1 Introduction

1.1 What is this Report About?
1.2 Definitions
1.3 Summary Methodology
1.4 ICD Research Terrorism Index
1.5 About ICD Research
1.6 About Strategic Defense

2 Executive Summary

3 Market Attractiveness and Emerging Opportunities

3.1 Defense Market Size Historical and Forecast
3.1.1 Malaysian defense expenditure expected to record a CAGR of XX% over the forecast period
3.1.2 Defense expenditure driven by an unstable location, competitive arms acquisitions, the strained relationship with Indonesia, peacekeeping missions and historically low levels of expenditure

3.2 Analysis of Defense Budget Allocation
3.2.1 Share of capital expenditure expected to marginally decrease over the forecast period
3.2.2 Defense expenditure correlated to Malaysian economic growth

3.3 Homeland Security Market Size and Forecast
3.3.1 The country's homeland security expenditure is expected to record a CAGR of XX% over the forecast period
3.3.2 Homeland security expenditure expected to be driven by religious tensions and increasing criminal activity

3.4 Benchmarking with Key Global Markets
3.4.1 Malaysian defense expenditure expected to remain low in comparison with world's leading military spenders
3.4.2 On a global scale, Malaysian defense expenditure is comparatively low
3.4.3 Malaysia ranked fourteenth among the largest arms importing countries during the review period
3.4.4 Military expenditure as a percentage of GDP expected to decline as a result of budget deficit reduction efforts
3.4.5 Malaysia faces moderate terror threat

3.5 Market Opportunities: Key Trends and Drivers
3.5.1 Demand for maritime defense equipment expected to increase
3.5.2 Air defense systems expected to experience considerable increase in demand
3.5.3 Demand for armored vehicles expected to increase
3.5.4 Demand is expected to increase for technology that caters to border security

4 Defense Procurement Market Dynamics

4.1 Import Market Dynamics
4.1.1 Lack of domestic defense capabilities expected to drive imports
4.1.2 Defense imports recorded robust growth during the last three years
4.1.3 Ships and aircrafts constitute the majority of Malaysia's defense imports

4.2 Export Market Dynamics
4.2.1 Malaysia has limited export capabilities

5 Industry Dynamics

5.1 Five Forces Analysis
5.1.1 Bargaining power of supplier: low to high
5.1.2 Bargaining power of buyer: high to low
5.1.3 Barrier to entry: medium
5.1.4 Intensity of rivalry: medium to high
5.1.5 Threat of substitution: high

6 Market Entry Strategy

6.1 Market Regulation
6.1.1 Malaysian Government encourages offsets to develop the domestic defense industry

6.2 Market Entry Route
6.2.1 Partnerships with domestic defense firms or the establishment of a wholly-owned subsidiary constitute preferred entry routes
6.2.2 Defense exhibitions provide straightforward entry route for foreign OEMs

6.3 Key Challenges
6.3.1 Limited defense budget discourages investors from market entry
6.3.2 Corruption and lack of transparency deter defense industry growth
6.3.3 Project delays restrict investors
6.3.4 Mandated use of local representatives limits the growth of the domestic defense industry

7 Competitive Landscape and Strategic Insights

7.1 Competitive Landscape Overview

7.2 Key Foreign Companies
7.2.1 Agusta Westland Malaysia Sdn Bhd: overview
7.2.2 Agusta Westland Malaysia Sdn Bhd: products and services
7.2.3 Agusta Westland Malaysia Sdn Bhd: recent announcements and strategic initiatives
7.2.4 Agusta Westland Malaysia Sdn Bhd: alliances
7.2.5 Agusta Westland Malaysia Sdn Bhd: recent contract wins
7.2.6 Agusta Westland Malaysia Sdn Bhd: financial analysis

7.3 Key Public Sector Companies
7.3.1 SME Ordnance Sdn Bhd: overview
7.3.2 SME Ordnance Sdn Bhd: products and services
7.3.3 SME Ordnance Sdn Bhd: recent announcements and strategic initiatives
7.3.4 SME Ordnance Sdn Bhd: alliances
7.3.5 SME Ordnance Sdn Bhd: recent contract wins
7.3.6 SME Ordnance Sdn Bhd: financial analysis
7.3.7 SME Aerospace Sdn Bhd: overview
7.3.8 SME Aerospace Sdn Bhd: products and services
7.3.9 SME Aerospace Sdn Bhd: recent announcements and strategic initiatives
7.3.10 SME Aerospace Sdn Bhd: alliances
7.3.11 SME Aerospace Sdn Bhd: recent contract wins
7.3.12 SME Aerospace Sdn Bhd: financial analysis
7.3.13 AIROD Sdn Bhd: overview
7.3.14 AIROD Sdn Bhd: products and services
7.3.15 AIROD Sdn Bhd: recent announcements and strategic initiatives
7.3.16 AIROD Sdn Bhd: alliances
7.3.17 AIROD Sdn Bhd: recent contract wins
7.3.18 AIROD Sdn Bhd: financial analysis

7.4 Key Private Sector Companies
7.4.1 Boustead Naval Shipyard: overview
7.4.2 Boustead Naval Shipyard: products and services
7.4.3 Boustead Naval Shipyard: recent announcements and strategic initiatives
7.4.4 Boustead Naval Shipyard: alliances
7.4.5 Boustead Naval Shipyard: recent contract wins
7.4.6 Boustead Naval Shipyard: financial analysis
7.4.7 Zetro Aerospace Corporation Sdn Bhd: overview
7.4.8 Zetro Aerospace Corporation Sdn Bhd: products and services
7.4.9 Zetro Aerospace Corporation Sdn Bhd: recent announcements and strategic initiatives
7.4.10 Zetro Aerospace Corporation Sdn Bhd: alliances
7.4.11 Zetro Aerospace Corporation Sdn Bhd: recent contract wins
7.4.12 Zetro Aerospace Corporation Sdn Bhd: financial analysis
7.4.13 Sapura Thales Electronics Sdn Bhd: overview
7.4.14 Sapura Thales Electronics Sdn Bhd: products and services
7.4.15 Sapura Thales Electronics Sdn Bhd: recent announcements and strategic initiatives
7.4.16 Sapura Thales Electronics Sdn Bhd: alliances
7.4.17 Sapura Thales Electronics Sdn Bhd: recent contract wins
7.4.18 Sapura Thales Electronics Sdn Bhd: financial analysis
7.4.19 DRB Hicom Defence Technologies Sdn Bhd: overview
7.4.20 DRB Hicom Defence Technologies Sdn Bhd: products and services
7.4.21 DRB Hicom Defence Technologies Sdn Bhd: recent announcements and strategic initiatives
7.4.22 DRB Hicom Defence Technologies Sdn Bhd: alliances
7.4.23 DRB Hicom Defence Technologies Sdn Bhd: recent contract wins
7.4.24 DRB Hicom Defence Technologies Sdn Bhd: financial analysis
7.4.25 MMC Defence Sdn Bhd: overview
7.4.26 MMC Defence Sdn Bhd: products and services
7.4.27 MMC Defence Sdn Bhd: recent announcements and strategic initiatives
7.4.28 MMC Defence Sdn Bhd: alliances
7.4.29 MMC Defence Sdn Bhd: recent contract wins
7.4.30 MMC Defence Sdn Bhd: financial analysis
7.4.31 Composite Technology Research Malaysia Sdn Bhd: overview
7.4.32 Composite Technology Research Malaysia Sdn Bhd: products and services
7.4.33 Composite Technology Research Malaysia Sdn Bhd: recent announcements and strategic initiatives
7.4.34 Composite Technology Research Malaysia Sdn Bhd: alliances
7.4.35 Composite Technology Research Malaysia Sdn Bhd: recent contract wins
7.4.36 Composite Technology Research Malaysia Sdn Bhd: financial analysis
7.4.37 Labuan Shipyard & Engineering Sdn Bhd: overview
7.4.38 Labuan Shipyard & Engineering Sdn Bhd: products and services
7.4.39 Labuan Shipyard & Engineering Sdn Bhd: recent announcements and strategic initiatives
7.4.40 Labuan Shipyard & Engineering Sdn Bhd: alliances
7.4.41 Labuan Shipyard & Engineering Sdn Bhd: recent contract wins
7.4.42 Labuan Shipyard & Engineering Sdn Bhd: financial analysis
7.4.43 D' Aquarian Sdn Bhd: overview
7.4.44 D'Aquarian Sdn Bhd: products and services
7.4.45 D'Aquarian Sdn Bhd: recent announcements and strategic initiatives
7.4.46 D'Aquarian Sdn Bhd: alliances
7.4.47 D'Aquarian Sdn Bhd: recent contract wins
7.4.48 D'Aquarian Sdn Bhd: financial analysis

8 Business Environment and Country Risk

8.1 Business confidence
8.1.1 Business confidence index
8.1.2 Market capitalization trend – The Bursa Malaysia Stock Exchange, Malaysia
8.1.3 FDI inflows
8.1.4 Deployment of credit by sector

8.2 Economic Performance
8.2.1 GDP at constant prices
8.2.2 GDP per capita at constant prices
8.2.3 GDP at current prices
8.2.4 GDP per capita at current prices
8.2.5 GDP split by key segments
8.2.6 Agriculture net output at current prices (Malaysian ringgit)
8.2.7 Agriculture net output at current prices (US dollar)
8.2.8 Agriculture net output at current prices as percentage of GDP
8.2.9 Manufacturing net output at current prices (Malaysian ringgit)
8.2.10 Manufacturing net output at current prices (US dollar)
8.2.11 Manufacturing net output at current prices as a percentage of GDP
8.2.12 Mining, manufacturing, and utilities net output at current prices (Malaysian ringgit)
8.2.13 Mining, manufacturing, utilities at current prices (US dollars)
8.2.14 Mining, manufacturing, utilities at current prices, as percentage of GDP
8.2.15 Construction net output at current prices, (Malaysian ringgit)
8.2.16 Construction net output at current prices (US dollar)
8.2.17 Construction output at current prices as a percentage of GDP
8.2.18 Crude steel production
8.2.19 Crude oil consumption
8.2.20 Inflation rate
8.2.21 Fiscal balance as a percentage of GDP
8.2.22 Trade balance as a percentage of GDP
8.2.23 Exports as a percentage of GDP
8.2.24 Imports as a percentage of GDP
8.2.25 Exports growth
8.2.26 Imports growth
8.2.27 External debt as percentage of GDP
8.2.28 Annual average exchange rate US$–MYR
8.2.29 End of the period exchange rate US$ – MYR
8.2.30 Debt service ratio

8.3 Infrastructure Quality and Availability
8.3.1 Total airports and ports
8.3.2 Railways and highways
8.3.3 Passenger vehicle production volume
8.3.4 Commercial vehicle production volume
8.3.5 Automotive components export trend
8.3.6 Automotive components import trend
8.3.7 Passenger car penetration
8.3.8 Total installed capacity for electricity generation
8.3.9 Installed capacity for the generation of conventional thermal electricity
8.3.10 Electricity production
8.3.11 Installed capacity for the generation of hydro-electricity
8.3.12 Installed capacity for renewable electricity generation
8.3.13 Electricity consumption
8.3.14 Electricity exports
8.3.15 Healthcare expenditure
8.3.16 Healthcare expenditure as a percentage of GDP
8.3.17 Healthcare expenditure per capita
8.3.18 Research and development expenditure as a percentage of GDP
8.3.19 Total internet subscribers
8.3.20 Broadband internet subscribers
8.3.21 Personal computer penetration
8.3.22 Mobile phone penetration rate

8.4 Labor Force
8.4.1 Labor force
8.4.2 Unemployment rate

8.5 Demographics
8.5.1 Annual disposable income
8.5.2 Annual per capita disposable income
8.5.3 Annual consumer expenditure on food
8.5.4 Annual per capita consumer expenditure on food
8.5.5 Urban and rural population
8.5.6 Female percentage of population
8.5.7 Male percentage of population
8.5.8 Mean age of population
8.5.9 Median age of population
8.5.10 Population density
8.5.11 Age distribution – total population
8.5.12 Age distribution-male population
8.5.13 Age distribution – female population
8.5.14 Number of households
8.6 Political and Social Risk

8.6.1 Political stability
8.6.2 Terrorism index
8.6.3 Transparency index

9 Appendix

9.1 Contact Us
9.2 About ICD Research
9.3 Disclaimer

List of Tables

Table 1: Malaysian Defense Expenditure (US$ billion), 2007–2011
Table 2: Malaysian Defense Expenditure (US$ billion), 2012–2016
Table 3: Malaysian Defense Budget Split Between Capital and Revenue Expenditure, 2007–2011
Table 4: Malaysian Defense Budget Split Between Capital and Revenue Expenditure, 2012–2016
Table 5: Malaysian Defense Expenditure vs GDP Growth Rate (%), 2007–2011
Table 6: Malaysian Defense Expenditure vs GDP Growth Rate (%), 2012–2016
Table 7: Malaysian Defense Expenditure as Percentage of GDP, 2007–2011
Table 8: Malaysian Defense Expenditure as Percentage of GDP, 2012–2016
Table 9: Malaysia's Homeland Security Expenditure (US$ billion), 2007–2011
Table 10: Malaysia's Homeland Security Expenditure (US$ billion), 2012–2016
Table 11: Benchmarking with Key Markets – 2007–2011 vs 2012–2016
Table 12: Top Country Ranking by Value of Arms Imports, 2007–2011*
Table 13: ICD Research Terrorism Index
Table 14: Malaysian Defense Offset Regulations
Table 15: Market Entry by Key Foreign Companies
Table 16: Malaysian Defense Industry Capability
Table 17: Agusta Westland Malaysia Sdn Bhd – Product Focus
Table 18: Agusta Westland Malaysia Sdn Bhd – Alliances
Table 19: Agusta Westland Malaysia Sdn Bhd – Recent Contract Wins
Table 20: SME Ordnance Sdn Bhd – Product Focus
Table 21: SME Ordnance Sdn Bhd – Alliances
Table 22: SME Ordnance Sdn Bhd – Recent Contract Wins
Table 23: SME Aerospace Sdn Bhd – Product Focus
Table 24: SME Aerospace Sdn Bhd – Recent Contract Wins
Table 25: AIROD Sdn Bhd – Product Focus
Table 26: AIROD Sdn Bhd – Alliances
Table 27: AIROD Sdn Bhd – Recent Contract Wins
Table 28: Boustead Naval Shipyard – Product Focus
Table 29: Boustead Naval Shipyard – Recent Contract Wins
Table 30: Zetro Aerospace Corporation Sdn Bhd – Product Focus
Table 31: Zetro Aerospace Corporation Sdn Bhd – Alliances
Table 32: Sapura Thales Electronics Sdn Bhd – Product Focus
Table 33: Sapura Thales Electronics Sdn Bhd – Alliances
Table 34: Sapura Thales Electronics Sdn Bhd – Recent Contract Wins
Table 35: DRB Hicom Defence Technologies Sdn Bhd – Product Focus
Table 36: DRB Hicom Defence Technologies Sdn Bhd – Alliances
Table 37: DRB Hicom Defence Technologies Sdn Bhd – Recent Contract Wins
Table 38: MMC Defence Sdn Bhd – Product Focus
Table 39: MMC Defence Sdn Bhd – Alliances
Table 40: Composite Technology Research Malaysia Sdn Bhd – Product Focus
Table 41: Composite Technology Research Malaysia Sdn Bhd – Alliances
Table 42: Composite Technology Research Malaysia Sdn Bhd – Recent Contract Wins
Table 43: Labuan Shipyard & Engineering Sdn Bhd – Product Focus
Table 44: Labuan Shipyard & Engineering Sdn Bhd – Alliances
Table 45: Labuan Shipyard & Engineering Sdn Bhd – Recent Contract Wins
Table 46: D'Aquarian Sdn Bhd – Product Focus
Table 47: D'Aquarian Sdn Bhd – Recent Contract Wins

List of Figures

Figure 1: Malaysian Defense Expenditure (US$ billion), 2007–2011
Figure 2: Malaysian Defense Expenditure (US$ billion), 2012–2016
Figure 3: Malaysian Defense Budget Split Between Capital and Revenue Expenditure, 2007–2011
Figure 4: Malaysian Defense Budget Split Between Capital and Revenue Expenditure, 2012–2016
Figure 5: Malaysian Defense Expenditure vs GDP Growth Rate (%), 2007–2011
Figure 6: Malaysian Defense Expenditure vs GDP Growth Rate (%), 2012–2016
Figure 7: Malaysian Defense Expenditure as Percentage of GDP, 2007–2011
Figure 8: Malaysian Defense Expenditure as Percentage of GDP, 2012–2016
Figure 9: Malaysia's Homeland Security Expenditure (US$ billion), 2007–2011
Figure 10: Malaysia's Homeland Security Expenditure (US$ billion), 2012–2016
Figure 11: ICD Research Terrorism Heat Map
Figure 12: ICD Research Terrorism Heat Index, 2011
Figure 13: Benchmarking with Key Markets – 2007–2011 vs 2012–2016
Figure 14: Benchmarking with World's Largest Defense Spenders – 2011 and 2016
Figure 15: Benchmarking with Large Defense Spenders as Percentage of GDP – 2011
Figure 16: Malaysia Defense Imports (US$ Million), 2005–2010
Figure 17: Malaysian Defense Imports by Supplier and Weapon Category (%), 2005–2010
Figure 18: Industry Dynamics – Porter's Five Forces Analysis
Figure 19: Malaysian Business Confidence Index, 2008–2010
Figure 20:The Bursa Malaysia Stock Exchange (MYX) Market Capitalization (US$ Billion), 2003–2009
Figure 21: Malaysian FDI Inflows (US$ Billion), 2003–2008
Figure 22: Malaysia Deployment of Credit by Sector (US$ Billion), 2003–2009
Figure 23: Malaysian GDP Value at Constant Prices (US$ Billion), 2003–2015
Figure 24: Malaysian GDP Per Capita at Constant Prices (US$), 2003–2015
Figure 25: Malaysian GDP at Current Prices (US$ Billion), 2003–2015
Figure 26: Malaysian GDP Per Capita at Current Prices (US$), 2003–2015
Figure 27: Malaysian GDP Split by Key Segments (%), 2003 vs 2009
Figure 28: Malaysian Agriculture Net Output at Current Prices (MYR Billion), 2003–2015
Figure 29: Malaysian Agriculture Net Output at Current Prices (US$ Billion), 2003–2015
Figure 30: Malaysian Agriculture Net Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 31: Malaysian Manufacturing Net Output at Current Prices (MYR Billion), 2003–2015
Figure 32: Malaysian Manufacturing Net Output at Current Prices (US$ Billion), 2003–2015
Figure 33: Malaysian Manufacturing Net Output at Current Prices as a Percentage of GDP (%) 2003–2015
Figure 34: Malaysian Mining, Manufacturing and Utilities Net Output at Current Prices (MYR Billion), 2003–2015
Figure 35: Malaysian Mining, Manufacturing and Utilities Output at Current Prices (US$ Billion), 2003–2015
Figure 36: Malaysian Mining, Manufacturing and Utilities Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 37: Malaysian Construction Net Output at Current Prices (MYR Billion), 2003–2015
Figure 38: Malaysian Construction Net Output at Current Prices (US$ Billion), 2003–2015
Figure 39: Malaysian Construction Output at Current Prices as a Percentage of GDP (%), 2003–2015
Figure 40: Malaysian Crude Steel Production (Million Metric Tons), 2003–2015
Figure 41: Malaysian Crude Oil Consumption (Million Tons), 2003–2015
Figure 42: Malaysian Inflation Rate (%), 2003–2015
Figure 43: Malaysian Fiscal Balance as a Percentage of GDP(%), 2003–2015
Figure 44: Malaysian Trade Balance as a Percentage of GDP (%), 2003–2009
Figure 45: Malaysian Exports as a Percentage of GDP (%), 2003–2015
Figure 46: Malaysian Imports as a Percentage of GDP (%), 2003–2015
Figure 47: Malaysian Exports Growth (%), 2003–2015
Figure 48: Malaysian Imports Growth (%), 2003–2015
Figure 49: Malaysian External Debt as a Percentage of GDP (%) 2003–2009
Figure 50: Malaysia Annual Average Exchange Rate US$–MYR , 2003–2009
Figure 51: Malaysian End of the Period Exchange Rate (End of the Period), 2003–2009
Figure 52: Malaysian Debt Service Ratio (%), 2003–2009
Figure 53: Malaysian Airports and Ports (Number of), 2009
Figure 54: Malaysian Railways and Highways (Thousand Kilometers), 2009
Figure 55: Malaysian Passenger Vehicle Production, 2003–2015
Figure 56: Malaysian Commercial Vehicle Production, 2003–2015
Figure 57: Malaysian Automotive Components Exports (US$ Million), 2003–2015
Figure 58: Malaysian Automotive Components Imports (US$ Million), 2003–2015
Figure 59: Malaysian Passenger Car Penetration (per 1,000 people), 2003–2015
Figure 60: Malaysian Total Installed Capacity for Electricity Generation (Million KW), 2003–2015
Figure 61: Malaysian Installed Capacity for the Generation of Conventional Thermal Electricity (Million KW), 2003–2015
Figure 62: Malaysian Electricity Production (Billion kwh), 2003–2015
Figure 63: Malaysian Installed Capacity for the Generation of Hydro-Electricity (Million KW), 2003–2015
Figure 64: Malaysian Installed Capacity for Generation of Renewable Electricity (Million KW), 2003–2015
Figure 65: Malaysian Electricity Consumption, 2003–2015
Figure 66: Malaysian Electricity Exports (Billion kwh), 2003–2015
Figure 67: Malaysian Healthcare Expenditure (US$ Billion), 2003–2015
Figure 68: Malaysian Healthcare Expenditure as a Percentage of GDP (%), 2003–2015
Figure 69: Malaysian Per Capita Healthcare Expenditure (US$), 2003–2015
Figure 70: Malaysian R&D Expenditure as a Percentage of GDP(%), 2003–2015
Figure 71: Malaysian Internet Subscriptions (Million), 2003–2015
Figure 72: Malaysian Broadband Internet Subscriptions (Million), 2003–2015
Figure 73: Malaysian Personal Computer Usage (per 100 people), 2003–2015
Figure 74: Malaysian Mobile Phone Penetration, 2003–2015
Figure 75: Malaysian Size of Labor Force (in 15–59 age group) (Million), 2003–2015
Figure 76: Malaysian Unemployment Rate (%), 2003–2015
Figure 77: Malaysian Annual Disposable Income (US$ Billion), 2003–2015
Figure 78: Malaysian Annual Per Capita Disposable Income (US$), 2003–2015
Figure 79: Malaysian Consumer Expenditure on Food (US$ Billion), 2003–2015
Figure 80: Malaysian Annual Per Capita Consumer Expenditure on Food (US$), 2003–2015
Figure 81: Malaysian Urban and Rural Population (%), 2003–2015
Figure 82: Malaysian Female Percentage of Population (%), 2003–2015
Figure 83: Malaysian Male Percentage of Population (%), 2003–2015
Figure 84: Malaysian Mean Age of Population (Years), 2003–2015
Figure 85: Malaysian Median Age of Population (years), 2003–2015
Figure 86: Malaysian Population Density (Per Square Kilometer), 2003–2015
Figure 87: Malaysian Population Distribution by Age (%), 2003–2015
Figure 88: Malaysian Male Population Distribution by Age (%), 2003–2015
Figure 89: Malaysia Female Population Distribution by Age (%), 2003–2015
Figure 90: Malaysian Number of Households (Million), 2003–2015
Figure 91: Global Terrorism Heat Map
Figure 92: Malaysia Transparency Index, 2003–2009