US military equipment giants Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics have yet again merged as top five arms making companies in the world. They are topping the list of 25 companies which did maximum business in 2019.
The United Arab Emirates (UAE), headquartered EDGE, has broken into the top 25, making it the first company from the middle east to break into the exclusive club dominated by US, European, Russia and Chinese companies.
Sales of arms and military services by the sector’s largest 25 companies totalled US $361 billion in 2019, which was 8.5 per cent more than in 2018, according to new data of the Stockholm International Peace Research Institute (SIPRI) released on Monday, December 7. Read it here The SIPRI is an international institute based in Sweden dedicated to research into conflict, armaments, arms control and disarmament.
The rise of EDGE
The report mentions EDGE saying “it was for the first time first time, a Middle Eastern firm appears in the top 25 ranking”. EDGE, was created in 2019 from the merger of more than 25 smaller companies it did sales of $ 4.750 Billion in 2019. It stood at number 22 and accounted for 1.3 per cent of total arms sales of the top 25.
The rise of EDGE to be among the world’s top 25 arms companies is due to the UAE’s investments in its arms–industrial sector over the past 10–15 years. The UAE’s arms industry has benefited from offsets and technology transfers, allowing it to progressively increase its local production of major arms and components, The SIPRI report observed.
IDD view is that EDGE would soon have a toe-hold in the Indian market. Caracal, a small arms making unit of the company has won a bid to supply 93,000 carbines to the Indian Army and the Caracal is ready to set up plant in India to meet the Indian needs of not just the carbine but a host of small arms.
Lockheed & Boeing lead US domination
The top five arms companies — Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics — . registered $166 billion in annual arms sales with Lockheed Martin leading with the sales at $ 53.230 billion and Boeing following at second spot with sales of $ 33.580 Billion – collectively that is $ 86.81 Billion, which is 24 percent of the $ 361 billion combined sales done by the 25 top companies of the world.
Lockheed Martin, the world’s largest arms company in 2019, reported the biggest absolute increase—its arms sales in 2019 were $5.1 billion higher than in 2018, equivalent to an increase of 11 per cent in real terms. It alone, accounted for 14.74 percent of global sales of the top 25 companies.
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.
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.
China has second largest share of sales
After the USA, China accounted for the second largest share of 2019 arms sales by the top 25 arms companies, at 16 per cent if all sales.
The top 25 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.’
Russia takes a dips
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, the SIPRI said. The two Russian companies in the ranking accounted for 3.9 per cent.
Russian company, United Aircraft, lost $1.3 billion in sales and dropped out of the top 25 in 2019.
Europe accounted for 18 percent. Rafale helped
The six West European companies together accounted for 18 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. 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 ( to India also) 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.