This report is the result of SDI's extensive market and company research covering the Chilean defense industry, and provides detailed analysis of both historic and forecast defense industry values including key growth stimulators, analysis of the leading companies in the industry, and key news. Introduction and Landscape Why was the report written? The Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original equipment manufacturers (OEMs) to gain a market share in the Chilean defense industry.

1. Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018
Product Synopsis
This report is the result of SDI's extensive market and company research covering the Chilean defense
industry, and provides detailed analysis of both historic and forecast defense industry values including key
growth stimulators, analysis of the leading companies in the industry, and key news.
Introduction and Landscape
Why was the report written?
The Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to
2018 offers the reader an insight into the market opportunities and entry strategies adopted by foreign original
equipment manufacturers (OEMs) to gain a market share in the Chilean defense industry.
What is the current market landscape and what is changing?
After witnessing a decline at a CAGR of -2.06% during the review period, Chilean defense expenditure is
valued at US$2.7 billion in 2013. The drastic fall in expenditure in 2012 was due to the transfer of the
Carabineros de Chile and Investigations Police of Chile to the Ministry of Interior and Public Security
(MoIPS) in 2011. During the forecast period, the country's defense expenditure is expected to continue
growing, with a CAGR of 8.67%, to reach US$4.0 billion by 2018.
What are the key drivers behind recent market changes?
Border disputes and military modernization to drive defense expenditure.
What makes this report unique and essential to read?
The Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to
2018 provides detailed analysis of the current industry size and growth expectations from 2014 to 2018,
including highlights of key growth stimulators. It also benchmarks the industry against key global markets and
provides a detailed understanding of emerging opportunities in specific areas.
Key Features and Benefits
The report provides detailed analysis of the current industry size and growth expectations from 2014 to
2018, including highlights of key growth stimulators, and also benchmarks the industry against key global
markets and provides a detailed understanding of emerging opportunities in specific areas. The report includes
trend analysis of imports and exports, together with their implications and impact on the Chilean defense
industry. The report covers five forces analysis to identify various power centers in the industry and how these
are expected to develop in the future. The report allows readers to identify possible ways to enter the market,
together with detailed descriptions of how existing companies have entered the market, including key
contracts, alliances, and strategic initiatives. The report helps the reader to understand the competitive
landscape of the defense industry in Chile. It provides an overview of key defense companies, both domestic
and foreign, together with insights such as key alliances, strategic initiatives, and a brief financial analysis.
Key Market Issues
The Chilean Copper Reserve Law (CRL), initially imposed in 1958 as a 15% tax on mining profits, changed
to a 10% tax on total sales from the state-run copper exporter Codelco in 1973. This law has resulted in a large
amount of cash being injected into the Chilean armed forces, facilitating large-scale defense procurement. In
2011, the new law replaced CRL funds with the Economic and Social Stabilization Fund (ESSF), which
Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

2. resulted in a reduction in the defense budget for 2012. An initiative in 2010 included a contingency fund to
provide further resources in exceptional circumstances, such as the major reconstruction program following
the devastating earthquake of February 2010, which has been the cause for much debate, with both sides
finding support. The Chilean economy has begun to recover from the 2010 earthquake and tsunami crisis
which caused damage worth US$30 billion disturbing all the sectors in the economy. To counter the mounting
deficit and public debt, the government is cutting back on its expenditure, including that on defense. The focus
sectors as per the 2013 federal budget are education, universities, research and development (RandD), and
infrastructure to boost growth and the employment rate. With heavy dependence on copper exports which
account for 55% of total exports, the economy might face trouble due to the fluctuating price of copper. This
pattern may hamper the short term procurement and delay the modernization plan of the defense sector.
Key Highlights
Chile hosts Exponaval, a biennial naval and maritime defense conference and exhibition sponsored by the
Chilean Ministry of Defense (MoD) and Navy. Launched in 1998, the event provides a platform for global
naval defense equipment manufacturers to showcase their products, such as naval aviation equipment, refitted
ships, and support fleets. At the 2012 event, representatives from 29 countries, over 180 exhibitors, and 15,000
visitors attended the event, which generated business in excess of US$700 million. In recent years, there have
been a growing number of joint ventures between international companies and governments, and their Chilean
counterparts. The Chilean government encourages these joint ventures and technology-sharing agreements,
which enables domestic firms to enhance their capabilities while enhancing diplomatic relations between the
countries. During 2008-2012, Germany and Italy, with a share of 96% and 4% respectively, were the
suppliers of military hardware to Chile. However, during 2011, Germany supplied 100% of the defense
equipment to the country. Over the next five years, Chile's arms imports will continue to be dominated by
European suppliers such as Germany, Italy, and France, as the country is an EU member and favors defense
equipment manufactured by other member countries.
table Of Content
1 Introduction
1.1. What Is This Report About?
1.2. Definitions
1.3. Summary Methodology
1.4. Sdi Terrorism Index
1.5. About Strategic Defence Intelligence
2 Executive Summary
3 Market Attractiveness And Emerging Opportunities
3.1. Defense Market Size Historical And Forecast
3.1.1. Chilean Defense Expenditure To Be Us$16.98billion Over The Forecast Period
3.1.2. Border Disputes And Military Modernization To Drive Defense Expenditure
Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

3. 3.2. Analysis Of Defense Budget Allocations
3.2.1. Revenue Expenditure Account For Majority Of The Chilean Defense Budget
3.2.2. Defense Spending As Percentage Of Gdp Is Expected To Increase Over The Forecast Period
3.2.3. Per-capita Defense Expenditure Expected To Reach Us$219 By 2018
3.2.4. Army And Navy Expenditure Account For The Majority Of The Chilean Defense Budget
3.2.5. Highest Budget Allocation To Land Forces Compared To Other Armed Forces
3.2.6. Capital Expenditure In Navy Spending Will Increase In Forecast Period
3.2.7. Other Defense Expenditures To Continue Growing Over The Forecast Period
3.3. Homeland Security Market Size And Forecast
3.3.1. Homeland Security Budget Projected To Grow Over The Forecast Period
3.3.2. Carabineros De Chile Accounted For Majority Of Homeland Security Expenditure
3.3.3. Drug Trafficking And Threat From Mapuche Community To Drive Homeland Security Budget
3.3.4. The Chile Considered At 'some Risk' Of Terrorist Attack
3.3.5. Chile Experienced Low Terror Activity During The Review Period
3.4. Benchmarking With Key Global Markets
3.4.1. Chilean Defense Budget Expected To Register Consistent Growth Over The Forecast Period
3.4.2. Chilean Military Expenditure Is Limited Compared To Countries With The Largest Defense
Expenditure
3.4.3. The Country Allocates A Significant Percentage Of Gdp Towards Defense Expenditure
3.4.4. Chile Ranked Twenty Fourth Among Top Arms Importing Countries For 2008-2012
3.4.5. Chilean Arms Exports Meager Compared To Top Arms Exporting Countries For 2008-2012
3.5. Market Opportunities: Key Trends And Growth Stimulators
3.5.1. Border Security
3.5.2. Transport Helicopters
3.5.3. Homeland Infrastructure
3.5.4. Unmanned Aerial Vehicles (uav)
4 Defense Procurement Market Dynamics
4.1. Import Market Dynamics
4.1.1. Defense Import Maintain Large Size During The Review Period
4.1.2. Germany Accounts For The Majority Of The Chilean Defense Imports
4.1.3. Aircraft, Ships, And Armored Vehicles Are The Largest Imported Military Hardware
5 Industry Dynamics
5.1. Five Forces Analysis
5.1.1. Bargaining Power Of Supplier: Medium
5.1.2. Bargaining Power Of Buyer: High
5.1.3. Barrier To Entry: Low
5.1.4. Intensity Of Rivalry: High
5.1.5. Threat Of Substitution: Medium
Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

4. 6 Market Entry Strategy
6.1. Market Regulation
6.1.1. Offset Policy Aids The Development Of The Domestic Defense Industry
6.1.2. Foreign Direct Investment In The Defense Sector Is Permitted Without Any Complications
6.1.3. Chile Disclosed Its Offset Obligations
6.2. Market Entry Route
6.2.1. The Country's Biennial Defense Exhibition Provides An Attractive Entry Route
6.2.2. Joint Ventures And Collaborations Provide Market Entry Opportunities
6.2.3. Foreign Equipment Manufacturers Enter The Market Through Direct Commercial Sales
6.3. Key Challenges
6.3.1. Decreasing Defense Budget Due To Removal Of Copper Reserve Law
6.3.2. Changes In The Economic Environment
7 Competitive Landscape And Strategic Insights
7.1. Competitive Landscape Overview
7.2. Key Domestic Companies
7.2.1. Famae: Overview
7.2.2. Famae: Products And Services
7.2.3. Famae: Recent Announcements And Strategic Initiatives
7.2.4. Famae: Alliances
7.2.5. Famae: Recent Contract Wins
7.2.6. Famae: Financial Analysis
7.2.7. Desarrollo De Tecnologias Y Sistemas (dts): Overview
7.2.8. Desarrollo De Tecnologias Y Sistemas (dts): Products And Services
7.2.9. Desarrollo De Tecnologias Y Sistemas (dts): Recent Announcements And Strategic Initiatives
7.2.10. Desarrollo De Tecnologias Y Sistemas (dts): Alliances
7.2.11. Linktronic Radar Systems: Overview
7.2.12. Linktronic Radar Systems: Products And Services
7.2.13. Sisdef Ltda: Overview
7.2.14. Sisdef Ltda: Products And Services
7.2.15. Sisdef Ltda: Recent Announcements And Strategic Initiatives
7.2.16. Sisdef Ltda: Recent Contract Wins
8 Business Environment And Country Risk
8.1. Demographics And Social Statistics
8.1.1. Total Rural Population
8.1.2. Total Urban Population
8.1.3. Number Of Households
8.2. Economic Performance
8.2.1. Gdp Per Capita
8.2.2. Gdp, Current Prices
Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018

5. 8.2.3. Consumer Price Index
8.2.4. Wholesale Price Index
8.2.5. Local Currency Unit Per Usd
8.2.6. Market Capitalization Of Listed Companies
8.2.7. Market Capitalization Of Listed Companies (% Of Gdp)
8.2.8. Government Cash Surplus/deficit
8.2.9. Government Cash Surplus/deficit As % Of Gdp
8.2.10. Goods Exports As % Of Gdp
8.2.11. Goods Imports As % Of Gdp
8.2.12. Goods Trade Surplus/deficit As % Of Gdp
8.2.13. Service Imports As % Of Gdp
8.2.14. Service Exports As % Of Gdp
8.2.15. Service Trade Surplus/deficit As % Of Gdp
8.2.16. Foreign Direct Investment
8.2.17. Net Foreign Direct Investment As % Of Gdp
8.2.18. International Reserves, Including Gold
8.3. Energy And Utilities
8.3.1. Conventional Thermal Electricity Net Generation
8.3.2. Hydroelectricity Net Generation
8.3.3. Nuclear Electricity Net Generation
8.3.4. Conventional Thermal Electricity Installed Capacity
8.3.5. Electricity Imports
8.3.6. Proved Natural Gas Reserves
8.3.7. Petroleum Consumption
8.3.8. Crude Oil Proved Reserves
8.3.9. Total Non-hydro Renewable Electricity Net Generation
8.4. Infrastructure
8.4.1. Rail Lines
8.4.2. Air Transport, Freight
8.5. Minerals
8.5.1. Mining, Manufacturing, Utilities Output
8.6. Technology
8.6.1. Patents Granted
8.7. Telecommunication
8.7.1. Telephone Lines
8.7.2. Telephone Lines Penetration Rate
9 Appendix
9.1. About Sdi
9.2. Disclaimer
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Future of the Chilean Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2018