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Future of the Romanian Defense Industry –

Market Attractiveness, Competitive Landscape

and Forecasts to 2020

Future of the Romanian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020

2

Summary

“Future of the Romanian Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts

to 2020” report offers the reader detailed analysis of the defense budget over the next five years. Alongside

it offers insights into the market opportunities and entry strategies adopted by foreign OEMs (original

equipment manufacturers) to gain a market share in the Romanian defense industry.

The report provides detailed analysis of the current industry size and growth expectations during 2016-

2020, including highlights of the key growth stimulators. It also benchmarks the industry against key global

markets and provides detailed understanding of emerging opportunities in specific areas.

Key Findings

The Romanian defense budget stands at US$XX billion in 2015, registering a CAGR of XX% during the

historic period. Moreover, an increase in defense expenditure is expected during the forecast period, at a

CAGR of XX%, to value US$XX billion in 2020. The country’s defense expenditure will be driven by its

participation in peacekeeping missions and joint operations, border control measures, and the

modernization of its armed forces. In addition, capital expenditure is expected to register a CAGR of XX%

during the forecast period, to value US$XX million in 2020. On a cumulative basis, the country is estimated

to spend US$XX billion over the forecast period on the procurement of defense equipment. In the coming

years demand for equipment is mainly expected to revolve around multi-role aircraft, soldier modernization

systems–C4ISR, and cyber security systems. The majority of the defense budget will be spent on revenue

expenditure, which includes personnel salaries, operational expenses, training, and development.

Key Features and Benefits

The report provides detailed analysis of the Romanian defense industry during 2011–2020, including the

factors that influence the military expenditure. It provides detailed expectations of growth rates and

projected total expenditure.

It provides the manufacturers with insights on market opportunities along with industry structure and

dynamics prevalent in the country. In addition, the report focuses on the regulations governing the

Romanian defense industry and the potential market entry strategies with an expert analysis of the

competitive structure.


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1. Market Attractiveness and Emerging Opportunities

1.1. Defense Market Size Historical and Forecast

1.1.1. Romanian defense expenditure expected to register a CAGR of XX% over the forecast period

In 2015, the Romanian MoD allocated US$XX billion to its total defense budget, registering a CAGR of XX%

during the historic period. The country’s defense budget was lowest in 2012, due to the austerity measures

imposed to even out the debt-ridden finances. Moreover, the country’s defense budget is expected to register

a CAGR of XX% during the forecast period, to value US$XX billion in 2020. Romania’s participation in

international peacekeeping missions and joint operations, border control measures, and the modernization of

its armed forces is expected to drive defense expenditure over the forecast period.

The following table and figure show the Romanian defense expenditure during the historic period:

Table 1: Romanian Defense Expenditure ( US$ Billion), 2011–2015

Year Defense expenditure (US$ bn)

Defense growth percentage

2011

2012

2013

2014

2015

CAGR 2011-2015

Source: Ministry of Defense and SDI analysis © SDI

Figure 1: Romanian Defense Expenditure (US$ Billion), 2011–2015


-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

1

2

3

4

5

6

2011 2012 2013 2014 2015

Gro

wth

rate

(%)

Def

ense

exp

end

itu

re (U

S$

Bill

ion

)

Defense expenditure (US$ bn) Defense growth percentage


4

The following table and figure show projected defense expenditure of the Romanian over the forecast period:

Table 2: Romanian Defense Expenditure (US$ Billion), 2016–2020

Year Defense expenditure (US$ bn)

Defense growth percentage

2016

2017

2018

2019

2020

CAGR 2016-2020


Figure 2: Romanian Defense Expenditure (US$ Billion), 2016–2020


0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

0

1

2

3

4

5

6

7

2016 2017 2018 2019 2020

Gro

wth

ra

te (

%)

De

fen

se

ex

pe

nd

itu

re (

US

$ B

illi

on

)

Defense expenditure (US$ bn) Defense growth percentage


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1.2. Analysis of Defense Budget Allocation

1.2.1. Share of capital expenditure expected to increase over forecast period

During 2011–2015, an average of XX% of the country’s total defense budget was allocated to capital

expenditure, while an average of XX% was reserved for revenue expenditure. Furthermore, capital

expenditure is estimated to increase from XX% in 2016 to XX% in 2020. This is primarily due to the

modernization plans undertaken by the country along with the ongoing restructuring program for its armed

forces. The first stage of the three-stage restructuring program was accomplished in 2007, which included

modern training and the acquisition of advanced equipment for the armed forces. The second stage of the

program is expected to end by 2015 and the final stage by 2025, which intends to achieve NATO and EU

integration completely. The remaining defense budget is allocated to revenue expenditure, which includes

personnel salaries, and the operation and maintenance costs of equipment and defense facilities.

The following table and chart display the Romanian defense budget share of capital and revenue expenditure

during the historic period:

Table 3: Romanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–2015

Year Capital Expenditure Share Revenue Expenditure Share

2011

2012

2013

2014

2015

Source: Ministry of Defense, Romania and SDI analysis © SDI

Figure 3: Romanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2011–

2015


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 2014 2015

Def

ense

Bud

get

Spl

it (%

)

Capital Expenditure Share Revenue Expenditure Share


6

The following table and chart display the Romanian defense budget share of capital and revenue expenditure

over the forecast period:

Table 4: Romanian Defense Budget Split Between Capital and Revenue Expenditure (%), 2016–2020

Year Capital Expenditure Share Revenue Expenditure Share

2016

2017

2018

2019

2020

Source: Ministry of Defense, Romania and SDI analysis © SDI

Figure 4: Romanian Defense Budget Split Between Capital, Revenue and Other Expenditure (%),

2016–2020


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2016 2017 2018 2019 2020

Defe

nse B

ud

get

Sp

lit

(%)

Capital Expenditure Share Revenue Expenditure Share


7

1.3. Homeland Security Market Size and Forecast

1.3.1. Romanian homeland security expected to grow at a steady pace

Romania’s homeland security expenditure values US$XX billion in 2015 and registered a growth rate of -

XX% during 2011–2015. However, it is projected to register a CAGR of XX% during the forecast period, to

value US$XX billion in 2020. The government’s focus on combating human trafficking, smuggling, and

cybercrime is expected to drive Romanian homeland security expenditure over the forecast period.

Moreover, the country faces illegal immigration along its border areas with neighboring Ukraine and Moldova.

As such, the country plans to procure electronic identification documents, automated border crossing

systems, and CCTV systems to counter threats posed by these criminal activities.

The table and chart below show the Romanian homeland security expenditure during the historic period:

Table 5: Romanian Homeland Security Expenditure (US$ Billion), 2011–2015

Year Homeland expenditure

(US$ million) % Growth

2011

2012

2013

2014

2015

Source: Ministry of Interior, Romania and SDI analysis © SDI

Figure 5: Romanian Homeland Security Expenditure (US$ Billion), 2011–2015

Source: Ministry of Interior, Romania and SDI analysis © SDI

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

1

2

3

4

5

6

7

2011 2012 2013 2014 2015

Gro

wth

rate

(%)

Ho

mel

and

Sec

uri

ty e

xpen

dit

ure

(US

$ B

illio

n)

Homeland Security Budget (US$ bn) Growth rate (%)


8

2. Industry Dynamics - Porter’s Five Forces Analysis

Figure 4: Industry Dynamics – Porter’s Five Forces Analysis

Source: SDI analysis © SDI

Intensity of Rivalry Bargaining Power of Supplier

Bargaining Power of Buyer

Barrier to Entry

Threat of Substitute


9

Report Methodology

SDI’s dedicated research and analysis teams consist of experienced professionals with a background in

industry research and consulting in the defense sector. The following research methodology is followed for all

databases and reports:

Secondary Research

The research process begins with exhaustive secondary research to source reliable qualitative and

quantitative information related to the defense market. The secondary research sources that are typically

referred to include, but are not limited to:

Industry associations

National government documents and statistical databases

Company websites, annual reports, financial reports, broker reports, investor presentations

Industry trade journals and other literature

Internal and external proprietary databases

News articles, press releases, and webcasts specific to the companies operating in the market

Primary Research

SDI conducts hundreds of primary interviews a year with industry participants and commentators in order to

validate its data and analysis. A typical research interview fulfills the following functions:

Provides first-hand information on market size, market trends, growth trends, competitive landscape,

and future outlook

Helps to validate and strengthen secondary research findings

Further develops the analysis team’s expertise and market understanding

Primary research involves e-mail interactions, telephone interviews, and face-to-face interviews for

each market category, division, and sub-division across geographies

The participants who typically take part in such a process include, but are not limited to:

Industry participants: CEOs, VPs, business development managers, market intelligence managers,

and national sales managers

External experts: investment bankers, valuation experts, research analysts, and key opinion leaders

specializing in defense markets

Conventions

Currency conversions are performed on the basis of average annual conversion rate format

calculations

All the values in tables, with the exception of compounded annual growth rate (CAGR) and

compounded annual rate of change (CARC), are displayed to one decimal place; therefore, due to

this rounding method, growth rates may appear inconsistent with absolute values

The forecasted values are projected on the basis of nominal values; the inflation was not taken into account


TABLE OF CONTENTS

1. Introduction ......................................................................................................................... 10

1.1. What is this Report About? ..........................................................................................................10

1.2. Definitions .....................................................................................................................................10

1.3. Summary Methodology .................................................................................................................12

1.4. SDI Terrorism Index ......................................................................................................................13

1.5. About Strategic Defence Intelligence ..........................................................................................13

2. Executive Summary ............................................................................................................ 14

3. Market Attractiveness and Emerging Opportunities ........................................................ 15

3.1. Defense Market Size Historical and Forecast..............................................................................16

3.1.1. Romanian defense expenditure to register a CAGR of XX% over the forecast period ............................ 16

3.1.2. Modernization to meet NATO standards and participation in peacekeeping missions will support

defense expenditure .............................................................................................................................................. 20

3.1.3. Romania’s defense expenditure as a percentage of GDP projected to increase over the forecast period21

3.1.4. Per capita defense expenditure forecast to grow over the forecast period .............................................. 23

3.2. Analysis of Defense Budget Allocation .......................................................................................25

3.2.1. Capital expenditure allocation expected to increase slightly during the forecast period .......................... 25

3.2.2. Romanian defense capital expenditure expected to increase during the forecast period ........................ 27

3.2.3. Romanian revenue expenditure expected to record a CAGR of XX% during the forecast period ........... 31

3.3. Homeland Security Market Size and Forecast ............................................................................35

3.3.1. Homeland security budget projected to grow steadily during the forecast period .................................... 35

3.3.2. Border control measures and Cybercrime to drive homeland security budget ........................................ 39

3.3.3. The nation is at “some risk” of terrorism ................................................................................................... 40

3.3.4. Romania has a terrorism index score of 0.1 ............................................................................................. 41

3.4. Benchmarking with Key Global Markets .....................................................................................42

3.4.1. Romania’s defense budget to increase at a CAGR of XX% during the forecast period .......................... 42

3.4.2. Romanian defense expenditure is expected to remain low compared to other leading spenders ........... 44

3.4.3. The country allocates a lower percentage of GDP towards defense than other NATO members ........... 45

3.5. Market Opportunities: Key Trends and Growth Stimulators ......................................................46

3.5.1. Fighters & Multi-Role Aircraft: ................................................................................................................... 46

3.5.2. Soldier Modernization Systems–C4ISR: .................................................................................................. 47

3.5.3. Cyber Security: ......................................................................................................................................... 48

4. Defense Procurement Market Dynamics ........................................................................... 49

4.1. Import Market Dynamics ...............................................................................................................50

4.1.1. Defense imports registered a decline during 2010–2014 ......................................................................... 50


4.1.2. Romanian defense sourced the majority of its arms from the US ............................................................ 51

4.1.3. Aircraft and Sensors accounted for the majority of arms imports during 2010–2014 .............................. 52

4.2. Export Market Dynamics ..............................................................................................................53

4.2.1. Defense exports anticipated to grow during the forecast period .............................................................. 53

4.2.2. Romania supplies the majority of its defense equipment to the Netherlands .......................................... 54

4.2.3. Ships are the most exported defense goods ............................................................................................ 55

5. Industry Dynamics .............................................................................................................. 56

5.1. Five Forces Analysis.....................................................................................................................56

5.1.1. Bargaining power of Supplier: Low to Medium ......................................................................................... 57

5.1.2. Bargaining power of Buyer: High .............................................................................................................. 57

5.1.3. Barrier to entry: Medium ........................................................................................................................... 57

5.1.4. Intensity of rivalry: Medium to High .......................................................................................................... 57

5.1.5. Threat of Substitution: Medium to high ..................................................................................................... 57

6. Market Entry Strategy ......................................................................................................... 58

6.1. Market Regulation .........................................................................................................................58

6.1.1. Offset policy mandates suppliers invest a minimum of 80% of the contract value into the Romanian

economy ................................................................................................................................................................ 58

6.1.2. Romania allows 100% foreign direct investment in defense sector ......................................................... 59

6.2. Market Entry Route .......................................................................................................................60

6.2.1. Foreign OEMs enter the market through the acquisition of domestic defense companies ...................... 60

6.2.2. EDA promotes defense procurements within the EU ............................................................................... 60

6.3. Key Challenges .............................................................................................................................61

6.3.1. Defense budget cuts impede the growth of the defense industry ............................................................ 61

6.3.2. Rampant corruption and inadequate legal infrastructure ......................................................................... 61

7. Competitive Landscape and Strategic Insights ................................................................ 62

7.1. Competitive Landscape Overview ...............................................................................................62

7.2. Key Domestic Companies ............................................................................................................62

7.2.1. CN Romarm SA: overview ........................................................................................................................ 62

7.2.2. CN Romarm SA: products and services ................................................................................................... 62

7.2.3. CN Romarm SA: recent announcements and strategic initiatives ........................................................... 64

7.2.4. CN Romarm SA: alliances ........................................................................................................................ 64

7.2.5. CN Romarm SA.: recent contract wins ..................................................................................................... 64

7.2.6. S.C. Uzina Mecanica Cugir S.A: overview ............................................................................................... 65

7.2.7. S.C. UZINA MECANICA CUGIR S.A: products and services .................................................................. 65

7.2.8. S.C. Uzina Mecanica Cugir S.A: recent announcements and strategic initiatives ................................... 66

7.2.9. Aerostar S.A: overview ............................................................................................................................. 67

7.2.10. Aerostar S.A.: products and services ....................................................................................................... 67

7.2.11. Aerostar S.A: recent announcements and strategic initiatives ................................................................. 68


7.2.12. Aerostar S.A: alliances ............................................................................................................................. 68

7.2.13. Aerostar S.A: recent contract wins ........................................................................................................... 68

7.2.14. IAR S.A. Brasov: overview........................................................................................................................ 71

7.2.15. IAR S.A. Brasov: products and services ................................................................................................... 71

7.2.16. IAR S.A. Brasov: recent announcements and strategic initiatives ........................................................... 71

7.2.17. IAR S.A. Brasov: recent contract wins ...................................................................................................... 72

7.2.18. Turbomecanica S.A.: overview ................................................................................................................. 73

7.2.19. Turbomecanica S.A: products and services ............................................................................................. 73

7.2.20. Turbomecanica S.A.: recent announcements and strategic initiatives ..................................................... 74

7.2.21. Turbomecanica S.A.: financial analysis .................................................................................................... 74

7.2.22. Electromagnetica SA: overview ................................................................................................................ 76

7.2.23. Electromagnetica SA: products and services ........................................................................................... 76

7.2.24. Electromagnetica SA: recent contracts and strategic initiatives ............................................................... 76

7.2.25. Avioane Craiova S.A: overview ................................................................................................................ 77

7.2.26. Avioane Craiova S.A. (SAIC): products and services .............................................................................. 77

7.2.27. Avioane Craiova S.A: recent contracts and strategic initiatives ............................................................... 77

7.2.28. Avioane Craiova S.A: alliances ................................................................................................................ 78

7.2.29. Avioane Craiova S.A: recent contract wins .............................................................................................. 78

7.2.30. Elprof S.A: overview ................................................................................................................................. 79

7.2.31. Elprof S.A.: products and services ........................................................................................................... 79

7.2.32. Elprof S.A.: recent announcements and strategic initiatives .................................................................... 79

7.2.33. Elprof S.A.: recent contract wins .............................................................................................................. 80

7.3. Domestic Private Companies .......................................................................................................81

7.3.1. IOR S.A: overview .................................................................................................................................... 81

7.3.2. IOR S.A: products and services ............................................................................................................... 81

7.3.3. IOR S.A: recent announcements and strategic initiatives ........................................................................ 82

7.3.4. Simultec S.R.L: overview .......................................................................................................................... 83

7.3.5. Simultec S.R.L: products and services ..................................................................................................... 83

7.3.6. Simultec S.R.L: recent contracts and strategic initiatives ......................................................................... 84

7.3.7. Simultec S.R.L: Recent Contract Wins ..................................................................................................... 84

7.3.8. Intelcan Technosystems, Inc.: overview ................................................................................................... 85

7.3.9. Intelcan Technosystems, Inc.: products and services .............................................................................. 85

7.3.10. Intelcan Technosystems, Inc.: recent announcements and strategic initiatives ....................................... 86

7.3.11. Intelcan Technosystems Inc.: recent contracts ........................................................................................ 86

7.3.12. S.C. Eurocopter Romania SA: overview ................................................................................................... 87

7.3.13. S.C Eurocopter Romania SA: products and services ............................................................................... 87

7.3.14. S.C Eurocopter Romania SA: recent announcements and strategic initiatives ....................................... 88

7.3.15. S.C Eurocopter Romania SA: Recent Contract Wins ............................................................................... 88


8. Business Environment and Country Risk ......................................................................... 89

8.1. Demographics & Social Statistics ................................................................................................89

8.1.1. Total Rural Population .............................................................................................................................. 89

8.1.2. Total Urban Population ............................................................................................................................. 90

8.1.3. Number of Households ............................................................................................................................. 91

8.2. Economic Performance ................................................................................................................92

8.2.1. GDP Per Capita ........................................................................................................................................ 92

8.2.2. GDP, Current Prices ................................................................................................................................. 93

8.2.3. Consumer Price Index .............................................................................................................................. 94

8.2.4. Wholesale Price Index .............................................................................................................................. 95

8.2.5. Local Currency Unit per US$ .................................................................................................................... 96

8.2.6. Lending Rate ............................................................................................................................................ 97

8.2.7. Real Interest Rate ..................................................................................................................................... 98

8.2.8. Market Capitalization of Listed Companies .............................................................................................. 99

8.2.9. Market Capitalization of Listed Companies (% of GDP) ......................................................................... 100

8.2.10. Government Cash Surplus/Deficit .......................................................................................................... 101

8.2.11. Government Cash Surplus/Deficit as % of GDP .................................................................................... 102

8.2.12. Goods exports as % of GDP .................................................................................................................. 103

8.2.13. Goods Trade Surplus/Deficit as % of GDP............................................................................................. 104

8.2.14. Foreign Direct Investment....................................................................................................................... 105

8.2.15. International reserves, including gold ..................................................................................................... 106

8.3. Energy and Utilities ..................................................................................................................... 107

8.3.1. Conventional Thermal Electricity Net Generation .................................................................................. 107

8.3.2. Hydroelectricity Net Generation .............................................................................................................. 108

8.3.3. Nuclear Electricity Net Generation ......................................................................................................... 109

8.3.4. Conventional Thermal Electricity Installed Capacity .............................................................................. 110

8.3.5. Electricity Imports ................................................................................................................................... 111

8.3.6. Electricity Exports ................................................................................................................................... 112

8.3.7. Proved Natural Gas Reserves ................................................................................................................ 113

8.3.8. Petroleum Consumption ......................................................................................................................... 114

8.3.9. Crude Oil Proved Reserves .................................................................................................................... 114

8.4. Infrastructure ............................................................................................................................... 116

8.4.1. Rail Lines ................................................................................................................................................ 116

8.4.2. Air transport, freight ................................................................................................................................ 117

8.4.3. Overall Construction ............................................................................................................................... 118

8.5. Minerals ....................................................................................................................................... 119

8.5.1. Mining, Manufacturing, Utilities Output ................................................................................................... 119

8.6. Technology .................................................................................................................................. 120


8.6.1. Research and Development Expenditure ............................................................................................... 120

8.7. Telecommunication .................................................................................................................... 121

8.7.1. Telephone Lines ..................................................................................................................................... 121

8.7.2. Telephone Lines Penetration Rate ......................................................................................................... 122

9. Appendix ............................................................................................................................ 123

9.1. About SDI ..................................................................................................................................... 123

9.2. Disclaimer .................................................................................................................................... 123

Future of the French Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2020

LIST OF FIGURES

Figure 1: Romanian Defense Expenditure (US$ Billion), 2011–2015 .................................................................................................................. 16 Figure 2: Romanian Defense Expenditure (US$ Billion), 2016–2020 .................................................................................................................. 17 Figure 3: Romanian Defense Expenditure (RON Billion), 2011–2015 ................................................................................................................. 18 Figure 4: Romanian Defense Expenditure (RON Billion), 2016–2020 ................................................................................................................. 19 Figure 5: Romanian GDP Growth vs. Defense Expenditure Growth vs. Defense Expenditure as Percentage of GDP, 2011–2015 ..................... 21 Figure 6: Romanian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP, 2016–2020 .................. 22 Figure 7: Romanian Per Capita Defense Expenditure (US$), 2011–2015 ........................................................................................................... 23 Figure 8: Romanian Per Capita Defense Expenditure (US$), 2016–2020 ........................................................................................................... 24 Figure 9:Romanian Defense Budget Split between Capital and Revenue Expenditure (US$ billion), 2011–2015 ................................................ 25 Figure 10:Romanian Defense Budget Split between Capital and Revenue Expenditure (US$ billion), 2016–2020 .............................................. 26 Figure 11: Romanian Defense Capital Expenditure (US$ million), 2011–2015 ................................................................................................... 27 Figure 12: Romanian Defense Capital Expenditure (US$ million), 2016–2020 ................................................................................................... 28 Figure 13: Romanian Defense Capital Expenditure (RON Million), 2011–2015 .................................................................................................. 29 Figure 14: Romanian Defense Capital Expenditure (RON Million), 2016–2020 .................................................................................................. 30 Figure 15: Romanian Defense Revenue Expenditure (US$ billion), 2011–2015 .................................................................................................. 31 Figure 16: Romanian Defense Revenue Expenditure (US$ billion), 2016–2020 .................................................................................................. 32 Figure 17: Romanian Defense Revenue Expenditure (RON Billion), 2011–2015 ................................................................................................ 33 Figure 18: Romanian Defense Revenue Expenditure (RON Billion), 2016–2020 ................................................................................................ 34 Figure 19: Romanian Homeland Security Expenditure (US$ billion), 2011–2015 ................................................................................................ 35 Figure 20: Romanian Homeland Security Expenditure (US$ billion), 2016–2020 ................................................................................................ 36 Figure 21: Romanian Homeland Security Expenditure (RON Billion), 2011–2015 ............................................................................................... 37 Figure 22: Romanian Homeland Security Expenditure (RON Billion), 2016–2020 ............................................................................................... 38 Figure 23: SDI Terrorism Heat Map, 2015 .......................................................................................................................................................... 40 Figure 24: SDI Terrorism Index, 2015 ................................................................................................................................................................. 41 Figure 25: Benchmarking with World’s Largest and Top Regional Defense Spenders (US$ Billion), 2015 and 2020 .......................................... 43 Figure 26: Defense Expenditure of the World’s Largest Military Spenders (US$ Billion), 2015 and 2020 ............................................................ 44 Figure 27: Defense Expenditure as a Percentage of GDP of Largest Military Spenders (%), 2015 ..................................................................... 45 Figure 28: Fighters & Multi-Role Aircraft Market Size (US$ Million), 2015–2025 ................................................................................................ 46 Figure 29:Soldier Modernization Systems– C4ISR Market Size (US$ Million), 2015–2025 ................................................................................ 47 Figure 30: Cyber Security Market Size (US$ Million), 2015–2025 ....................................................................................................................... 48 Figure 31: Romanian Defense Import Trend (US$ Million), 2010–2014 .............................................................................................................. 50 Figure 32: Romanian Defense Imports by Country (%), 2010–2014 ................................................................................................................... 51 Figure 33: Romanian Defense Imports by Category (%), 2010–2014 ................................................................................................................. 52 Figure 34: Romanian Defense exports (US$ Million), 2010–2014 ....................................................................................................................... 53 Figure 35: Romanian Defense Exports by Country (%), 2010–2014 ................................................................................................................... 54 Figure 36: Romanian Defense Exports by Category (%), 2010–2014 ................................................................................................................. 55 Figure 37: Industry Dynamics – Porter’s Five Forces Analysis ............................................................................................................................ 56 Figure 38: Aerostar – Revenue Trend Analysis (US$ million), 2009–2013 .......................................................................................................... 69 Figure 39: Aerostar – Operating Profit Trend Analysis (US$ million), 2009–2013 ............................................................................................... 69 Figure 40: Aerostar – Net Profit Trend Analysis (US$ million), 2009–2013 ......................................................................................................... 70 Figure 41:Turbomecanica S.A.: Revenue Trend Analysis (US$ million), 2009–2013 .......................................................................................... 74 Figure 42: Turbomecanica S.A.: Operating Profit/Loss Trend Analysis (US$ million), 2009–2013 ...................................................................... 75 Figure 43: Romanian Rural Population (In Millions), 2015–2024 ......................................................................................................................... 89 Figure 44: Romanian Urban Population (In Millions), 2015–2024 ....................................................................................................................... 90 Figure 45: Number of Households, 2008–2017 ................................................................................................................................................... 91 Figure 46: Romanian GDP Per Capita, 2015–2024 ............................................................................................................................................ 92 Figure 47: Romanian GDP, Current Prices (US$ Billion), 2015–2024 ................................................................................................................. 93 Figure 48: Romanian Consumer Price Index, 2015–2024 ................................................................................................................................... 94 Figure 49: Romanian Wholesale Price Index, 2004–2013 ................................................................................................................................... 95 Figure 50: Local Currency per US$, 2015–2024 ................................................................................................................................................. 96 Figure 51: Lending Rate, 2002–2011 .................................................................................................................................................................. 97 Figure 52: Real Interest Rate, 2004–2013 .......................................................................................................................................................... 98 Figure 53: Romanian Market Capitalization of Listed Companies (US$ Billion), 2004–2013 ............................................................................... 99 Figure 54: Romanian Market Capitalization of Listed Companies (% of GDP), 2004–2013 ................................................................................100 Figure 55: Romanian Government Cash Surplus/Deficit (LCU Billion), 2004–2012 ............................................................................................101


Figure 56: Romanian Government Cash Surplus/Deficit as % of GDP, 2002–2011 ...........................................................................................102 Figure 57: Romanian Goods Exports as % of GDP, 2004–2013 ........................................................................................................................103 Figure 58: Romanian Goods Trade Surplus/Deficit as % of GDP, 2004–2013 ...................................................................................................104 Figure 59: Romanian Foreign Direct Investment (US$ Billion), 2004–2013 ........................................................................................................105 Figure 60: Romanian International reserves, including gold (US$ Billion), 2004–2013 .......................................................................................106 Figure 61: Romanian Conventional Thermal Electricity Net Generation (Billion Kilowatt hours), 2003–2012 ......................................................107 Figure 62: Romanian Hydroelectricity Net Generation (Billion Kilowatt hours), 2003–2012 ................................................................................108 Figure 63: Romanian Nuclear Electricity Net Generation (Billion Kilowatt hours), 2003–2012 ............................................................................109 Figure 64: Romanian Conventional Thermal Electricity Installed Capacity (Million Kilowatts), 2001–2010 ......................................................110 Figure 65: Romanian Electricity Imports (Billion Kilowatt hours), 2002–2011 .....................................................................................................111 Figure 66: Romanian Electricity Exports (Billion Kilowatt hours), 2003–2012 .....................................................................................................112 Figure 67: Romanian Proved Natural Gas Reserves (Trillion Cubic Feet), 2004–2013 ......................................................................................113 Figure 68: Romanian Petroleum Consumption (Thousand Barrels Per Day), 2004–2013 ..................................................................................114 Figure 69: Romanian Crude Oil Proved Reserves (Billion Barrels), 2004–2013 .................................................................................................115 Figure 70: Romanian Rail Lines (kms), 2003–2012 ...........................................................................................................................................116 Figure 71: Romanian Air transport freight (million ton-km), 2003–2012 ..............................................................................................................117 Figure 72: Romanian Overall Construction (US$ Billion), 2009–2018 ................................................................................................................118 Figure 73: Romanian Mining, Manufacturing, Utilities Output (US$ Billion), 2004–2013 .....................................................................................119 Figure 74: Romanian Research and Development Expenditure, 2001–2010 .....................................................................................................120 Figure 75: Romanian Telephone Lines (In Million), 2003–2012 .........................................................................................................................121 Figure 76: Romanian Telephone Lines Penetration Rate (Per 100 People), 2003–2012 ....................................................................................122


LIST OF TABLES Table 1: Romanian Defense Expenditure (US$ Billion), 2011–2015 ................................................................................................................... 16 Table 2: Romanian Defense Expenditure(US$ Billion), 2016–2020 .................................................................................................................... 17 Table 3: Romanian Defense Expenditure (RON Billion), 2011–2015 .................................................................................................................. 18 Table 4: Romanian Defense Expenditure(RON Billion), 2016–2020 ................................................................................................................... 19 Table 5: Romanian GDP Growth vs. Defense Expenditure Growth vs. Defense Expenditure as Percentage of GDP, 2011–2015 ...................... 21 Table 6: Romanian GDP Growth vs. Defense Expenditure Growth and Defense Expenditure as Percentage of GDP Growth, 2016–2020 ........ 22 Table 7: Romanian Per Capita Defense Expenditure (US$), 2011–2015 ............................................................................................................ 23 Table 8: Romanian Per Capita Defense Expenditure (US$), 2016–2020 ............................................................................................................ 24 Table 9: Romanian Defense Budget Split between Capital and Revenue Expenditure (US$ billion) 2011–2015 ................................................ 25 Table 10: Romanian Defense Budget Split between Capital and Revenue Expenditure (US$ billion), 2016–2020 .............................................. 26 Table 11: Romanian Defense Capital Expenditure (US$ million), 2011–2015 ..................................................................................................... 27 Table 12: Romanian Defense Capital Expenditure (US$ million), 2016–2020 ..................................................................................................... 28 Table 13: Romanian Defense Capital Expenditure (RON Million), 2011–2015 .................................................................................................... 29 Table 14: Romanian Defense Capital Expenditure (RON Million), 2016–2020 .................................................................................................... 30 Table 15: Romanian Defense Revenue Expenditure (US$ billion), 2011–2015 ................................................................................................... 31 Table 16: Romanian Defense Revenue Expenditure (US$ billion), 2016–2020 ................................................................................................... 32 Table 17: Romanian Defense Revenue Expenditure (RON Billion), 2011–2015 ................................................................................................. 33 Table 18: Romanian Defense Revenue Expenditure (RON Billion), 2016–2020 ................................................................................................. 34 Table 19: Romanian Homeland Security Expenditure (US$ billion), 2011–2015 ................................................................................................. 35 Table 20: Romanian Homeland Security Expenditure (US$ billion), 2016–2020 ................................................................................................. 36 Table 21: Romanian Homeland Security Expenditure (RON Billion), 2011–2015 ................................................................................................ 37 Table 22: Romanian Homeland Security Expenditure (RON Billion), 2016–2020 ................................................................................................ 38 Table 23: Benchmarking with World’s Largest and Top Regional Defense Spenders (US$ Billion), 2015 and 2020 ................................. 42 Table 24: Offset Regulations in Romania............................................................................................................................................................ 59 Table 25: CN Romarm SA– Product Focus ........................................................................................................................................................ 62 Table 26: CN Romarm SA – Alliances ................................................................................................................................................................ 64 Table 27: CN Romarm SA. – Recent Contract Wins ........................................................................................................................................... 64 Table 28: S.C. UZINA MECANICA CUGIR S.A – Product Focus ........................................................................................................................ 65 Table 29: Aerostar S.A – product focus .............................................................................................................................................................. 67 Table 30: Aerostar S.A– Alliances ...................................................................................................................................................................... 68 Table 31: Aerostar– Recent Contract Wins ......................................................................................................................................................... 68 Table 32: IAR S.A. Brasov – product focus ......................................................................................................................................................... 71 Table 33: IAR S.A. Brasov– Recent Contract Wins ............................................................................................................................................. 72 Table 34: Turbomecanica S.A – Product Focus .................................................................................................................................................. 73 Table 35: Electromagnetica SA– Product Focus ................................................................................................................................................. 76 Table 36: Avioane Craiova S.A – Product Focus ................................................................................................................................................ 77 Table 37: Avioane Craiova S.A– Alliances .......................................................................................................................................................... 78 Table 38: Avioane Craiova S.A– Recent Contract Wins ...................................................................................................................................... 78 Table 39: Elprof S.A. – product focus ................................................................................................................................................................. 79 Table 40: Avioane Craiova S.A– Recent Contract Wins ...................................................................................................................................... 80 Table 41: IOR S.A – Product Focus .................................................................................................................................................................... 81 Table 42: Simultec S.R.L – Product Focus ......................................................................................................................................................... 83 Table 43: Simultec S.R.L– Recent Contract Wins ............................................................................................................................................... 84 Table 44: Intelcan Technosystems, Inc. – Product Focus ................................................................................................................................... 85 Table 45: Intelcan Technosystems, Inc. – Alliances ............................................................................................................................................ 86 Table 46: S.C Eurocopter Romania SA – Product Focus .................................................................................................................................... 87 Table 47: S.C Eurocopter Romania– Recent Contracts ...................................................................................................................................... 88

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