Lockheed Martin & Boeing Top 2 arms manufacturing companies
China not in top-100 list but has major market share
New Delhi: America and Western European defence equipment producing companies continue to dominate the list of world ‘’Top- 100’ arms producers in 2012, leading to a global business of US $ 395 Billion. Notably, Russian companies which are part of the list have been producing more for a fast growing domestic market and have shown a rise despite the global slowdown.
The ten-state owned companies of China, though not assessed among the list of ‘Top-100’ due to lack of data, separately did business worth US $ 268 Billion during that year – cornering 40 per cent of the global market share.
The Stockholm International Peace Research Institute (SIPRI), a Sweden based acclaimed think- tank released its report on arms production and sales along with list of ‘Top-100’ companies. The report was made public in Munich, Germany on Friday and simultaneously put it on its website www.sipri.org. The SIPRI has maintained an arms industry database since 1989. Arms sales are defined as sales of military goods and services to military customers, including those for domestic procurement and export.
Three Indian companies among Top 100 are: Hindustan Aeronautics Limited at 40th ranks, Ordanance Factory Board (OFB) at 47th rank and Bharat Electronics Limited at 74th ranks globally.
Such was the dominance of America that sales by the 42 US-based arms producers amounted to almost 58 per cent of the total arms sales of US $ 395 Billion for the ‘Top 100’ companies. About 30 companies of Western Europe added up to another 28 per cent.
The total of all ‘Top-100’ producing companies totaled US $395 billion in 2012. This result represents a 4.2 per cent decrease in real terms compared to the companies in the ‘Top-100’ list for 2011.
The withdrawal of troops from Iraq and the forthcoming withdrawal from Afghanistan has led to a drop in sales. The largest percentage fall in arms sales in the Top 100 in 2012—by 60 per cent in real terms—was by KBR, which provided logistic support to US forces in Iraq, had the largest relative fall in arms sales in the Top-100.
Sales by companies providing armoured vehicles to US forces in Iraq and Afghanistan, including BAE Systems, General Dynamics, Oshkosh Truck, Navistar and AM General also decreased. In contrast, high levels of activity in Afghanistan meant that DynCorp increased its arms sales by 10 per cent. Cuts in military spending in Western Europe and the fall in the demand for heavy arms has affected the sales of companies such as the tank producer Krauss-Maffei Wegmann (down 21 per cent) and the shipbuilder Thyssen Krupp (down 27 per cent).
Russian companies doing well
While sales by largest arms companies dropped in 2012 Russian companies did good business, mainly due to an increased domestic market aided by exports. Business by Russian firms increased sharply by 28 per cent. Of the 6 Russian companies in the Top-100 list, all except United Aircraft Corporation saw increases in excess of 20 per cent, and Almaz Antei—with a 41 per cent rise—now stands in 14th place in the Top-100, the highest position taken by a Russian company since 2002. This increase in estimated arms sales in 2012 mainly reflects large and growing domestic sales, as part of Russia’s US $ 700 Billion State Armaments Plan for ten years ( 2010-2020).
“The Russian arms industry is gradually re-emerging from the ruins of the Soviet industry. Nonetheless, the industry is still plagued by outdated equipment, inefficient organization and widespread corruption, which will continue to limit Russia’s ability to compete technologically with the West”, the SIPRI report said quoting Dr Sam Perlo-Freeman, Director of SIPRI’s Military Expenditure and Arms Production Programme.He is the co-author of the report along with Dr Pieter D. Wezeman.
China military companies come out with blazing guns
This list could have been very different had the Chinese companies been listed. SIPRI said Chinese firms were not listed in the ranking due to non-availability of data from the companies. SIPRI said global sales of arms and military services —totalled $ 395 billion in 2012 but added that separate from this China alone did US $ 268 billion worth of business of Chinese companies. If added, the figure works out to be US $ 663 billion.
“Information is available on the 10 major state-owned conglomerates under which most of the Chinese arms industry is organized. These 10 companies had total sales of around $ 268 billion,” The SIPRI report said. At least 9 of these 10 companies would almost certainly be in the ‘Top-100’ list, if figures for arms sales were available. Of these, four to six companies would probably be in the top 20, and one—aviation company AVIC—may be in the top 10, the report said.
China’s military spending more than quadrupled in real terms between 2000 and 2012, and the country has engaged in major efforts to develop its domestic industry, SIPRI observed.
In fact, last year in March, the SIPRI list had then ranked China among the top five arms exporters pushing out biggies like UK. Pakistan imported about 55 percent of its military hardware, which includes tanks, guns and warships, from China.
Notably, on January 29, just two days before the SIPRI report, Frank Kendall, Under Secretary of Defence for acquisition, technology and logistics, in US had warned about China. Addressing the House Armed Services Committee of US, he said “technological superiority (of the US) is not assured and we cannot be complacent about our posture," he told the
Kendall had warned that the United States could lose its dominant position if it failed to respond to the altered strategic landscape and went on cite China's major investments in anti-ship missiles, stealth fighter jets, hypersonic vehicles and other hi-tech weaponry.
SIPRI’s other pointers
This year, for the first time, the SIPRI Top 100 includes data for Ukraine. The consolidation of much of the Ukrainian arms industry into a single holding company, Ukroboronprom—whose arms sales increased by 14 per cent in 2012, reaching $1.44 billion—puts that company clearly in the Top 100 for both 2011 and 2012.
Brazilian aircraft manufacturer Embraer entered the Top 100 in 2010 and was one of the largest risers in 2012, by 36 per cent in real terms, climbing from 83rd to 66th position in the Top 100 with arms sales of $1.06 billion.
The growth of the South Korean arms industry continued in 2012 with a 4.2 per cent real increase in arms sales by companies in the Top 100. The total arms sales of Korean companies in the Top 100 have more than doubled in real terms since 2002.