Market condition and observed trends
Swedish analysts say that for the third year in a row there was a slight decrease in total sales. At the same time, the market contraction rate has noticeably decreased. If in 2012, the decrease was 3,9% compared to 2011, in 2013, this figure decreased to 2%. A total of 100, the largest manufacturers of weapons and equipment last year, sold products to 402 billion US dollars. Unfortunately, SIPRI experts in their studies do not take into account the indicators of the defense industry of China, since this country does not share the relevant information.
An interesting picture is observed when considering changes in sales of companies from different regions. Thus, sales of American and Canadian military products are gradually declining. Russian organizations show stable growth. Western Europe shows 20-percent growth due to the success of France and the UK, while sales of other countries either remain at the same level or fall. It is noteworthy that in the 2013 year, the tendency that has been constantly observed since the 2005 year has found its continuation. The total market share of enterprises operating outside of Western Europe and North America is constantly growing. Last year, it reached 15,5%.
In the official press release SIPRI focuses on the success of Russian companies. Indeed, some domestic organizations have shown a large increase in sales. So, in 2013, the Tactical Missiles Corporation increased sales by 118% compared to 2012. The second place in terms of the growth rate of the Almaz-Antey Air Defense Concern, whose sales increased by 34% over the year. Three leaders closes the United Aircraft Corporation with 20% growth.
The reason for this increase in production and sales of Swedish analysts believe the increase in defense spending, conducted by the leadership of Russia over the past few years. These costs lead to the modernization of enterprises and the emergence of new products that can compete with foreign models.
Since 2011, US military sales have been steadily declining. The reasons for this lie in the new legislation, which implies a reduction in the military budget, as well as in the implementation of the withdrawal of troops from Iraq and the planned withdrawal from Afghanistan. Because of this, the total sales of American companies in the "Top-100" global manufacturers weapons, in 2013, it fell by 4,5%. In addition, current processes have led to a curious change in the list of world leaders. So, in 2012, 42 was present in the ranking by American companies, and in 2013, only 38 was present.
Analyzing the state of the armament and equipment market last year, SIPRI experts came to the conclusion that it was necessary to create a new category of countries - Global South. Last year, a number of companies from the countries of the Southern Hemisphere and some other regions: Brazil, India, Singapore, etc., ranked among the largest manufacturers. In this regard, Swedish analysts are introducing a new category and hope that such an innovation will allow better follow the development of new players in the market.
So far, Global South companies provide only 3,6% of all sales of Top 100 organizations in total, but some of them already show quite remarkable growth. For example, the South Korean company Aerospace Industries for the year increased sales by 31%. Other companies from Global South are confidently continuing their way up the rating. Among other things, this trend to some extent demonstrates the existing decline in the shares of North America and Western Europe.
An interesting fact is that with the existing sales cuts and the entire market, the top ten rankings in 2013 almost did not change compared to 2012. Owners of the first ten places have such a large gap between each other and from other companies that the observed reduction in sales has almost no effect on the final table.
Top Ten Suppliers
The first place in the 2013 rating of the year is taken by the American company Lockheed Martin, which for a year sold products worth 35,49 billion dollars. This is about 500 million less than in the 2012 year, but the company retains leadership, having a significant advantage over the closest "pursuers". Total sales, both military and civilian products amounted to 45,5 billion. Military products provided 78% of all revenues.
On the second line, as in the previous year, is the American company Boeing. During the year, she supplied weapons and equipment to 30,7 billion dollars, improving the previous result by 100 million. It is curious that Boeing’s total revenue amounted to 86,62 billion dollars last year, of which only 35% comes from defense production.
The third place is again occupied by the British concern BAE Systems with an income of 26,82 billion dollars. Compared to 2012 year, the group's revenue grew by 5 billion. Weapon systems and military equipment make up 94% of the sales of the group, which in total earned about 28,4 billion dollars.
Fourth place left behind the American company Raytheon, earned on military supplies 21,95 billion. Sales of this company are falling; in 2012, they amounted to 22,5 billion dollars. Raytheon's defense production provided 93% of the income from 23,7 billions earned in a year.
On the fifth place, having risen to one line, in 2013, the American company Northrop Grumman with military sales volume of 20,2 billion dollars hit. Over the year, such revenue grew by 800 million. The total revenue of Northrop-Grumman last year amounted to 24,66 billion, of which 82% is for weapons and military equipment.
Americans from General Dynamics dropped to sixth place, earning only 2013 a billion dollars in 18,66 a year against 20,94 billion received a year earlier. At the same time, military products provide the company 60% of revenue, the total income for the last year - 31,22 billion dollars.
In seventh place again the European concern EADS. In 2013, its military sales rose to 15,74 billion dollars, which is 340 million more than 2012's sales. The total earnings of the EADS concern reached 78,7 billion last year, with only 20% of revenue accounted for military products.
The eighth place is occupied by the American company United Technologies (UTC), which has risen by one line over the year. Its income from sales of weapons and equipment amounted to 11,9 billion dollars. It is noteworthy that the income of UTC declined by 220 million in comparison with 2012 year, but the company still managed to rise by one place in the ranking. Defense orders account for 19% of UTC sales. Total revenue over the past year - 62,62 billion dollars.
The Italian company Finmeccanica, which was previously in eighth position, fell to ninth place. Last year, she earned 10,56 billion on military orders. For comparison, the income for 2012 year reached 12,53 billion dollars. Military contracts gave the company about half of total revenue in 21,29 billion.
The ten largest manufacturers of weapons and equipment of the last year are closed by the French company Thales, which has risen by one line. In 2012, she earned billions of dollars in 8,88 military products, and in 2013 she increased this figure to 10,37 billion. This is 55% of the company's total revenue of 18,85 billion.
According to estimates by SIPRI specialists, the most successful Russian arms dealer in 2013 was the Almaz-Antey Air Defense Concern. Over the year, this organization increased its revenues from military production by 34%, from 5,81 to 8,03 billion dollars. This allowed the concern to rise from the 14 location (2012 year) to 12. In total, last year Almaz-Antey earned 8,54 billion. 94% of revenue comes from military products.
On 15, the United Aircraft Building Corporation climbed up from 18, which sold military aircraft and helicopters worth 5,53 billion dollars in a year. A year earlier, this figure was 4,44 billion. Military orders accounted for 80% of the revenues of the Corporation, which earned a total of 6,93 billion.
17 line, rising from 19, was taken by the Russian United Shipbuilding Corporation with an annual revenue of 5,12 billion dollars. In 2012, the Corporation fulfilled military orders with a total value of 4,15 billion. As in the case of KLA, the share of military orders amounted to 80% of the total revenues of USC in the amount of 6,37 billion dollars.
25 was won by the Russian Helicopters corporation, which rose one line up. Last year, the organization earned 3,5 billion dollars, which is 20 million less than in 2012. On military orders, the corporation earned 80% of all revenues. A total of "Russian Helicopters" in 2013-m earned 4,34 billion.
Immediately by six positions, to the 36 seat, the United Engine Corporation has risen with an income of 2,72 billion dollars. Compared to 2012, the year growth was 260 million. The total revenue of the Corporation last year amounted to 4,99 billion, and military orders provided only 55% of this amount.
It should be noted that some organizations are present in the pivot table, but do not have their place. The compilers of “Top-100” from SIPRI use this approach in relation to companies that have their own production, but are structural divisions of other organizations. So, the company "Sukhoi" with an income of 2,18 billion dollars could take place 48. In 2012, the income of this organization was more on 130 millions. Military aircraft provide 78% revenue. Total revenue - 2,81 billion dollars.
On the 53 line of the list is the Concern "Radio-Electronic Technologies" (KRET), which earned 2013 billion dollars in military orders in 1,85 year. In 2012, this figure was 1,38 billion, with which KRET took the place of 60. The group's total revenue for the year is 2,47 billion, the share of defense orders is 76%.
Irkut Corporation, which could take 61-place due to revenues of 1,32 billion, is out of the rating. Over the year, the volume of military orders increased by 230 million. Most of the corporate revenue, 73%, comes from the construction of combat aircraft. In total, in 2013, Irkut earned 1,81 billion.
Also out of the rating (at the level of 67 place) is the engine-building company UMPO, which is part of the United Aircraft Building Corporation, with an income of 1,1 billion dollars. A year earlier, the company sold products on 760 million. 93% revenue last year secured with military orders. Total revenue in the 2013 year is 1,18 billion.
72-place could remain behind the shipyard "Sevmash" related to USC. Last year, the plant earned 1,03 billion dollars, which is 140 million less than income in 2012. Ministry of Defense orders give Sevmash three-quarters of total revenue in 1,37 billion.
From 96 to 78, the place has risen to the Radiotechnical Institute. Academician A.L. Mintsa (RTI), which earned 850 million dollars last year, which is 150 million more than 2012. Last year’s total RTI income was 1005 million, 95% of that money came from military orders.
On the 24 position, to the 86 location, Uralvagonzavod Corporation dropped. According to SIPRI experts (there are no exact data on “UVZ”), the corporation income in 2013 amounted to 870 millions. In 2012, the company earned 1,22 billion. Last year's total income of Uralvagonzavod amounted to 2,9 billion dollars. Military products provide only 30% of this money.
The constellation concern has entered Top-100, having risen from 109 to 89. Exact data on the work of this enterprise is not available, but according to estimates by Swedish experts, income in 2013 reached 860 million dollars and exceeded income of 210 by 2012 million. Three-quarters of sales of the "Constellation" accounted for military products. Total revenue for the year - 1,14 billion.
As you can see, the first places in the rating of the largest manufacturers of weapons and military equipment remain almost unchanged, and the main movements along the lines occur in the middle and lower parts of the list. Russian defense companies, with some exceptions, are showing steady growth, but so far they have not risen above 12. However, in the light of the changing situation in the North American and Western European defense industry, Russian manufacturers are quite capable of seriously moving up the list over the next few years. In addition, some domestic enterprises were able to rise from the second hundred manufacturers to the first, pushing down foreign competitors. As a result, as SIPRI analysts note, the general indicators of the companies from Top 100 have been falling for the first year, and the income of Russian defense enterprises, on the contrary, is growing.
What was the international market for weapons and military equipment, we will find out next year. Already in spring, the Stockholm World Research Institute is due to publish the first reports describing the market situation in 2014 ending the year.