Total sales for 100 biggest companies drop for 4th year in row; market share also falls

Arms manufacturers in North America and Western Europe dominated international arms sales in 2014, but their market share dropped while Russian and Asian companies saw theirs rise, the Stockholm International Peace Research Institute reported on Monday.

Total turnover for the 100 biggest arms and military services companies declined for the fourth year in a row, falling by 1.5 percent from 2013 to stand at $401 billion.

The top company was US-based Lockheed Martin, which saw sales grow by 3.9 percent to $37.5 billion for 2014.

Companies based in Western Europe and the United States continue to dominate the top 100, with 80 percent of the total market share. But sales for these companies decreased by 3.2 percentage points between 2013 and 2014.

In Western Europe, "a large part of the military 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", said Siemon Wezeman, a senior researcher at SIPRI's Arms and Military Expenditure Program.

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 2013-14 was 48.4 percent, according to the report.

The top Russian company on the list was Almaz-Antey, taking 11th place with a turnover of $8.84 billion.

Much of Russia's weapons production is delivered to its own armed forces.

Russian arms sales don't appear to have suffered much from the Western sanctions slapped on Moscow after its annexation of Crimea in March 2014. Weapons industry officials have said the sanctions have merely prompted Russia to seek out new markets and develop new technologies.

But because of its conflict with Russia, Ukraine's arms sales have plunged by 37.4 percent.

Emerging producers

Emerging producers, meanwhile, continued to strengthen their presence.

Two Turkish companies ranked in the top 100: ASELSAN, which increased its sales by 5.6 percent in 2014 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 in 2014, 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 $430 million in 2013 to $770 million in 2014.

(China Daily 12/15/2015 page12)