Asian Defense M arkets Implications for the Global Aerospace and - - PowerPoint PPT Presentation

PRIVATE & CONFIDENTIAL PRIVATE & CONFIDENTIAL

Implications for the Global Aerospace and Defense Industry

Asian Defense M arkets

February 5, 2014 February 5, 2014

Prepared for:

Participants of Avascent’s Asian Defense Markets Webinar

PRIVATE & CONFIDENTIAL | AVASCENT | 2

Panel Participants

Wallace “Chip” Gregson

Senior Advisor, Avascent International

• Assistant Secretary of Defense, Asian and Pacific

Security Affairs

• Lieutenant General, US M arine Corps (Ret.)

– Commanding General, M arine Corps Forces, Pacific, and M arine Corps, Central Command – Commanding General, M arine Corps Forces, Japan

Stephen Ganyard,

President, Avascent International

• Deputy Assistant Secretary of State, Plans,

Programs and Operations, Pol-M il Affairs

• Colonel, US M arine Corps (Ret)

– M ilitary Assistant, Deputy Secretary of Defense – F/ A-18 Hornet Pilot – Commanding Officer, Squadron and Air Group level

J

• n Barney

M anaging Director, Avascent

• Fifteen years of experience in strategy in the

global A&D sector

• Focus on Avascent’s Global Expansion and

M &A efforts

• Former Naval Officer, NATO Fellow; M BA

Harvard, B.S. Honors Naval Academy

Aleksandar D. J

• vovic

Senior Associate, Avascent

• Twelve years of professional experience in the

A&D sector and consulting

• Expertise in defense systems, global markets,

and international political risk

• Government and private sector advisory

experience; positions at Brookings and Georgetown University, M .A. SAIS-JHU

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Avascent is uniquely able to address client challenges from a range of perspectives

Senior Advisory Services Senior Advisory Services Strategy & M anagement Consulting Strategy & M anagement Consulting Data Analytic Services Data Analytic Services

• Growth-oriented management

consulting

• M ixing deep market expertise

with rigorous analytical methods and client service commitment

• Combines sector-specific

expertise with traditional management consulting capabilities

• Offers the insight of a

senior-level strategic advisory supported by Avascent’s core analytical capabilities

• Leverages decades of

experience at the highest levels of government, business, intelligence and international affairs

• Database provides detailed

database of global defense markets

• Visibility into market size,

segmentation, forecasted growth, competitor market share, and opportunity space

• Scope spans 46 countries

worldwide

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Avascent has developed a unique understanding of economics, policy, and global business over two decades of corporate experience bolstered by a broad network of senior advisors

Select Senior Leaders Basic Information

• 90+ full-time professional staff augmented by advisory network
• Over 50% hold Masters and PhD degrees
• Over 40 senior advisors based worldwide
• Headquarters:
• 1615 L Street, NW, Washington, DC
• European Office:
• 59, rue des Petits Champs, Paris

Avascent Global Coverage: Selection of Recent Projects Firm History

• Founded 1984 as DFI International—a research consulting firm serving

government and corporate sectors

• DFI Corporate Services spins out as Avascent (2007)
• Avascent doubles in size within four years of independent operation,

while maintaining a lean, analytic, client-focused approach

• Its sister organization, DFI Government Services, acquired by leading

UK defense firms: Detica (2007), then BAE Systems (2008)

• Avascent

‒ Steve Irwin, PhD., President

Avascent, USG and Stimson Center, Washington DC

• International Advisory Network

‒ Steve Ganyard, Fmr. Deputy

Assistant Secretary of State and Marine Corps F/ A-18 Squadron Commander

‒ Ambassador Eric S.

Edelman, Fmr. Under Secretary

• f Defense for Policy

‒ Lt Gen. Wallace “Chip” Gregson

(USMC, Ret.), Asst. Sec. of Defense, Asia-Pacific Security

Setting the Scene for Singapore

Dak Hardwick

• Director, International Affairs

Aerospace Industries Association

• Former Country Director, Office of the

Under Secretary of Defense (Policy)

• Former Legislative Director & Military

Legislative Assistant, U.S. House of Representatives

• International Government Relations,

Harris Corporation

• Robust U.S. Government presence
• DoD, State, Commerce, FAA all attending
• Both civil and defense/ security-related

agencies focusing on the region

• Significant pre-show coordination among

USG participants

• Recognition of the value of “ Team US

A” representation with foreign partners

• Strong, on-the-ground advocacy push from

Commerce to USG attendees

• AIA will be available for

questions/ assistance

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A sophisticated appreciation of Asia’s complex defense sector opens up opportunities in excess of $110B in the coming years, as well as more effective positioning for Asia-bound US programs and systems

• Defense spending in Asia has mirrored the steady economic rise
• f the region in past decades
• China, the region’s leading economy, is becoming equally

assertive on the political and military front, seemingly reinterpreting its long-established approach of “peaceful rise”

• In response, the US has initiated a “Pivot to Asia” strategy that

remains somewhat ill-defined, but signals a change in defense and alliance priorities and funding

• In the coming five year period, Avascent projects $380 billion in

defense investment among Asia’s leading addressable markets, such as J apan, India, S. Korea, Australia, and others

• Roughly a third of these funds remains uncommitted to specific

providers and/ or programs making the region highly attractive to global defense and aerospace firms

• Affordable strike weapons, tactical aircraft, persistent ISR,

unmanned solutions, undersea and electronic warfare capabilities are among leading requirements across the region

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Note: 2013 GDP represented by flags is approximate and aimed at portraying rough order of magnitude values Source: IHS Global Insight, IMF, World Bank, PWC, Carnegie Endowment, Avascent Analysis

Projected GDP Growth Rates ’13 – ’23

$5.0

$.25

2013 Real GDP ($T)

Historical GDP Growth Rates ‘07 – ‘12

10% 0% 10% 5% 5% China India Indonesia Vietnam M alaysia Taiwan South Korea Australia Thailand J apan Sing.

Asia’s economic growth is among the most important, and likely enduring, “ mega-trends” of our time, driving business and policy decisions alike

GDP Growth in Asia-Pacific

Historical & Projected (Constant US Dollars, % Annual)

Lao PDR Nepal M yanmar New Zealand Bangladesh Cambodia Bhutan Brunei

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Commercial and Business Aircraft Backlog 2014-16

In the coming three years, the Asia-Pacific region is expected to receive over 1,500 commercial and business aircraft, easily topping numbers from North America and Europe

Sources: Ascend, Boeing, IMF, FAA, Airbus 2012 GMF, Avascent Analysis

Traffic Growth by Airline Domicile

2,000 4,000 6,000

Africa CIS Latin America M iddle East North America Europe Asia-Pacific

RPK (Billion)

2011 % of Global RPK

2011 2031

28% 32% 27% 24% 27% 20% 7% 11% 5% 6% 3% 4% 3% 3%

+5.4% +4.1% +3.3% +7.3% +5.9% +5.4% +5.0%

While traffic in the European and North American regions is expected to remain stable, Asia-Pacific airlines are expected to see their global traffic share increase from 28% to 32% cementing their leading role

2031

While not part of today’s discussion, it is impossible to ignore the prominence of the Asia-Pacific region in civil aerospace; the upcoming Singapore Air Show will bear witness to this growth trend

100 200 300 400 500 600 700 800

Asia Pacific North America Europe Middle East Latin America and Caribbean Africa

2014 2015 2016

Similarly, space opportunities across the commercial and civil government customer set, to include communication, navigation, science and other applications, must not be overlooked

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Defense spending in the region has also grown, first and foremost as a result of China’s impressive defense modernization, as well as its neighbors’ response to these developments

100 200 300 400 500 600 700 800

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Historic and Projected Defense Spending, 2000-2033

Defense Spending, Real US$2013 Billions

Assumptions

• US base defense budget (non-OCO) at

$495B for FY2014

• Annual US defense spending growth

in real terms at 1.0% (historical long- term rate) over the period 2016-2033

• Current Chinese defense budget of

$200B in 2013, approximately 3.5% GDP

• Chinese GDP growth of 6.2% from

2014-2033 and defense budget pegged to GDP Assumptions

• US base defense budget (non-OCO) at

$495B for FY2014

• Annual US defense spending growth

in real terms at 1.0% (historical long- term rate) over the period 2016-2033

• Current Chinese defense budget of

$200B in 2013, approximately 3.5% GDP

• Chinese GDP growth of 6.2% from

2014-2033 and defense budget pegged to GDP

Note: Figures reflect real, inflation adjusted GDP estimates (2013 $US) Source: IHS Global Insight, IMF, World Bank, CIA, DoD, Avascent Analysis

Year China projected to achieve spending parity with the United States

2029

• 10%

+10%

2016 U.S Presidential Election

Projected PRC Defense Budget ~50%

• f US DoD Budget, 2016

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US actions demonstrate the Asia-Pacific region’s vital importance in the global economic and security environment

2011: M arines in Darwin

The US signed an agreement with Australia in 2011 to base up to 2,200 M arines in Darwin, with 1,000 likely present by the end of 2014

2012: Panetta Visits Vietnam

Then-Secretary of Defense Leon Panetta visited Cam Rahn Bay, Vietnam in June 2012, becoming the first US Secretary to visit since the end

• f the Vietnam War

2012: Clinton Visits Burma

In November 2012, then- Secretary of State Hillary Clinton visited Burma, opening ties with a country cut-off by the US for

• ver a half-century

2013: J apan joins TPP

Japan announced in M arch 2012 that it will join negotiations for the Trans-Pacific Partnership Free Trade Agreement (FTA) in July, becoming the 12th country to sign-on to the Obama Administration’s main economic priority in the Pacific

2013: US – ROK M ilitary Exercises

US and South Korea participated in the two- month long Foal Eagle exercises in M arch-April 2013, in which the US deployed B-2 Bombers to the Korean Peninsula for the first time, as well as utilized F-22 Raptors and M V-22 Ospreys during the exercises

2012: US-ROK FTA

The US-South Korea Free Trade Agreement (FTA) entered into force in M arch 2012, after Congress approved it in October 2011

2012: Singapore LCS Basing

The US and Singapore announced in June 2012 an agreement to allow the US Navy to deploy up to 4 LCS to Singapore

In response, the US has initiated a diplomatic and military pivot, which has yet to become fully apparent, aimed at fostering alliances and both engaging and balancing China

2013: Biden Visits China

In December, US VP Joe Biden visits China to ease tensions in Northeast Asia

2010: Obama visit to India

The President’s fall trip to India is credited, among other things, with supporting Boeing’s large C-17 sale

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Defense spending among Asia’s leading powers—beyond China and Russia—will hit $250 billion within several years, with roughly one third destined for defense investment

$62 $64 $65 $67 $69 $38 $40 $43 $46 $50 $35 $37 $40 $42 $45 $26 $27 $28 $30 $32 $10 $11 $11 $12 $12 $10 $11 $11 $12 $12 $9 $11 $13 $15 $18 $- $50 $100 $150 $200 $250 $300 2014 2015 2016 2017 2018 Billions

Philippines Vietnam M alaysia Thailand Afghanistan Pakistan Indonesia Singapore Taiwan Australia South Korea India Japan

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Procurement Research & Development Non-MOD Support Operations & M aintenance Personnel

Equipment Relevant Services Relevant

Largely Industry Non-Addressable Addressability of Asian Defense Spending 2014-18 Defense Investment = Procurement + R&D

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Public comments by corporate leaders showcase that industry has taken note of these trends, redoubling efforts & resources in the region; some firms must delicately balance commercial and defense priorities

Aegis is patrolling the Sea of J

• apan. THAAD was

deployed to Guam. F-22s are positioned in South Korea. And the Littoral Combat Ship is on a tour of duty in Southeast Asia. What better proof is there that our technologies are making a difference? That’s performance, and that’s how you secure business.

M arillyn A. Hewson, Lockheed M artin CEO and President June 18, 2013

During the next 20 years, nearly half of the world’s air traffic growth will be driven by travel to, from, or within the Asia Pacific region. Total traffic for the region will grow 6.4 percent per year. Asia Pacific airlines will need 12,030 new airplanes, valued at $1.7 trillion, over the next 20 years.

Boeing Current M arket Outlook 2012-2031

India is a $31 billion defense market with tremendous growth

• potential. The strengthening of the India team comes at a time

when we are looking for new opportunities in the market and for ways to build our industry partnerships.

Vivek Lall, VP India, Boeing Defense, Space & Security, J une 16, 2010

“It was very gratifying to see the U.S. defense policy now moving to focus more and more on Asia Pacific. We have seen over the years that this is an area where we have become a trusted ally and we need to maintain those relationships. From a product standpoint, we look at the region as somebody we’ve known for a long time and have sat together and worked to solve their urgent operational needs.

J im Hvizd, Raytheon SAS VP for Intl. BD & Strategy February 10, 2012

ASEAN has always been an important market for Sikorsky and the aerospace industry at large. Sikorsky aircraft have been serving ASEAN fleets since the 1960s, providing a breadth of military and commercial mission support. Our products carry a legacy of safety and reliability that are a solid foundation on which to further grow our relationships in Southeast Asia.

Christophe Nurit, Sikorsky Vice President, Sales, Asia February, 14, 2012

Note: All quotes above are publicly available and taken from the sources listed below; they are illustrative of broader industry perceptions and trends Sources (clockwise from upper left): www.lockheedmartin.com, www.AINonline.com, www.sikorsky.com, and www.boeing.com

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Over the coming five years, Avascent projects roughly $110 billion in uncommitted and industry- addressable defense equipment and systems opportunities across Asia’s top markets

$58 $55 $55 $51 $47 $4 $6 $8 $11 $13 $3 $6 $8 $12 $17 $3 $3 $4 $6 $5 $- $10 $20 $30 $40 $50 $60 $70 $80 $90 2014 2015 2016 2017 2018 Billions

Unaddressable

Defense investment spending directly earmarked for government agencies or

• ther entities

Unaddressable

Defense investment spending directly earmarked for government agencies or

• ther entities

Project White Space

Funding available for future projects: highly shapeable for industry within the confines of countries’ defense context

Project White Space

Funding available for future projects: highly shapeable for industry within the confines of countries’ defense context

Projected Opportunity

Yet to be defined opportunities whose major requirements are becoming evident according to Avascent analysis

Projected Opportunity

Yet to be defined opportunities whose major requirements are becoming evident according to Avascent analysis

State Opportunity

Stated defense requirements or programs that have yet to be awarded: near term industry opportunities

State Opportunity

Stated defense requirements or programs that have yet to be awarded: near term industry opportunities

Contract Awarded

Programs that are ongoing: prime or integrator typically selected, but sub & partnering opportunities may exist

Contract Awarded

Programs that are ongoing: prime or integrator typically selected, but sub & partnering opportunities may exist Industry Addressability

Even in the “Contract Awarded” segment, opportunities to sub, partner, or perhaps displace a competitor, may exist working with both foreign and indigenous primes or major systems integrators

Limited High Legend: Note: This and subsequent slides evaluate the defense markets of the following addressable countries: Afghanistan, Australia, India, Indonesia, Japan, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam

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Roughly 20 percent of identified systems-level spending in the 2014-18 Asian defense landscape is captured by a dozen large local and regional players; $110 billion in spending remains highly competitive

Addressable $110B Other* $215B

Note: “ Other” includes over 600 local, regional, and global providers, both private and public sector; also includes JVs, partnerships and other ventures that operate independently of their parent firms; if this query is conducted at the prime contract level, the share of the top dozen firms roughly doubles in size while the composition of the firms stays roughly the same, with some exceptions Source: Avascent Analytics

Aggregate Competitive Landscape 2014-18

Systems (Non-Prime) Analysis

$55B*

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Unsurprisingly, vehicle, ship and aircraft platforms, structures, and engines comprise the largest segment

• f Asian defense hardware spending, but this sector captures just half of the addressable market

$- $5 $10 $15 $20 $25 $30 $35 $40 $45 $50

Platforms Weapons C4I Sensors EW/ IW Other

Billions

2011 2012 2013

$92.2B $35.4B $27.1B $20.6B $7.5B $6.6B

Note: The “ Platforms” category includes propulsion, power, engines, armor, integration and other elements Source: Avascent Analytics

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Successfully addressing Asia’s defense markets requires not only a sound understanding of its programs and projects, but also a strong grasp of its mission-based underpinnings

Land Combat Operations 18% Air Warfare 13% M ulti-M ission 12% Air & M issile Defense 10% Naval Warfare 9% M obility & Lift 8% Undersea Warfare 6% ISR 5% Other M issions* 19%

$189B

2011-13

Defense Investment Spending by M ission Area

2011-13

* Note: “ Other Missions” includes Ground Attack & Strategic Deterrence, Amphibious Assault, Homeland Defense, Information Dominance, Military Space Operations & Control and other missions Source: Avascent Analytics

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Japan is responding to the ascending power of a historical rival; despite economic challenges, Japan is wealthy, will evolve policy and will fund an enduring modernization program

Sources: Avascent Analytics, Avascent Analysis, International Monetary Fund, World Economic Outlook Database; Japanese MoD Note: Defense Investment funding shown above captures Procurement, R&D, and any additional acquisition or industry-accessible equipment budgets

Relevant Developments  December 2012 election of LDP PM

Shinzo Abe

 Bold economic reform agenda

(three “arrows”); reinterpreting 3Ps

 LDP landslide in July elections  New CONOPS: “Dynamic Defense”

US$ billions

4,600 4,800 5,000 5,200 5,400 5,600 5,800 6,000 6,200 10.5 11.0 11.5 12.0 12.5 13.0 13.5 14.0

Investment 2012-2018: 2.4% CAGR

J apan J apan

Defense Investment GDP (right axis)

Defense Trends Capability Needs Increasing naval fleet and capabilities, planned sub increase to 22 Increasing naval fleet and capabilities, planned sub increase to 22 Fielding new aircraft, P-1, for MPA/ ASW missions Fielding new aircraft, P-1, for MPA/ ASW missions Planning 42 F- 35A JSF, though a weakened yen could result in delays Planning 42 F- 35A JSF, though a weakened yen could result in delays Resilient integrated C3 Resilient integrated C3 National integrated air defense National integrated air defense Next gen missile defense Next gen missile defense Advanced

• perational

base defense solutions Advanced

• perational

base defense solutions Long-range strike: land/ air launched BM / CM Long-range strike: land/ air launched BM / CM

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Competition with China, as well as its enduring rival Pakistan, will provide a sustained impetus for Indian defense modernization and strategic balancing Relevant Developments  Distrust between civilian-run

ministries and armed forces undermines strategy development

 Challenges with major acquisition

programs, faltering govt. revenue

 Political class preoccupied with

2014 national elections

US$ billions

India India

Defense Investment GDP (right axis)

Defense Trends Capability Needs Western & Russian equipment purchases Western & Russian equipment purchases Modernizing platforms; improving C2 and BMD capabilities Modernizing platforms; improving C2 and BMD capabilities Corruption and

• nerous

bureaucratic burdens for defense firms Corruption and

• nerous

bureaucratic burdens for defense firms Persistent ISR capabilities, including UAS and UUVs Persistent ISR capabilities, including UAS and UUVs Advanced EW capabilities Advanced EW capabilities Next-generation missile defense Next-generation missile defense Airborne networks Airborne networks Improved blue- water capabilities Improved blue- water capabilities

500 1,000 1,500 2,000 2,500 3,000 3,500 $- $5 $10 $15 $20 $25

Source: Avascent Analytics, International Monetary Fund, World Economic Outlook Database; Indian MoD, The Hindu (illustration), Avascent Analysis, Note: Defense Investment funding shown above captures Procurement, R&D, and any additional acquisition or industry-accessible equipment budgets

Investment 2012-2018: 2.8% CAGR

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Australia, Indonesia, and South Korea all have other primary security drivers, but China is increasingly factoring into each country’s strategic calculus

• 500

1,000 1,500 2,000 2 4 6 8

• Investment 2012-2018:

8% CAGR

Australia Australia

US$ billions

• 500

1,000 1,500 2,000 5 10

• Investment 2012-2018:

18% CAGR

Indonesia Indonesia

US$ billions

Defense Investment GDP (right axis)

• 500

1,000 1,500 2,000

• 5

10 15 20

Investment 2012-2018: 6.5% CAGR

South Korea South Korea

US$ billions

• Gov’t deficits led to declines;

spending finally in upswing

• Defense White Paper emphasizes

air combat defense (e.g., F/A- 18E/ F/ G, P-8s, 737 AEW&Cs, & F- 35s procurements)

• Strong defense budget growth
• ver last decade
• New focus on maritime

procurement, including plans for a fleet of 10 subs in the Defense Strategic 2024 Plan

• Heavy defense investment in new

capabilities (e.g., AEGIS-based M D, new destroyer & sub programs, KF-X)

• Doubling cyber-defense &

security budget M ALE/ HALE UAS M ALE/ HALE UAS Procurement of 24 M PAs Procurement of 24 M PAs Development of: persistent ISR, cyber, interoperability Development of: persistent ISR, cyber, interoperability KF-X next-gen fighter KF-X next-gen fighter Development of UAV/ UAS capabilities Development of UAV/ UAS capabilities Extended-range UUV platforms and sensors Extended-range UUV platforms and sensors Collins-class sub replacement project Collins-class sub replacement project Advanced EW capabilities Advanced EW capabilities M odernization of land forces – M BTs, APCs, heavy artillery M odernization of land forces – M BTs, APCs, heavy artillery Continued expansion of surface/ sub-surface fleet Continued expansion of surface/ sub-surface fleet Aircraft – M PA, next-gen fighter (KF-X), helos Aircraft – M PA, next-gen fighter (KF-X), helos Anti-ship missiles Anti-ship missiles

Defense Investments Capability Needs

Source: Avascent Analytics, Avascent Analysis, International Monetary Fund, World Economic Outlook Database; MoDs Note: Defense Investment funding shown above captures Procurement, R&D, and any additional acquisition or industry-accessible equipment budgets

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Other ASEAN regional players are similarly motivated by security concerns in their airspace and along their maritime frontiers, increasingly challenged by Beijing’s assertive behavior

Defense Investment GDP (right axis)

• M odernizing defense forces
• Three major initiatives: an

indigenous 8x8 AFV; building six

• ffshore patrol vessels; and

replacing its aging M iG-29 fleet by 2015

• Spending heavily on defense

modernization

• Recently decided to acquire 6

Kilo-class submarines

• Upgrading air-combat capabilities

with Su-30M K acquisitions

• Aggressive defense spending plan
• M odernization includes new

fighters, patrol aircraft, and air defense

• Navy is acquiring M aestrale-class

frigates Persistent ISR capabilities Persistent ISR capabilities Air force modernization: fighters, M PAs, air defense radar Air force modernization: fighters, M PAs, air defense radar Naval surface vessels Naval surface vessels M id-range missile defense M id-range missile defense M ulti-purpose support ship M ulti-purpose support ship Expansion of sub fleet Expansion of sub fleet Sophisticated missile defense systems Sophisticated missile defense systems Replacement of surface fleet Replacement of surface fleet ASW capabilities (technology and aircraft) ASW capabilities (technology and aircraft)

Defense Investments Capability Needs

100 200 300 400 500 200 400 600

Investment 2012-2018: 11% CAGR

Philippines Philippines

US$ millions US$ billions

• 100

200 300 400 500 0.0 0.5 1.0 1.5 2.0

Investment 2012-2018: 8.9% CAGR

M alaysia M alaysia

US$ billions US$ billions

• 50

100 150 200 250 300 0.0 0.5 1.0 1.5 2.0 2.5

Investment 2012-2018: 10.9% CAGR

Vietnam Vietnam

US$ millions US$ billions

• Source: Avascent Analytics, Avascent Analysis, International Monetary Fund, World Economic Outlook Database; MoDs

Note: Defense Investment funding shown above captures Procurement, R&D, and any additional acquisition or industry-accessible equipment budgets

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To effectively counter increasing regional tensions over the coming two decades, Asia-Pacific players will require a host of new and advanced capabilities Priority Unmet Capabilities Capability Description Top Potential M arkets

Next-Generation Affordable Strike Weapons

• Affordable, and therefore large volume, stand-off

precision strike weapons able to perform in GPS- denied environment

Next Generation Tactical Aircraft

• Advanced air dominance, with much greater range

and payload capabilities – both land and CVN based

• High certainty of at scale availability, ~2030

Persistent, Survivable ISR

• Fully integrated into networked C4 architecture
• Unmanned with advanced signature reduction

Advanced EW Capability

• Standardized cross-service capability
• Long range and stand-off Electronic Attack capability

Affordable Large-Scale M issile Defense

• Could include directed-energy weapons and rail

guns capable of thwarting saturation missile attacks, affordably and without magazine limitations (i.e. DEW/ RG vs. SM -3/ SM -6/ THAAD/ PAC3)

Wide-area Airborne Networks

• Redundant/ back-up systems able to ensure

connectivity and Command & Control in C3 denied

• r degraded battle space

Undersea Warfare

• M anned and unmanned programs
• Coastal patrol and underwater ISR capability
• Enables ASW and M ine warfare missions

Source: CSIS, Avascent Analysis

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Taking the Next Step: Growing sales across Asia’s largest defense markets

• Asia’s defense sector presents a host of opportunities for

global defense firms, with US industry particularly well- positioned

• M aking and maintaining major in-roads in Asia’s

addressable markets requires a strong understanding of the equally unique and interdependent nature of defense procurement in countries such as J apan, India, S. Korea etc.

• Alongside complex requirements, firms need to carefully

consider the increasingly avid competitive landscape, local industrial participation demands, and US export control restrictions

• Growth in Asia’s airborne and maritime domains is assured

across the markets; land forces spending will be under pressure; M RO and services offerings including cyber also present a growing set of opportunities

• Needless to say, for providers to the US DoD a strong

position among Asian allies bodes well for potential future US-funded programs

PRIVATE & CONFIDENTIAL | AVASCENT | 23

Avascent Europe

59, rue des Petits Champs 75001 Paris Tel: +33 1 73 77 56 19 www.avascent.com

Avascent US

1615 L Street, NW, Suite 1200 Washington, DC 20036 Tel: +1 202 452 6990 www.avascent.com

J

• n Barney

M anaging Director 1-202-280-6812 jbarney@avascent.com Alek J

• vovic

Senior Associate 1-202-280-6842 ajovovic@avascent.com Chip Gregson Senior Advisor, Avascent International Chip.Gregson@Avascent.com Steve Ganyard President, Avascent International 1-202-280-6811 Steve.Ganyard@avascent.com