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Seizing Localization Opportunities in the Gulf Cooperation Council s Defense Industry
Seizing Localization Opportunities in the Gulf Cooperation Council s Defense Industry
An Analysis of GCC Family Groups Potential to Diversif y and Unlock Growth Opportunities in the Aerospace and Defense Industry
18-Jun-2024
South Asia, Middle East & North Africa
Market Research
The aerospace and defense (A&D) industry in the Gulf Cooperation Council (GCC) countries is experiencing transformative changes due to regional security dynamics and strategic economic initiatives. Heightened tensions in the Middle East and the increased threat of a region-wide conflict—evinced by the 2023 Israel-Hamas conflict and Iran's retaliatory missile and drone attacks—call for GCC states’ stronger defense collaboration and upgrading military capabilities. Additionally, the security threats in the Red Sea, with Houthi rebel attacks on commercial vessels, underscore the urgent need for enhanced maritime defense against Iran's proxy groups, emphasizing the pressing requirement for robust defense measures.
The region's A&D sector features notable trends that are reshaping its trajectory. The most important trend is the strategic emphasis on achieving self-reliance in defense due to geopolitical imperatives and a desire for increased autonomy in safeguarding national security interests. There is a concerted effort to leverage the A&D industry as a catalyst for wider economic diversification, recognizing its potential to stimulate growth, create employment opportunities, and foster technological innovation within the region. Furthermore, the favorable economic environment, with stable investment climates and growing global demand for defense products and services, presents compelling prospects for export-oriented growth strategies.
The business environment in the GCC is dominated by large, family-owned industrial conglomerates that have diversified industrial portfolios. These family groups present significant prospects for advancing the GCC's A&D sector. Analyzing their involvement in various industries, existing manufacturing capabilities, and any current defense-related activities reveals how their capabilities align with potential opportunities within the A&D supply chain. Strategic pathways for these family groups to enter the A&D sector include extending existing commercial maintenance, repair, and overhaul (MRO) services to the military, manufacturing Tier III and Tier II components using existing or upgraded facilities, expanding capabilities through new entities and acquisitions, and forming joint ventures with foreign OEMs to localize manufacturing via technology transfer.
Overall, the GCC's A&D industry holds substantial growth opportunities, aligning with the region's broader vision of economic diversification and strategic advancement. Recommendations for both OEMs and family groups highlight the potential for collaborative efforts to enhance the sector's development.
Why is it Increasingly Difficult to Grow?
The Strategic Imperative 8™
The Impact of the Top 3 Strategic Imperatives on the Gulf Cooperation Council’s Aerospace and Defense Industry
Growth Opportunities Fuel the Growth Pipeline Engine™
Introduction—Current Situation and Vision 2030
Growth Drivers
GCC Governments Drive Self-reliance in Defense and Grant It Strategic Importance
Several A&D Opportunities Are a Logical Extension of the Industrial Capabilities of Many Family Groups
The A&D Sector Is a Promising Vehicle for the GCC’s Economic Diversification Agenda
The A&D Sector Is a Promising Vehicle for the GCC’s Economic Diversification Agenda (continued)
There Is a Favorable Economic Environment for Export-driven Growth Opportunities
Growth Restraints
The GCC Has a Relatively Underdeveloped Industrial Base, Especially in High-tech Manufacturing Sectors
Skilled Technical Personnel and Experienced R&D Professionals are Scarce in the GCC
Zamil Group—Timeline
Zamil Group—Profile
Zamil Group—Prospects for Diversification into A&D
Suhail Bahwan Group—Timeline
Suhail Bahwan Group—Profile
Suhail Bahwan Group—Prospects for Diversification into A&D
Juffali Group—Timeline
Juffali Group—Profile
Juffali Group—Prospects for Diversification into A&D
Zahid Group—Timeline
Zahid Group—Profile
Zahid Group—Prospects for Diversification into A&D
Al Ghurair Group—Timeline
Al Ghurair Group—Profile
Al Ghurair Group—Prospects for Diversification into A&D
Al Khorayef Group—Timeline
Al Khorayef Group Profile
Al Khorayef Group—Prospects for Diversification into A&D
Key Opportunities for Family Groups—New Capability Development
Key Opportunities for Family Groups—Existing Capability Extension
Key Opportunities for Family Groups—New Product Development
Key Opportunities for Family Groups—Services Development and Offset Partnerships
Diversification Strategy 1—Outsourced Manufacturing of Components Using Existing or Upgraded Facilities
Diversification Strategy 1—Outsourced Manufacturing of Components Using Existing or Upgraded Facilities (continued)
Diversification Strategy 2—Expanding New Capabilities, Setting Up New Entities, and Acquiring Existing Firms
Diversification Strategy 3—Establishing JVs with Foreign OEMs is Ideal for Localizing Manufacturing through Technology Transfer
Diversification Strategy 3—Examples of JVs between Local Partners and OEMs
Diversification Strategy 3—Examples of JVs between Local Partners and OEMs (continued)
Growth Opportunity 1: Extending Existing Capabilities to Provide MRO, Components, and Base Materials for A&D OEMs
Growth Opportunity 1: Extending Existing Capabilities to Provide MRO, Components, and Base Materials for A&D OEMs (continued)
Growth Opportunity 2: Investing in New Capabilities to Diversify into the A&D Supply Chain
Growth Opportunity 2: Investing in New Capabilities to Diversify into the A&D Supply Chain (continued)
Growth Opportunity 3: Developing Turn-key Platforms and Solutions in A&D at the System and Subsystem Levels
Growth Opportunity 3: Developing Turn-key Platforms and Solutions in A&D at the System and Subsystem Levels (continued)
Appendix—Sources
List of Exhibits
Legal Disclaimer
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| Deliverable Type | Market Research |
|---|---|
| Author | Jed Joshua |
| Industries | Aerospace, Defence and Security |
| No Index | No |
| Is Prebook | No |
| Keyword 1 | GCC defense localization strategies |
| Keyword 2 | Regional defense industry growth |
| Keyword 3 | Gulf Cooperation defense market |
| Podcast | No |
| WIP Number | PFKE-01-00-00-00 |