$XX billion US$XX billion XX% Asia-Pacific US$XX billion US$XX billion US$XX billion XX% Europe US$XX billion US$XX billion US$XX billion XX% Middle East US$XX billion US$XX billion US$XX billion XX% Latin America US$XX billion US$XX billion US$XX billion XX% Africa US$XX million US$XX million US$XX billion XX% Total Ammunition Market US$XX billion US$XX billion US$XX billion XX% Source: SDI analysis SDI 14
1.3 Military Ammunition Sub-Sector Market Size Composition 1.3.1 Artillery ammunition expected to constitute the largest segment Artillery systems are one of the most critical elements of ground battles, especially in cross border conflicts or while fighting the hostile forces from a distance. These weapons provide the forces with firepower to inflict significant damage to the enemy weapons, troops and infrastructure. Main Battle Tanks (MBTs) are also considered as a major force projector for any military involved in a full-fledged ground battle due to its ability to launch artillery projectiles. Therefore, the militaries of almost all major military spending nations maintain an arsenal consisting of numerous self propelled and towed howitzers and MBTs. The armies are involved in regular training exercises with these weapon systems in order to be battle ready. Therefore, along with these weapon systems, militaries also stocks significant amounts of tank ammunition, artillery ammunition, and training ammunition, depending on the number of launch platforms they possess. The various types of artillery ammunition being used by the militaries across the world include 75mm, 105mm, 115mm, 120mm, and 155mm, which are used in a range of weapon systems. 105mm cartridge shells are the most extensively used ammunition with the howitzers currently in service with various militaries. However, due to the technological advancements in artillery ammunition technology, the 155mm ammunition is rapidly gaining importance with various countries armies. Additionally, the countries are also procuring self propelled precision munitions such as Excalibur, due to the increased effectiveness of the projectiles and their high hit rates. Numerous countries, including the US, India, UK, Russia, France, Brazil, and Venezuela, are investing significantly in order to procure huge numbers of new and upgraded advanced howitzers and MBTs under multi-year procurement deals. The robust procurement of these weapon systems is expected to warrant the sustainability and growth of the artillery ammunition segment during the forecast period. The overall market for artillery ammunition is anticipated to be US$XX billion in 2013, and is expected to increase during the forecast period to reach US$XX billion by 2023, at a CAGR of XX%. The cumulative market for artillery ammunition is valued at US$XX billion for the forecast period. 15
The table below gives a brief overview of the global military ammunition market: Table 2: Global Military Ammunition Market Overview Category Market in 2013 Market in 2023 Total Market (2013 2023) Annualized growth/decline (2013 2023) Artillery Ammunition US$XX billion US$XX billion US$XX billion XX% Small Caliber Ammunition US$XX billion US$XX billion US$XX billion XX% Mortar Ammunition US$XX billion US$XX billion US$XX billion XX% Large Caliber Ammunition US$XX billion US$XX billion US$XX billion XX% Medium Caliber Ammunition US$XX billion US$XX billion US$XX billion XX% Total Military Ammunition Market US$XX billion US$XX billion US$XX billion XX% Source: SDI analysis SDI 16