The Vietnamese Defense Industry Market Opportunities and Entry Strategies, Analyses and Forecasts to 2016

Lon­don, May 22nd, 2012 – Viet­namese defense expen­di­ture reg­is­tered a CAGR of 12.25% dur­ing the review peri­od and is esti­mat­ed at US$ 3 bil­lion in 2012. It is expect­ed to grow at a CAGR of 12.52% dur­ing the fore­cast peri­od to reach an esti­mat­ed US$5 bil­lion in 2016. Defense expen­di­ture as a per­cent­age of GDP is expect­ed to decrease from 2.2% in 2011 to 1.8% in 2016. Over­all, the coun­try is expect­ed to spend an esti­mat­ed US$18 bil­lion on its armed forces dur­ing the fore­cast peri­od, of which approx­i­mate­ly US$6 bil­lion will be allo­cat­ed for cap­i­tal expen­di­ture (ref­er­ence see graph below).

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In March 2011, the Viet­namese gov­ern­ment passed leg­is­la­tion that pro­hibits sell­ing stakes of state-owned defense com­pa­nies to the pri­vate sec­tor. The leg­is­la­tion fur­ther stip­u­lates that the state will hold 100% of the char­ter cap­i­tal in enter­pris­es involv­ing nation­al defense and secu­ri­ty, and mil­i­tary held com­mer­cial enter­pris­es. This leg­is­la­tion pre­vents pri­vate par­tic­i­pa­tion and thwarts any for­eign direct invest­ment into the country’s defense sec­tor.

Viet­nam released its third defense whitepa­per in 2009 which revealed the country’s defense expen­di­ture for the first time dur­ing 2004–2008. This was seen by many as a step towards build­ing con­fi­dence with both its neigh­bours and coun­tries in the west, which is in line with its for­eign pol­i­cy of build­ing cor­dial rela­tions with oth­er coun­tries.

Vietnam’s mil­i­tary indus­tri­al base is still in a nascent stage of devel­op­ment. The country’s defense com­pa­nies are pre­dom­i­nant­ly gov­ern­ment-owned and are oper­at­ed by the mil­i­tary, which has pre­vent­ed for­eign invest­ment into the defense sec­tor and lim­it­ed tech­no­log­i­cal inno­va­tion. As a result, the country’s domes­tic com­pa­nies are unable to devel­op and man­u­fac­ture tech­no­log­i­cal­ly advanced defense sys­tems.

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ICD Research is a full-ser­vice glob­al mar­ket research agency and pre­mi­um busi­ness infor­ma­tion brand spe­cial­iz­ing in indus­try analy­sis in a wide set of B2B and B2C mar­kets. ICD Research has access to over 400 in-house ana­lysts and jour­nal­ists and a glob­al media pres­ence in over 30 pro­fes­sion­al mar­kets enabling us to con­duct unique and insight­ful research via our trust­ed busi­ness com­mu­ni­ties. Through its unique B2B and B2C research pan­els and access to key indus­try bod­ies, ICD Research deliv­ers insight­ful and action­able analy­sis. The ICD Research sur­vey capa­bil­i­ties grant read­ers access to the opin­ions and strate­gies of key busi­ness deci­sion mak­ers, indus­try experts and com­peti­tors as well as exam­in­ing their actions sur­round­ing busi­ness pri­or­i­ties.

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This report is one of a series avail­able to sub­scribers of our pre­mi­um research plat­form, Strate­gic Defence Intel­li­gence. Strate­gic Defence Intel­li­gence pro­vides a stream of con­tin­u­ous­ly updat­ed cus­tomer and com­peti­tor intel­li­gence, as well as detailed research reports pro­vid­ing an unri­valled source of glob­al infor­ma­tion on the lat­est devel­op­ments in the defence indus­try.

Strate­gic Defence Intelligence’s unique mon­i­tor­ing plat­form tracks glob­al defence activ­i­ty for over 2,500 com­pa­nies and 65 prod­uct cat­e­gories in real time and in a high­ly struc­tured man­ner, giv­ing a com­pre­hen­sive and eas­i­ly-search­able pic­ture of all defence indus­try activ­i­ty. The site fea­tures: dai­ly updat­ed analy­sis, com­ment and news, com­pa­ny and cus­tomer pro­files, defence spend­ing, ten­ders and con­tracts, prod­uct and tech­nol­o­gy intel­li­gence, a research and analy­sis data­base pro­vid­ing access to indus­try and com­peti­tor reports to enable busi­ness and mar­ket plan­ning, and ful­ly cus­tomiz­able tools, includ­ing instant per­son­al­ized report gen­er­a­tion and cus­tom alerts.

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