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Summary
Colombia's drive towards economic prosperity has been stifled by internal insurgencies resulting from groups such as FARC (Revolutionary Armed Forces of Colombia) and ELN (National Liberation Army). The country is facing a five decade old conflict with FARC rebels and is likely to be alleviated with the justice deal between FARC and the government. However, there is an increasing threat posed by the criminal gangs vying for the control of the country's lucrative drug production. Also, Colombia's relationship with neighbouring Venezuela has been strained owing to the issues like border disputes and infiltration of rebels. These factors are expected to drive the defense spending of the nation with a substantial allocation for procurement of military equipment

Key Findings
- Over the historic period, Colombian defense expenditure registered a growth rate of 7.87%, increasing from US$5.6 billion in 2011 to US$7.5 billion in 2015

- Colombia's military expenditure, valued at US$8.1 billion in 2016, is expected to increase to US$9.9 billion by 2020, registering a CAGR of 5.04% over the forecast period

- Colombia's military expenditure will be driven by the threat from Venezuela, threat from rebel groups and development of domestic industry

- The Defense Ministry is expected to procure fighters and multi-role aircraft, transport and utility aircraft, main battle tank, infantry fighting vehicles and armored personnel carriers

Synopsis
Strategic Defense Intelligence's - Colombian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2020 offers detailed analysis of industry with market size forecasts for the period 2016-2020 is done. Also, analysis of factors that influence demand for the industry, key market trends, and challenges faced by industry participants is covered.

In particular, it provides an in-depth analysis of the following:

- Defense industry market size and drivers: detailed analysis of the defense industry during 2016-2020, including highlights of the demand drivers and growth stimulators. It also provides a snapshot of the country's expenditure and modernization patterns

- Budget allocation and key challenges: insights into procurement schedules formulated within the country and a breakdown of the defense budget with respect to the army, navy, and air force. It also details the key challenges faced by defense market participants within the country

- Porter's Five Force analysis of the defense industry: analysis of the market characteristics by determining the bargaining power of suppliers, buyers, threat of substitution, intensity of rivalry, and barriers to entry

- Import and Export Dynamics: analysis of prevalent trends in the country's imports and exports over the last five years

- Market opportunities: details of the top five defense investment opportunities from 2015 to 2025

- Competitive landscape and strategic insights: including an overview of key players, together with insights such as key alliances, strategic initiatives, and a brief financial analysis

Reasons To Buy
- Identify and track global defense market and make regional comparisons to effectively target new revenue streams

- Understand the importance of being led by the defense ministries in the military procurement market and define your strategies with insight on what your customers really want by analyzing recent orders, technical specifications and the country's expected investment pattern during 2016-2020

- Make correct business decisions based on detailed analysis of the defense industry from 2016-2020 which includes the total competitive landscape of the sector with detailed profiles of the top domestic and foreign defense manufacturers along with information about their products, alliances, recent contract wins and financial analysis

- Determine prospective investment areas by gaining an in-depth understanding of the industry in terms of market opportunities

- Channelize resources by identifying various military requirements that are expected to generate revenues across different sectors during 2016-2020

Table Of Contents

Future of the Colombian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2020
Table of Contents
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. Colombian defense expenditure expected to reach US$9.4 billion by 2019
3.1.2. Internal threats from rebel groups, strained relationship with Venezuela, and the development of the domestic industry set to increase defense expenditure
3.1.3. Defense expenditure as a percentage of GDP expected to be 1.8% by 2019
3.2. Analysis of Defense Budget Allocation
3.2.1. Majority of defense budget allocated to revenue expenditure
3.2.2. Army accounts for majority of defense budget
3.2.3. Budget allocation for the army is higher than the remaining military divisions
3.2.4. The country's expenditure on its navy to reach US$1.3 billion by 2019
3.2.5. Expenditure on the air force estimated to increase at a CAGR of 6.61% over the forecast period
3.2.6. Other expenses constitute a substantial amount of the total defense budget
3.3. Homeland Security Market Size and Forecast
3.3.1. Homeland security market to grow considerably during 2016-2020
3.3.2. High crime levels and drug trafficking expected to increase homeland security expenditure
3.3.3. SDI Terrorism Index rates Colombia to be a "highly affected" region
3.3.4. Colombia scores 1.9 on the terrorism index
3.4. Benchmarking with Key Global Markets
3.4.1. Colombian defense expenditure is forecast to grow faster than the majority of the largest global defense budgets
3.4.2. Colombian defense expenditure is one of the highest in South America
3.4.3. Colombia spends 1.8% of its GDP on defense
3.4.4. Colombia is "highly affected" by acts of terrorism
3.5. Market Opportunities: Key Trends and Drivers
3.5.1. Fighters and Multi-Role Aircraft
3.5.2. Police Modernization
3.5.3. Transport and Utility Aircraft
3.5.4. Main Battle Tank
3.5.5. Infantry Fighting Vehicles
3.5.6. Armored Personnel Carriers
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. The limitations of the domestic defense industry will support arms imports
4.1.2. Defense imports have grown significantly over the last five years
4.1.3. Aircraft account for majority of defense imports
4.1.4. US and Israel continue to be major arms suppliers
4.2. Export Market Dynamics
4.2.1. Colombia is not a major defense exporting country
5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining power of the supplier: low to medium
5.1.2. Bargaining power of the Buyer: high to medium
5.1.3. Barrier to entry: medium to high
5.1.4. Intensity of rivalry: low
5.1.5. Threat of Substitution: medium
6 Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset guidelines are channeled to benefit industrial and social sectors
6.1.2. FDI in the defense sector is closed
6.2. Market Entry Route
6.2.1. Direct selling is the preferred market entry route for foreign OEMs
6.3. Key Challenges
6.3.1. Corruption, bribery, and influence of anti-state elements damages the credibility of the military
6.3.2. Low capital expenditure discourages both foreign and domestic firms
7 Competitive landscape and Strategic Insights
7.1. Competitive landscape Overview
7.2. Key Public Sector Companies
7.2.1. Industria Militar: Overview
7.2.2. Industria Militar: Major Products and Services
7.2.3. Industria Militar: Recent Announcements and Strategic Initiatives
7.2.4. Industria Militar: Alliances
7.2.5. Industria Militar: Recent Contract Wins
7.3. Key Private Sector Companies
7.3.1. Sudamin Aeronautica y Defensa S.A.: Overview
7.3.2. Sudamin Aeronautica y Defensa S.A.: Major Products and Services
7.3.3. Sudamin Aeronautica y Defensa S.A.: Recent Announcements and Strategic Initiatives
7.3.4. Sudamin Aeronautica y Defensa S.A.: Alliances
7.3.5. Cotecmar: Overview
7.3.6. Cotecmar: Major Products and Services
7.3.7. Cotecmar: Recent Announcements and Strategic Initiatives
7.3.8. Cotecmar: Alliances
7.3.9. Cotecmar: Recent Contract Wins
8 Business Environment and Country Risk
8.1.1. Total Rural Population
8.1.2. Total Urban Population
8.1.3. Number of Households
8.2. Economic Performance
8.2.1. GDP Per Capita (In US$)
8.2.2. GDP, Current Prices (US$ Billion)
8.2.3. Exports of Goods and Services, Current Prices (US$ billion)
8.2.4. Imports of goods and services, current prices (US$ billion)
8.2.5. Gross National Disposable Income
8.2.6. Manufacturing Output (US$ Billion)
8.2.7. Consumer Price Index
8.2.8. Wholesale Price Index
8.2.9. Local Currency Unit Per US$ (period average)
8.2.10. Local Currency Unit Per EUR (period average)
8.2.11. Lending Rate (%)
8.2.12. Deposit Rate (%)
8.2.13. Real Interest Rate (%)
8.2.14. Market Capitalization of Listed Companies (US$ Billion)
8.2.15. Market Capitalization of Listed Companies (% of GDP)
8.2.16. Total Government Cash Surplus/ Deficit (LCU Billion)
8.2.17. Government Cash Surplus/ Deficit as % of GDP (LCU)
8.2.18. Goods Exports as a % of GDP
8.2.19. Goods Imports as % of GDP
8.2.20. Goods Balance as a % of GDP
8.2.21. Services Imports as a % of GDP
8.2.22. Services Exports as a % of GDP
8.2.23. Services Balance as % of GDP
8.2.24. Foreign Direct Investment, net (BoP, current US$ Billion)
8.2.25. Net Foreign Direct Investment as % of GDP
8.2.26. International Reserves, Including Gold (US$ Billion)
8.2.27. External Debt as % of GDP
8.3. Energy and Utilities
8.3.1. Total Conventional Thermal Electricity Net Generation (Billion Kilowatt Hours)
8.3.2. Hydroelectricity Net Generation (Billion Kilowatt Hours)
8.3.3. Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts)
8.3.4. Total Electricity Exports (Billion Kilowatt Hours)
8.3.5. Proved Reserves of Natural Gas (Trillion Cubic Feet)
8.3.6. Total Petroleum Consumption
8.3.7. Crude Oil Proved Reserves
8.3.8. Total Non-Hydro Renewable Electricity Net Generation (Billion Kilowatts)
8.4. Infrastructure Quality and Availability
8.4.1. Roads, total network
8.4.2. Air Transport (freight)
8.4.3. Overall Construction
8.5. Minerals
8.5.1. Mining, Manufacturing, Utilities Output
8.6. Technology
8.6.1. Research and Development Expenditure
8.6.2. 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

List of Tables
Table 1: Colombian Defense Expenditure (US$ Billion), 2011-2015
Table 2: Colombian Defense Expenditure (US$ Billion), 2016-2020
Table 3: Colombian Defense Expenditure (COP Billion), 2011-2015
Table 4: Colombian Defense Expenditure (COP Billion), 2016-2020
Table 5: Colombian GDP Growth vs. Defense Expenditure Growth, and Defense Expenditure as Percentage of GDP Growth, 2011-2015
Table 6: Colombian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016-2020
Table 7: Colombian GDP Growth vs. Defense Expenditure Growth, and Defense Expenditure as Percentage of GDP Growth (in terms of local currency), 2011-2015
Table 8: Colombian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth (in terms of local currency), 2016-2020
Table 9: Colombian Defense Budget split between Capital and Revenue Expenditure (%), 2011-2015
Table 10: Colombian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016-2020
Table 11: Colombian Defense Expenditure Breakdown (%), 2011-2015
Table 12: Colombian Defense Expenditure Breakdown (%), 2016-2020
Table 13: Colombian Defense Expenditure for the Army (US$ billion), 2011-2015
Table 14: Colombian Defense Expenditure for the Army (US$ billion), 2016-2020
Table 15: Colombian Defense Expenditure for the Army (COP billion), 2011-2015
Table 16: Colombian Defense Expenditure for the Army (COP billion), 2016-2020
Table 17: Colombian Defense Expenditure for the Navy (US$ billion), 2011-2015
Table 18: Colombian Defense Expenditure for the Navy (US$ billion), 2016-2020
Table 19: Colombian Defense Expenditure for the Navy (COP billion), 2011-2015
Table 20: Colombian Defense Expenditure for the Navy (COP billion), 2016-2020
Table 21: Colombian Defense Expenditure for the Air Force (US$ billion), 2011-2015
Table 22: Colombian Defense Expenditure for the Air Force (US$ billion), 2016-2020
Table 23: Colombian Defense Expenditure for the Air Force (COP billion), 2011-2015
Table 24: Colombian Defense Expenditure for the Air Force (COP billion), 2016-2020
Table 25: Colombian Defense Expenditure for Other Expenses (US$ billion), 2011-2015
Table 26: Colombian Defense Expenditure for Other Expenses (US$ billion), 2016-2020
Table 27: Colombian Defense Expenditure for Others (COP billion), 2011-2015
Table 28: Colombian Defense Expenditure for the Others (COP billion), 2016-2020
Table 29: Colombian Homeland Security Expenditure (US$ Billion), 2011-2015
Table 30: Colombian Homeland Security Expenditure (US$ Billion), 2016-2020
Table 31: Colombian Homeland Security Expenditure (COP Billion), 2011-2015
Table 32: Colombian Homeland Security Expenditure (COP Billion), 2016-2020
Table 33: Benchmarking with Key Markets - 2011-2015 vs. 2016-2020
Table 34: SDI Terrorism Index
Table 35: Offset Regulations in Colombia
Table 36: Industria Militar - Major Products and Services
Table 37: Industria Militar - Alliances
Table 38: Industria Militar - Recent Contract Wins
Table 39: Sudamin Aeronautica y Defensa S.A. - Major Products and Services
Table 40: Sudamin Aeronautica y Defensa S.A. - Alliances
Table 41: Cotecmar - Major Products and Services
Table 42: Cotecmar - Alliances
Table 43: Cotecmar - Recent Contract Wins

List of Figures
Figure 1: Colombian Defense Expenditure (US$ Billion), 2011-2015
Figure 2: Colombian Defense Expenditure (US$ Billion), 2016-2020
Figure 3: Colombian Defense Expenditure (COP Billion), 2011-2015
Figure 4: Colombian Defense Expenditure (COP Billion), 2016-2020
Figure 5: Colombian GDP Growth vs. Defense Expenditure Growth, and Defense Expenditures Percentage of GDP Growth, 2011-2015
Figure 6: Colombian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016-2020
Figure 7: Colombian GDP Growth vs. Defense Expenditure Growth, and Defense Expenditures Percentage of GDP Growth ((in terms of local currency), 2011-2015
Figure 8: Colombian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth (in terms of local currency), 2016-2020
Figure 9: Colombian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011-2015
Figure 10: Colombian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016-2020
Figure 11: Colombian Defense Expenditure Breakdown (%), 2011-2015
Figure 12: Colombian Defense Expenditure Breakdown (%), 2016-2020
Figure 13: Colombian Defense Expenditure for the Army (US$ billion), 2011-2015
Figure 14: Colombian Defense Expenditure for the Army (US$ billion), 2016-2020
Figure 15: Colombian Defense Expenditure for the Army (COP billion), 2011-2015
Figure 16: Colombian Defense Expenditure for the Army (COP billion), 2016-2020
Figure 17: Colombian Defense Expenditure for the Navy (US$ billion), 2011-2015
Figure 18: Colombian Defense Expenditure for the Navy (US$ billion), 2016-2020
Figure 19: Colombian Defense Expenditure for the Navy (COP billion), 2011-2015
Figure 20: Colombian Defense Expenditure for the Navy (COP billion), 2016-2020
Figure 21: Colombian Defense Expenditure for the Air Force (US$ billion), 2011-2015
Figure 22: Colombian Defense Expenditure for the Air Force (US$ billion), 2016-2020
Figure 23: Colombian Defense Expenditure for the Air Force (COP billion), 2011-2015
Figure 24: Colombian Defense Expenditure for the Air Force (COP billion),2016-2020
Figure 25: Colombian Defense Expenditure for Other Expenses (US$ billion), 2011-2015
Figure 26: Colombian Defense Expenditure for the Other Expenses (US$ billion), 2016-2020
Figure 27: Colombian Defense Expenditure for Others (COP billion), 2011-2015
Figure 28: Colombian Defense Expenditure for Others (COP billion), 2016-2020
Figure 29: Colombian Homeland Security Expenditure (US$ Billion), 2011-2015
Figure 30: Colombian Homeland Security Expenditure (US$ Billion), 2016-2020
Figure 31: Colombian Homeland Security Expenditure (COP Billion), 2011-2015
Figure 32: Colombian Homeland Security Expenditure (COP Billion), 2016-2020
Figure 33: SDI Terrorism Heat Map, 2014
Figure 34: SDI Terrorism Index, 2014
Figure 35: Benchmarking with Key Markets - 2011-2015 vs. 2016-2020
Figure 36: Defense Expenditure of the World's Largest Military Spenders (US$ Billion), 2014 and 2019
Figure 37: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2014
Figure 38: Colombia's Fighters and Multi-Role Aircraft Market Size (US$ Million), 2014-2024
Figure 39: Colombia's Police Modernization Market Size (US$ Million), 2014-2024
Figure 40: Colombia's Transport and Utility Aircraft Market Size (US$ Million), 2014-2024
Figure 41: Colombia's Main Battle Tank Market Size (US$ Million), 2014-2024
Figure 42: Colombia's Infantry Fighting Vehicle Market Size (US$ Million), 2014-2024
Figure 43: Colombia's Armored Personnel Carriers Market Size (US$ Million), 2014-2024
Figure 44: Colombian Defense Import TIV value (US$ Million), 2009-2013
Figure 45: Colombian Defense Imports by Category (%), 2009-2013
Figure 46: Colombian Defense Imports by Country (%), 2009-2013
Figure 47: Industry Dynamics - Porter's Five Forces Analysis
Figure 48: Total Rural Population (In Millions), 2014-2023
Figure 49: Colombian Urban Population (In Millions), 2014-2023
Figure 50: Number of Households (In Millions), 2002-2011
Figure 51: Colombian GDP Per Capita, 2014-2023
Figure 52: Colombian GDP at Current Prices (US$ Billion), 2010-2019
Figure 53: Colombian Exports of Goods and Services, Current Prices (US$ Billion), 2003-2012
Figure 54: Colombian Imports of Goods and Services, Current Prices (US$ billion), 2003-2012
Figure 55: Colombian Gross National Disposable Income (US$ Billion), 2002-2011
Figure 56: Colombian Manufacturing Output (US$ Billion), 2002-2011
Figure 57: Colombian Consumer Price Index, 2008-2017
Figure 58: Colombian Wholesale Price Index, 2002-2011
Figure 59: Colombian Local Currency Unit Per US$ (period average), 2009-2018
Figure 60: Colombian Local Currency Unit Per EUR (period average), 2008-2017
Figure 61: Colombian Lending Rate (%), 2002-2011
Figure 62: Colombian Deposit Rate (%), 2002-2011
Figure 63: Colombian Real Interest Rate (%), 2002-2011
Figure 64: Market Capitalization of Listed Companies in Colombia (US$ Billion), 2003-2012
Figure 65: Market Capitalization of Listed Companies in Colombia (% of GDP), 2002-2011
Figure 66: Total Government Cash Surplus/ Deficit (LCU Billion), 2002-2011
Figure 67: Government Cash Surplus/ Deficit as % of GDP (LCU), 2001-2010
Figure 68: Colombian Goods Exports as % of GDP, 2002-2011
Figure 69: Colombian Goods Imports as % of GDP, 2002-2011
Figure 70: Colombian Goods Balance a % of GDP, 2002-2011
Figure 71: Colombian Services Imports as % of GDP, 2002-2011
Figure 72: Colombian Services Exports as a % of GDP, 2002-2011
Figure 73: Colombian Services Balance as % of GDP, 2002-2011
Figure 74: Colombian Foreign Direct Investment, net (BoP, current US$ Billion) , 2002-2011
Figure 75: Colombian Net Foreign Direct Investment as % of GDP, 2002-2011
Figure 76: Colombian International Reserves, including Gold (US$ Billion), 2002-2011
Figure 77: Colombian External Debt as % of GDP, 2001-2010
Figure 78: Total Conventional Thermal Electricity Net Generation (Billion Kilowatt Hours), 2002-2011
Figure 79: Colombian Hydroelectricity Net Generation (Billion Kilowatt Hours), 2002-2011
Figure 80: Total Conventional Thermal Electricity Installed Capacity (Million Kilowatts),
Figure 81: Colombian Total Electricity Exports (Billion Kilowatt Hours), 2001-2010
Figure 82: Colombia's Proved Reserves of Natural Gas (Trillion Cubic Feet), 2004-2013
Figure 83: Colombian Total Petroleum Consumption (Thousand Barrels Per Day), 2003-2012
Figure 84: Colombian Crude Oil Proved Reserves (Million Barrels), 2004-2013
Figure 85: Colombian Non-Hydro Renewable Electricity Net Generation (Billion Kilowatts), 2001-2010
Figure 86: Roads, Total Network (Km), 2000-2009
Figure 87: Air Transport (Freight), Million ton-km, 2002-2011
Figure 88: Overall Construction (US$ Billion), 2007-2016
Figure 89: Mining, Manufacturing, Utilities Output (US$ Billion), 2002-2011
Figure 90: Colombian Research and Development Expenditure (Local Currency Thousands), 2001-2010
Figure 91: Patents Granted, 2003-2012
Figure 92:Telephone Lines in Colombia (in Millions), 2002-2011
Figure 93: Telephone Lines Penetration Rate in Colombia (per 100 people), 2002-2011

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