2014 is already drawing to a close, but only now specialists from the Stockholm Peace Research Institute (SIPRI) have completed an analysis of data on the state of the international arms and military equipment market in 2013, which resulted in a rating of the 100 largest manufacturers of weapons and military equipment. Last year there were no events that could have a big impact on the state of the market. The main trends remain, and the list of the 100 largest manufacturers for 2013 does not differ dramatically from the rating for 2012.
Market conditions and observed trends
Swedish analysts note that for the third year in a row, there has been a slight decline in total sales. At the same time, the rate of market decline has noticeably decreased. If in 2012 the decrease was 3.9% compared to 2011, then in 2013 this figure decreased to 2%. In total, the 100 largest manufacturers of weapons and equipment sold products worth $ 402 billion last year. Unfortunately, SIPRI experts do not take into account the indicators of China's defense industry in their studies, since this country does not share relevant information.
An interesting picture is observed when considering the changes in sales of companies from different regions. Thus, sales of American and Canadian military products are gradually decreasing. Russian organizations are showing stable growth. Western Europe is showing 20% growth due to the success of France and the UK, while sales in other countries are either flat or falling. It is noteworthy that in 2013 the trend that has been observed constantly since 2005 found its continuation. The overall market share of businesses operating outside Western Europe and North America is growing steadily. Last year it reached 15.5%.
In the official press release of SIPRI, special attention is paid to the success of Russian companies. Indeed, some domestic organizations have shown strong sales growth. So, in 2013, the Tactical Missiles Corporation increased sales by 118% compared to 2012. In second place in terms of growth rates is the Almaz-Antey Air Defense Concern, whose sales increased by 34% over the year. The United Aircraft Corporation closes the top three with 20% growth.
According to Swedish analysts, the reason for this growth in production and sales is the increase in defense spending carried out by the Russian leadership over the past several years. These expenses lead to the modernization of enterprises and the emergence of new products that can compete with foreign samples.
Since 2011, the volume of military sales of American companies has 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 US companies in the "Top 100" global arms manufacturers in 2013 decreased by 4.5%. In addition, the current processes have led to an interesting change in the list of world leaders. So, in 2012, 42 American companies were present in the ranking, and in 2013 - only 38.
Analyzing the state of the arms and equipment market last year, SIPRI experts came to the conclusion that it was necessary to create a new category of countries - Global South. A number of companies from the countries of the Southern Hemisphere and some other regions: Brazil, India, Singapore, etc. were included in the rating of the largest manufacturers last year. In this regard, Swedish analysts are introducing a new category and hope that such an innovation will allow better monitoring of the development of new players in the market.
So far, the companies of the Global South account for only 3.6% of the total sales of the Top 100 organizations, but some of them are already showing quite remarkable growth. For example, the South Korean company Aerospace Industries increased sales by 31% over the year. Other companies from Global South are confidently continuing their way up the rating. Among other things, this trend demonstrates to some extent the existing decline in the shares of North America and Western Europe.
An interesting fact is that with the existing reductions in sales and the entire market, the top ten of the rating in 2013 did not undergo almost any changes compared to 2012. The owners of the first ten places have such a large gap from each other and from other companies that the observed sales reductions have almost no effect on the final table.
Top ten suppliers
The first place in the 2013 ranking is occupied by the American company Lockheed Martin, which sold products worth $ 35.49 billion in a year. This is about 500 million less than in 2012, but the company retains its leadership, having a serious advantage over its closest “pursuers”. The total sales of both military and civilian products amounted to 45.5 billion. Military products accounted for 78% of all revenues.
The second line, as in the previous year, is occupied by the American company Boeing. Over the year, it supplied weapons and equipment worth $ 30.7 billion, improving the previous result by $ 100 million. It is curious that Boeing's total revenue last year amounted to $ 86.62 billion, of which only 35% came from defense production.
The third place is again occupied by the British concern BAE Systems with revenue of $ 26.82 billion. Compared to 2012, the group's revenue increased by 5 billion. Weapon systems and military equipment account for 94% of the group's sales, which have earned a total of about $ 28.4 billion.
The fourth place was again left for the American company Raytheon, which earned 21.95 billion on military supplies. Sales of this company are falling, in 2012 they amounted to $ 22.5 billion. Raytheon's defense industry accounted for 93% of its $ 23.7 billion in revenue for the year.
The American company Northrop Grumman with military sales of $ 20.2 billion came to fifth place, moving up one line, in 2013. Over the year, this income has grown by 800 million. Northrop-Grumman's total revenue last year was $ 24.66 billion, of which 82% came from weapons and military equipment.
The Americans from General Dynamics dropped to sixth place, earning only $ 18.66 billion in 2013 against $ 20.94 billion received a year earlier. At the same time, military products provide the company with 60% of the company's income, the total revenue for the last year was $ 31.22 billion.
In seventh place is again the European concern EADS. In 2013, its military sales rose to $ 15.74 billion, up $ 340 million from 2012 sales. The total earnings of the EADS concern last year reached 78.7 billion, with military products accounting for only 20% of the revenue.
The eighth place is occupied by the American company United Technologies (UTC), which has risen one line over the year. Its income from the sale of weapons and equipment amounted to $ 11.9 billion. It is noteworthy that UTC's revenue fell by 220 million compared to 2012, but the company was still able to move up one place in the ranking. Defense orders account for 19% of UTC sales. Total revenue for the last year - 62.62 billion dollars.
The Italian company Finmeccanica, which was previously in the eighth position, has dropped to ninth place. Last year, she earned 10.56 billion on military orders. For comparison, revenue for 2012 reached $ 12.53 billion. Military contracts gave the company roughly half of its $ 21.29 billion in revenue.
The French company Thales closes the top ten of the largest manufacturers of weapons and equipment last year, moving up one line. In 2012, she earned $ 8.88 billion on military products, and in 2013 increased this figure to $ 10.37 billion. This is 55% of the company's total revenue of 18.85 billion.
Russian companies
According to SIPRI experts, 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 $ 8.3 billion. This allowed the concern to rise from 14th place (2012) to 12th. In total, last year Almaz-Antey earned 8.54 billion. 94% of revenue comes from military products.
The United Aircraft Corporation moved up to 15th place from 18th, selling military aircraft and helicopters worth $ 5.53 billion in a year. A year earlier, this figure was 4.44 billion. Military orders accounted for 80% of the Corporation's revenues, which earned a total of 6, 93 billion.
The 17th line, having risen from the 19th, was taken by the Russian United Shipbuilding Corporation with an annual income of $ 5.12 billion. In 2012, the Corporation completed military orders totaling $ 4.15 billion. As in the case of the UAC, the share of military orders amounted to 80% of the total income of the USC in the amount of $ 6.37 billion.
The 25th place went to the Russian Helicopters Corporation, which moved up one line. Last year, this organization earned $ 3.5 billion, which is 20 million less than in 2012. On military orders, the corporation earned 80% of all income. In total, Russian Helicopters earned 4.34 billion in 2013.
The United Engine Corporation with an income of $ 2.72 billion moved up six positions at once, to 36th place. Compared to 2012, the 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 the SIPRI Top 100 use this approach for companies that have their own production, but are structural divisions of other organizations. So, the company "Sukhoi" with an income of $ 2.18 billion could take 48th place. In 2012, the income of this organization was 130 million more. Military aircraft provide 78% of the income. Total revenue - $ 2.81 billion.
On the 53rd line of the list is the Concern "Radioelectronic Technologies" (KRET), which earned $ 1.85 billion on military orders in 2013. In 2012, this figure was 1.38 billion, with which KRET took 60th place. The total income of the concern for the year is 2.47 billion, the share of defense orders is 76%.
Irkut corporation is out of the rating, which could take the 61st place thanks to revenues of 1.32 billion. Over the year, the volume of military orders increased by 230 million. Most of the corporation's income, 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 67th place) is the UMPO engine building company, which is part of the United Aircraft Corporation, with an income of $ 1.1 billion. A year earlier, the company sold 760 million worth of products. 93% of revenue last year came from military orders. Total revenue in 2013 - 1.18 billion.
The 72nd place could have remained with the Sevmash shipyard, which belongs to the USC. Last year, this plant earned $ 1.03 billion, which is 140 million less than in 2012. Orders of the Ministry of Defense give Sevmash three quarters of the total revenue of 1.37 billion.
From 96 to 78 place went up the Radio Engineering Institute. Academician A. L. Mints (RTI), which earned $ 850 million last year, which is 150 million more than in 2012. The total income of RTI last year is 1005 million, 95% of this money falls on orders from the military.
The corporation Uralvagonzavod dropped to 24th position, to 86th position. According to SIPRI experts (there are no exact data on UVZ), the corporation's income in 2013 amounted to 870 million. In 2012, the company earned 1.22 billion. The total revenue of Uralvagonzavod last year amounted to $ 2.9 billion. Military products provide only 30% of this money.
The Sozvezdie concern entered the Top-100, moving up from 109th to 89th place. There is no exact data on the work of this enterprise, but, according to estimates of Swedish specialists, the income in 2013 reached 860 million dollars and was 210 million more than the income of 2012. Three quarters of Sozvezdiya's sales are for military products. The total revenue for the year is 1.14 billion.
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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 bottom parts of the list. Russian defense companies, with a few exceptions, are showing steady growth, but so far they have not climbed above 12th place. Nevertheless, in light of the changing situation in the North American and Western European defense industry, Russian manufacturers are quite capable of moving up the list in the next few years. In addition, some domestic enterprises were able to move up from the second hundred manufacturers to the first, pushing down foreign competitors. As a result, as noted by SIPRI analysts, the overall performance of the Top 100 companies has been falling for several years already, while the revenues of Russian defense enterprises, on the contrary, are growing.
We will find out what the international market for arms and military equipment was like next year. In the spring, the Stockholm Peace Research Institute is to publish the first reports describing the market situation in the end of 2014.
