Global Arms Industry: Sales by the Top 25 Companies Up 8.5%; Big Players Active in Global South
(Source: SIPRI; issued Dec. 07, 2020)

STOCKHOLM --- Sales of arms and military services by the sector’s largest 25 companies totalled US$361 billion in 2019, 8.5 per cent more than in 2018. The largest companies have a geographically diverse international presence. This is according to new data released today by the Stockholm International Peace Research Institute (SIPRI).

New data from SIPRI’s Arms Industry Database shows that arms sales by the world’s 25 largest arms-producing and military services companies (arms companies) totalled US$361 billion in 2019. This represents an 8.5 per cent increase in real terms over the arms sales of the top 25 arms companies in 2018.

US companies still dominate, Middle East represented in top 25 for the first time

In 2019 the top five arms companies were all based in the United States: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. These five together registered $166 billion in annual arms sales. In total, 12 US companies appear in the top 25 for 2019, accounting for 61 per cent of the combined arms sales of the top 25.

For the first time, a Middle Eastern firm appears in the top 25 ranking. EDGE, based in the United Arab Emirates (UAE), was created in 2019 from the merger of more than 25 smaller companies. It ranks at number 22 and accounted for 1.3 per cent of total arms sales of the top 25.

‘EDGE is a good illustration of how the combination of high national demand for military products and services with a desire to become less dependent on foreign suppliers is driving the growth of arms companies in the Middle East,’ said Pieter Wezeman, Senior Researcher with the SIPRI Arms and Military Expenditure Programme.

Another newcomer in the top 25 in 2019 was L3Harris Technologies (ranked 10th). It was created through the merger of two US companies that were both in the top 25 in 2018: Harris Corporation and L3 Technologies.

Chinese arms companies’ sales increase, Russian companies’ sales fall

The top 25 also includes four Chinese companies. Three are in the top 10: Aviation Industry Corporation of China (AVIC; ranked 6th), China Electronics Technology Group Corporation (CETC; ranked 8th) and China North Industries Group Corporation (NORINCO; ranked 9th). The combined revenue of the four Chinese companies in the top 25—which also include China South Industries Group Corporation (CSGC; ranked 24th)—grew by 4.8 per cent between 2018 and 2019.

Reflecting on the rise in the arms sales of Chinese companies, SIPRI Senior Researcher Nan Tian said: ‘Chinese arms companies are benefiting from military modernization programmes for the People’s Liberation Army.’

The revenues of the two Russian companies in the top 25—Almaz-Antey and United Shipbuilding—both decreased between 2018 and 2019, by a combined total of $634 million. A third Russian company, United Aircraft, lost $1.3 billion in sales and dropped out of the top 25 in 2019.

Alexandra Kuimova, Researcher at SIPRI, said: ‘Domestic competition and reduced government spending on fleet modernization were two of the main challenges for United Shipbuilding in 2019.’

Other notable developments and trends in the top 25

After the USA, China accounted for the second largest share of 2019 arms sales by the top 25 arms companies, at 16 per cent. The six West European companies together accounted for 18 per cent. The two Russian companies in the ranking accounted for 3.9 per cent.

Nineteen of the top 25 arms companies increased their arms sales in 2019 compared with 2018. The largest absolute increase in arms revenue was registered by Lockheed Martin: $5.1 billion, equivalent to 11 per cent in real terms.

The largest percentage increase in annual arms sales—105 per cent—was reported by French producer Dassault Aviation Group. ‘A sharp rise in export deliveries of Rafale combat aircraft pushed Dassault Aviation into the top 25 arms companies for the first time,’ says Lucie Béraud-Sudreau, Director of the SIPRI Arms and Military Expenditure Programme.

Mapping shows Global South becoming integrated into global arms industry

The report also looks at the international presence of the 15 largest arms companies in 2019. These companies are present in a total of 49 countries, through majority-owned subsidiaries, joint ventures and research facilities.

With a global presence spanning 24 countries each, Thales and Airbus are the two most internationalized companies—followed closely by Boeing (21 countries), Leonardo (21 countries) and Lockheed Martin (19 countries).

The United Kingdom, Australia, the USA, Canada and Germany host the largest numbers of these foreign entities. Outside the arms industry hubs of North America and Western Europe, the largest numbers of entities of foreign companies are hosted by Australia (38), Saudi Arabia (24), India (13), Singapore (11), the UAE (11) and Brazil (10).

Alexandra Marksteiner of the SIPRI Arms and Military Expenditure Programme said: ‘There are many reasons why arms companies might want to establish themselves overseas, including better access to growing markets, collaborative weapon programmes, or policies in the host countries tying arms purchases to technology transfers.’

Of the 49 countries hosting foreign entities of the top 15 arms companies, 17 are in low- and middle-income countries. ‘Countries in the Global South seeking to jump-start their arms production programmes have welcomed foreign arms companies as a means to benefit from technology transfers,’ said Diego Lopes da Silva, Researcher at SIPRI.

Siemon Wezeman, Senior Researcher at SIPRI, said: ‘The Chinese and Russian arms companies in the top 15 have only a limited international presence. Sanctions against Russian firms and government-mandated limits on acquisitions by Chinese firms seem to have played a role in constraining their global presence.’

About the mapping of the international presence of the arms industry

This year, SIPRI is releasing its data set on the arms sales of the world’s largest arms companies along with the results of a mapping exercise on the internationalization of the arms industry. For this, a new data set was created, comprising 400 subsidiaries, joint ventures and research facilities linked to the top 15 arms companies in 2019. Sources of data included company investment filings, information on company websites, public registrars and news articles.

To be included in the mapping, an entity had to have been active for the majority of the 2019 fiscal year; be located in a country other than the one in which its parent company has its headquarters; and (a) manufacture military goods or provide military services to military customers; or (b) manufacture, or provide services for, dual-use goods to military customers.


Click here for the full report (28 PDF pages), on the SIPRI website.

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US, China Ruled Global Arms Market in 2019: SIPRI
(Source: Deutsche Welle German Radio; issued Dec 07, 2020)
Weapons companies from the US and China dominated the global arms market in 2019, according to a new report. Meanwhile, the Middle East entered the list of the world's 25 biggest arms manufacturers for the first time.

The US and China carried the weight of the global arms market in 2019, while the Middle East made its debut among the "top 25" weapons manufacturers, according to a report by the Stockholm International Peace Research Institute (SIPRI).

US-based arms companies took the top five spots in 2019, with Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics recording a total of $166 billion (€137 billion) in annual arms sales, the data released by the Sweden-based think tank on Monday showed.

Overall, 12 US firms featured among the sector's 25 biggest manufacturers, constituting 61% of the combined weapons sales of the top 25.

Rise of China

China came second, accounting for 16% of arms sales last year. Four Chinese arms-producing companies appeared in the top 25 ranking, with three in the top 10.

The arms sales by the country's four biggest companies soared by 4.8% in 2019 as against $56.7 billion in 2018. The list included: Aviation Industry Corporation of China (6th); China Electronics Technology Group Corporation (8th); China North Industries Group Corporation (9th); and China South Industries Group Corporation (24th).

"Chinese arms companies are benefiting from military modernization programs for the People's Liberation Army," Nan Tian, a senior researcher at SIPRI, said in a statement.

The think tank added that there could be several other Chinese companies big enough to rank on its top 25 list but it was not possible to include them due to lack of "comparable and sufficiently accurate data."

In a first, a Middle Eastern weapons manufacturer found itself in the top 25 ranking.

EDGE, a firm from the United Arab Emirates, was on the 22nd spot, accounting for 1.3% of the total arms sales of the 25 giants.

According to Pieter Wezeman, a senior researcher with SIPRI's Arms and Military Expenditure Program, the firm's ranking reflected how a high national demand for military products and the aspiration to become less dependent on foreign providers was "driving the growth of arms companies in the Middle East."

Rafale deliveries boost Dassault's ranking

It was also the first time that France’s Dassault Aviation Group featured among the top 25 arms companies. The firm also accounted for the largest percentage increase in yearly arms sales at 105%.

SIPRI attributed the push in Dassault's ranking to a spike in the export of its Rafale fighter aircraft.

The combined sales of arms and military services by the 25 companies grossed $361 billion in 2019, an 8.5% increase from 2018.

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