This report is the result of SDI's extensive market and company research covering the Vietnamese defense industry, and provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news. Introduction and Landscape To Know More About This Report Visit: http://www.researchmoz.us/future-of-the-vietnamese-defense-industry-market-attractiveness-competitive-landscape-and-forecasts-to-2018-report.html Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain market share in the Vietnam defense industry. What is the current market landscape and what is changing? With booming economy and maritime trade, Vietnam finds itself in the middle of an Asian arms race. A looming Chinese threat and the need to replace obsolete military equipment are expected to drive the country's defense expenditure over the forecast period. Vietnam's defense budget is valued at US$3.1 billion in 2013, and is expected to grow at a faster pace over the forecast period than during the review period. Vietnam's military expenditure is expected to grow at a CAGR of 7.84% over the forecast period to reach US$4.6 billion by 2018, compared to the registered growth rate of 6.26% during the review period.

1. Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to
2018
Product Synopsis
This report is the result of SDI's extensive market and company research covering the Vietnamese defense
industry, and provides detailed analysis of both historic and forecast defense industry values including key
growth stimulators, analysis of the leading companies in the industry, and key news.
Introduction and Landscape
Why was the report written?
Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to
2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original
equipment manufacturers (OEMs) to gain market share in the Vietnam defense industry.
What is the current market landscape and what is changing?
With booming economy and maritime trade, Vietnam finds itself in the middle of an Asian arms race. A
looming Chinese threat and the need to replace obsolete military equipment are expected to drive the country's
defense expenditure over the forecast period. Vietnam's defense budget is valued at US$3.1 billion in 2013,
and is expected to grow at a faster pace over the forecast period than during the review period. Vietnam's
military expenditure is expected to grow at a CAGR of 7.84% over the forecast period to reach US$4.6 billion
by 2018, compared to the registered growth rate of 6.26% during the review period. The Vietnamese
government is estimated to increase its allocation for capital expenditure over the forecast period to an average
of 32.5% of total defense expenditure. The country is expected to procure military equipment to boost its
naval strength and maritime security in order to counter the threat from the growing Chinese naval strength in
the South China Sea. In addition, Vietnam is also expected to procure military equipment such as aircraft,
missiles and armored vehicles as part of its modernization program. Foreign companies may gain from the
Vietnamese government's efforts to open its defense market and look beyond its traditional arms supplier,
Russia.
What are the key drivers behind recent market changes?
Strained relationship with China and military modernization are expected to drive military spending Vietnam
is expected to spend US$6.4 billion on the acquisition of weapons and defense systems during the forecast
period. Factors such as disputed territorial claims in the South China Sea, Chinese naval build-up, and the
acquisition of modern military hardware to replace outdated and aging equipment are anticipated to drive the
country's military expenditure.
What makes this report unique and essential to read?
The Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and
Forecasts to 2018 provides detailed analysis of the current industry size and growth expectations from 2014 to
2018, including highlights of key growth stimulators. It also benchmarks the industry against key global
markets and provides a detailed understanding of emerging opportunities in specific areas.
Key Features and Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2014 to
2018, including highlights of key growth stimulators, and also benchmarks the industry against key global
Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

2. markets and provides a detailed understanding of emerging opportunities in specific areas. The report includes
trend analysis of imports and exports, together with their implications and impact on the Vietnamese defense
industry. The report covers five forces analysis to identify various power centers in the industry and how these
are expected to develop in the future. The report allows readers to identify possible ways to enter the market,
together with detailed descriptions of how existing companies have entered the market, including key
contracts, alliances, and strategic initiatives. The report helps the reader to understand the competitive
landscape of the defense industry in Vietnam. It provides an overview of key defense companies, both
domestic and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial
analysis.
Key Market Issues
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 which involve national defense, as well as 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 neighbors and countries in the west, which is in line with its foreign policy of
building cordial relations with other countries. However, the whitepaper does not give any specifics about the
budget break-down or the amount spent on procurement. This lack of transparency within the government
budget allocation and procurement process may discourage investors from entering the country's defense
market.
Key Highlights
Strained relations with China: Supported by the strong economic growth, territorial disputes in the South
China Sea have been fuelling the boost of military expenditures of countries in ASEAN region. Vietnam
shares a border with China and is a party to disputes over islands in the South China Sea, which China and
other countries such as Taiwan, Philippines, and Japan claim ownership of. Sino-Vietnamese relations are
historically marred by invasions and conflicts and recently by claims over islands, minerals, and maritime
passages in the South China Sea. China increased their patrol of these disputed waters and seized fishing and
merchant vessels instigating public demonstrations in Vietnam, which in turn put pressure on the Vietnamese
government to lodge its protest with the Chinese government. The surge in strength of the Chinese Navy and
the exhibition of its aircraft carrier are also expected to drive the Vietnamese government to increase its
military expenditure and allocate more funds to military modernization programs. The country's naval
modernization program was kick started with the procurement of six kilo class diesel submarines from Russia.
Vietnam is expected on procure frigates, patrol vessels, and other equipment to strengthen its naval forces.
Human Trafficking: Vietnam has seen a recent upsurge in human trafficking both into and out of the country.
An increase in the sex trade, including child sex and forced labor, has fuelled the trafficking of Vietnamese
adults and children to countries such as Cambodia, China, Thailand, Hong Kong, Macau, Malaysia, Taiwan,
South Korea, the UK, and the Czech Republic. The country has also seen an illegal inflow of children from
neighboring countries for forced labor and sexual exploitation. The Vietnamese government adopted National
Action Plan 2011-2015, which aims to protect people from falling prey to trafficking and deals with events in
Vietnam and across the Vietnamese border in cooperation with other countries and international organizations.
Vietnam has created awareness-raising projects and provides training to women and girls in trafficking-prone
Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

3. areas. The country has also passed laws which criminalize human trafficking and has strengthened the judicial
system to prosecute those convicted. Vietnam has one of the highest conviction rates for traffickers in the
world, as authorities arrested 719 traffickers, prosecuted 453, and convicted 400 traffickers in 2012. Vietnam's
arms imports began to rise in 2010, mainly due to the need to counter China's increasing naval capabilities,
and the country imported arms equipment worth US$152 million in 2011. Although imports have seen a
significant decrease in 2012, the country imported at higher levels than in the period 2008-2010. Over the
forecast period, arms imports are projected to remain at 2012 levels as the country focuses on replacing
outdated defense systems and strengthening its Navy and Air Force. Moreover, Vietnam's domestic defense
industrial base is underdeveloped and is unable to meet the requirements of its armed forces, which is
expected to lead to a significant increase in the overall arms supplies to the country by foreign OEMs during
the forecast period.
table Of Content
1 Introduction
1.1. What Is This Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. Sdi Terrorism Index
1.5. About Strategic Defence Intelligence
2 Executive Summary
3 Market Attractiveness And Emerging Opportunities
3.1. Defense Market Size Historical And Forecast
3.1.1. Defense Expenditure Is Projected To Grow At A Cagr Of 7.84% During The Forecast Period
3.1.2. Strained Relationship With China And Military Modernization Are Expected To Drive Military
Expenditure
3.1.3. Defense Expenditure As A Percentage Of Gdp Is Expected To Hover Around 2% Over The Forecast
Period
3.2. Analysis Of Defense Budget Allocation
3.2.1. Share Of Capital Expenditure In The Overall Defense Budget Is Expected To Increase
3.2.2. Vietnam's Capital Expenditure Is Expected To Grow At A Cagr Of 8.60% Over The Forecast Period
3.2.3. Vietnam's Revenue Expenses Are Expected Grow At A Slower Pace Compared To Capital Expenditure
3.2.4. Per Capita Defense Expenditure Is Expected To Increase
3.3. Homeland Security Market Size And Forecast
3.3.1. Homeland Security Expenditure Is Expected To Grow At A Cagr Of 6.88% During The Forecast Period
3.3.2. Human Trafficking, Illicit Drugs Trade, And Maritime Security To Drive Homeland Security
Expenditure
3.3.3. Vietnam Faces A Minimal Threat From Foreign Terrorist Organizations
Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

4. 3.4. Benchmarking With Key Global Markets
3.4.1. Vietnamese Defense Expenditure Expected To Remain Modest Compared To Leading Spenders
3.4.2. The Country Will Continue To Be A Significant Player In The Global Arms Market
3.4.3. Vietnam's Defense Expenditure As A Percentage Of Gdp Is Higher Than Some Leading Defense
Spenders
3.4.4. Vietnam Faces Negligible Threat From Foreign Terrorist Organizations
3.5. Market Opportunities: Key Trends And Growth Stimulators
3.5.1. Diesel Electric Submarines
3.5.2. Corvettes
3.5.3. Space Based Radars
3.5.4. Fighters And Multi-role Aircraft
3.5.5. Maritime Security
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Limited Domestic Defense Capabilities Drives The Country's Defense Imports
4.1.2. Defense Imports Are Expected To Increase Over The Period 2013-2017
4.1.3. Russia Is A Significant Defense Trade Partner Of Vietnam
4.1.4. Aircraft And Ships Account For The Majority Of Defense Imports During The Review Period
4.2. Export Market Dynamics
4.2.1. The Country Has Been Unable To Access The Global Defense Market
5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power Of Supplier: Low
5.1.2. Bargaining Power Of Buyer: Medium
5.1.3. Barrier To Entry: Medium
5.1.4. Intensity Of Rivalry: Low
5.1.5. Threat Of Substitution: Low To Medium
6 Market Entry Strategy
6.1. Market Regulation
6.1.1. Vietnam Has Not Disclosed Any Offset Obligation
6.2. Market Entry Route
6.2.1. Foreign Equipment Manufacturers Can Enter The Market Through Direct Commercial Sales
6.2.2. Government To Government Deals Are An Attractive Entry Route To The Country's Defense Market
6.3. Key Challenges
6.3.1. Lack Of Private Participants And Foreign Direct Investment May Restrict Domestic Defense Industry
Growth
6.3.2. Lack Of Transparency Impedes The Growth Of Vietnam's Defense Industry
Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

5. 7 Competitive Landscape And Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. Vietnam Shipbuilding Industry Corporation (vinashin): Overview
7.2.2. Vietnam Shipbuilding Industry Corporation (vinashin): Products
7.2.3. Vietnam Shipbuilding Industry Corporation (vinashin): Recent Announcements And Strategic
Initiatives
7.2.4. Vietnam Shipbuilding Industry Corporation (vinashin): Alliances
7.2.5. Vietnam Shipbuilding Industry Corporation (vinashin): Recent Contract Awards
8 Business Environment And Country Risk
8.1. Demographics And Social Statistics
8.1.1. Population - Rural
8.1.2. Population - Urban
8.1.3. Population - Number Of Households
8.2. Economic Performance
8.2.1. Gross Domestic Per Capita
8.2.2. Gross Domestic Product, Current Us$
8.2.3. Exports Of Goods And Services
8.2.4. Imports Of Goods And Services
8.2.5. Manufacturing Output
8.2.6. Consumer Price Index
8.2.7. Local Currency Unit Per Us$
8.2.8. Local Currency Unit Per Eur
8.2.9. Lending Rate (%)
8.2.10. Deposit Rate (%)
8.2.11. Real Interest Rate (%)
8.2.12. Goods Exports As A % Of Gdp
8.2.13. Goods Imports As A % Of Gdp
8.2.14. Goods Trade Surplus/deficit As A % Of Gdp
8.2.15. Services Imports As A % Of Gdp
8.2.16. Services Exports As A % Of Gdp
8.2.17. Services Trade Surplus/deficit As A % Of Gdp
8.2.18. Net Foreign Direct Investment
8.2.19. Net Fdi As A Percentage Of Gdp
8.2.20. International Reserves, Including Gold
8.3. Energy And Utilities
8.3.1. Total Conventional Thermal Electricity Net Generation
8.3.2. Hydroelectricity Net Generation
8.3.3. Nuclear Electricity Net Generation
Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

6. 8.3.4. Total Conventional Thermal Electricity Installed Capacity
8.3.5. Total Electricity Imports
8.3.6. Proved Reserves Of Natural Gas (trillion Cubic Feet)
8.3.7. Total Petroleum Consumption
8.3.8. Crude Oil Proved Reserves (billion Barrels)
8.4. Infrastructure Quality And Availability
8.4.1. Rail Lines, Total Network
8.4.2. Air Transport, Freight (million Ton-km)
8.4.3. Overall Construction (us$ Billion)
8.5. Minerals
8.5.1. Mining, Manufacturing, Utilities Output
8.6. Technology
8.6.1. Patents Granted
8.7. Telecommunication
8.7.1. Telephone Lines
8.7.2. Telephone Lines Penetration Rate
9 Appendix
9.1. About Sdi
9.2. Disclaimer
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Future of the Vietnamese Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018