A Growing Market
The vehicle segment will see the strongest growth between now and 2029, a dynamic mainly due to Latin American countries’ ongoing plans to modernize their armed forces and improve their air, land and sea capabilities. Chile, Colombia and Brazil are among the countries currently planning to modernize their navies. The Brazilian navy plans to acquire 21 escort vessels, five 13,000-ton supply ships, four 20,000-ton amphibious assault ships and 40,000-ton aircraft carriers in the coming years. The Colombian navy, which had planned to expand its frigate fleet to six by 2025, is well on the way to meeting its goals. A new frigate will be built in 2025 by the COTECMAR shipyard, based on the SIGMA 10514 design by the Dutch Damenet Group. Two more are planned between now and 2030. On the terrestrial armament front, the forces of Brazil, Paraguay and Peru, among others, are planning to replace their ageing fleets of armored vehicles. These long-term projects are scheduled to run through 2030.
Brazil Engaged in a Major Transformation
Between 2011 and 2020, defense exports to Brazil rose from a total of $656.7 million to $1.7 billion. Export prospects are essentially concentrated around programs dedicated to defense aeronautics, weapons production and small-caliber ammunition. The three main countries from which Brazil imports weapons and weapons systems are France, the United States and the United Kingdom, with the majority of imports being aircraft, armored vehicles, ships, missiles and sensors.
The Navy is the main beneficiary of investments. A particular focus is on the development of the conventionally armed nuclear-powered submarine, which is expected by 2030. Brazil’s armed forces are engaged in a major modernization program, and have set their sights high in terms of capabilities. However, the economic and social context – and the number of projects already underway – leave many uncertainties about the feasibility of new procurement programs in the short term. The Armed Forces’ main strategic priorities are space and cyber-defense. Strategic partners could be chosen for these two areas, along the lines of other sectors (naval submarines, combat aviation, etc.). In the space sector, the first major cooperative ventures have already taken place with France (SGDC-1 satellite), China (CBERS) and, more recently, the United States (Alcantara launch center).
In addition to these strategic programs, many capability requirements have been expressed in the fields of wheeled self-propelled howitzers, medium multi-purpose helicopters, equipment for critical infrastructure protection, modernization of naval vessels, etc. Brazil is buying helicopters, and France, alongside Brazil, submarines. “The country is considering the purchase of Caesar cannons,” declared Michèle Ramis, Americas and Caribbean Director at the Ministry of Europe and Foreign Affairs in 2023 at a hearing before the French Senate , adding: “[French] Guiana’s growth offers prospects for our companies (…). Guiana is keen to protect its offshore oil installations, which opens up opportunities for companies in the defense sector – patrol boats from Ocea, helicopters from Airbus, coastal surveillance equipment from Thales, surveillance drones from Safran, etc.”
Moreover, Lula is planning to transform the Amazon and its protection into geopolitical instruments. This includes the implementation of regional cooperation mechanisms, in which France could play a significant role, given the stakes associated with its land border with Brazil, as well as the nature of bilateral defense dialogue. The political will to include France in this process opens up opportunities for military and defense cooperation. Indeed, Paris could use this environmental agenda as a gateway to launch other forms of bilateral and multilateral cooperation with the Brazilian armed forces. France could suggest strengthening exchanges in the fight against gold panning and international precious metal trafficking, as well as timber trafficking, in the wake of the decisions taken at the Amazon Summit. The creation by the French army of environmental cooperation programs, including with international partners, could be interpreted as a signal of the armed forces’ commitment to the policy pursued by the new government. In this respect, the inclusion of “climate issues” in the army’s list of new priorities is a first positive signal.
Colombia: Growing Opportunities
The defense sector is one of the most dynamic in Colombia. It accounts for 12% of the nation’s general budget (PNG) and nearly 4% of the country’s GDP. Colombia is the country with the highest military spending in South America in terms of GDP, and the second highest in terms of value, according to the World Bank. The country’s military force comprises over 400,000 personnel (armed forces and police officers). The government budget for the defense sector was set at 9.6 billion USD for 2023, showing an increase of almost 8.5% compared with 2022. In the private security sector, the market is estimated at 2.6 billion USD, or 1.2% of GDP. Public spending (military) is expected to dominate the market over the period 2023-2028. The spending plan includes the purchase of equipment, materials, weapons, ammunition, communications upgrades to reinforce the security and strategic capacity of the armed forces, and major maintenance work on equipment and infrastructure. France is the fifth-largest investor in Colombia. Promising security sectors include the fight against terrorism and serious crime, rescue services, the protection of vital infrastructure, restricted zones and networks. Crisis management, surveillance of maritime, land and air space, and cybersecurity are equally in high demand. NATO and Colombia have also signed a partnership agreement to strengthen dialogue and cooperation on common security challenges, including cybersecurity, terrorism, the fight against corruption and maritime safety.