Arms manufacturers in North America and Western Europe dominated international arms sales last year, but their market share dropped while Russian and Asian companies saw theirs rise, the Stockholm International Peace Research Institute (SIPRI) said yesterday.
Total turnover for the 100 largest arms and military services companies declined for the fourth year in a row, falling by 1.5 percent from 2013 to stand at US$401 billion.
The top company was US-based Lockheed Martin, which last year saw sales grow by 3.9 percent to US$37.5 billion.
Companies based in Western Europe and the US continue to dominate the top 100, with 80 percent of the total market share, but sales for Western European and US companies decreased by 3.2 percentage points between 2013 and last year.
In Western Europe “a large part of the defense spending, which is missing, is from procurement. It’s easier to cut procurement than to cut salaries — so the quickest thing to do is just buy less,” SIPRI’s Arms and Military Expenditure Programme senior researcher Siemon Wezeman said.
Meanwhile, the 36 companies representing the rest of the world on SIPRI’s list saw their sales soar by 25 percent, boosted by an almost 50 percent rise in Russian arms sales.
“Russian companies are riding the wave of increasing national military spending and exports,” Wezeman said.
The combined annual revenue growth of the 11 Russian companies on SIPRI’s list from 2013 to last year was 48.4 percent, the report shows.
The top Russian company on the list was Almaz-Antey, taking 11th place with a turnover of US$8.84 billion. Almaz-Antey manufactures the Buk missile, which was allegedly used to shoot down a Malaysia Airlines Boeing 777 last year on July 17, in Ukraine.
Much of Russia’s weapons production is delivered to its own armed forces, but it also has large clients in other parts of the world, including India and China.
Moscow has also provided arms to Syria since the Soviet era, though Damascus is now receiving very little, Wezeman said.
After an almost five-year conflict that has left 250,000 people dead and forced millions of others to flee, Syria no longer has the financial means to buy weapons from Russia.
“The Russians basically say: You pay, then we deliver, otherwise we don’t do it,” Wezeman said.
Russian arms sales do not appear to have suffered much from the international sanctions slapped on Moscow after its annexation of Crimea in March last year. Weapons industry officials have said that the sanctions have merely prompted Russia to seek out new markets and develop new technologies.
However, because of its conflict with Russia, Ukraine’s arms sale have plunged by 37.4 percent.
“The noticeable decline in sales for Ukrainian companies was largely due to disruption caused by the conflict in eastern Ukraine, the loss of the Russian market and the fall in the value of the local currency,” Wezeman said.
Emerging producers, meanwhile, continued to increase their presence.
Two Turkish arms-producing companies ranked in the top 100: ASELSAN, which last year increased its sales by 5.6 percent, but has moved down in the ranking from 66th to 73rd; and Turkish Aerospace Industry, which has entered the top 100 at 89, with a growth in arms sales of 15.1 percent.
South Korean companies also raised their profile last year, increasing their total sales by 10.5 percent compared to 2013.
The most recent South Korean entrant to the top 100 is Hyundai Rotem, a military vehicle manufacturer, which jumped from US$430 million in 2013 to US$770 million last year.
A total of 15 Asian companies, excluding Chinese manufacturers, entered the Sipri top 100 list.
The Swedish institute does not include China in its list due to a lack of reliable data.
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