Arms-producing and military services companies from North America and Western Europe once again dominated the list (which however does not include China-based companies). Sales by the 44 US-based companies accounted for over 60 per cent of all arms sales by the Top 100 arms-producing companies in 2010. The 30 companies based in Western Europe accounted for a further 29 per cent.
The global arms industry continues to be highly concentrated, with the top 10 arms-producing companies accounting for 56 per cent, or $230 billion, of total Top 100 arms sales.
‘The data for 2010 demonstrates, once again, the major players’ ability to continue selling arms and military services despite the financial crises currently affecting other industries,’ states SIPRI arms industry expert Dr Susan Jackson. ‘To take one example, OshKosh Corporation had a 156 per cent increase in arms sales in 2010 after winning the M-ATV (MRAP all-terrain vehicles) contract. In other cases, change is likely, not due to the financial crisis but rather because of the withdrawal of foreign troops from Iraq and the subsequent expected decrease in related equipment sales.’
The expanding military services market
- Data for 2010 shows a continuing increase in the sales of military services–including systems support, training, logistics, and maintenance, repair and overhaul–with 20 companies in the SIPRI Top 100 categorised primarily as military services providers.
- Combined military sales for these companies rose from $22.3 billion in 2002 to $55 billion in 2010, a 147 per cent increase in real terms. Furthermore, as a result of outsourcing and changes in military technologies, such services will play a key role in company strategies for the foreseeable future.
- In addition, a large number of other companies in the Top 100 that are not specialized military services companies also generate significant sales from military services. For example, in 2010 BAE Systems reported that 48 per cent of its total sales (or $15.8 billion) were generated in the services market.
Increased sales in 2010 illustrate how the arms industry is shielded from immediate, drastic financial threats
The expansion and consolidation of the arms industry further strengthened the position of the Top 100 arms producers. Significantly, the entry point for inclusion in the Top 100 rose from $280 million in sales in 2002 to $640 million in 2010.
Standard business strategies to stabilize arms production and military services activities include company acquisitions to widen and deepen company products and services. Two cases of increases in sales in the Top 100 for 2010 due to company acquisitions clearly illustrate this strategy.
- Increasing its arms sales year-over-year by 125 per cent to $1.1 billion, Triumph entered the Top 100 for the first time following its acquisition of Vought Aircraft.
- Babcock International increased its sales of military services by 40 per cent with contracts it absorbed through its acquisition of VT Group.
The SIPRI Arms Industry Database
The SIPRI Arms Industry Database was created in 1989. It contains financial and employment data on arms-producing companies in the OECD and developing countries (except China). Since 1990, SIPRI has published data on the arms sales and employment of the 100 largest of these arms-producing companies in the SIPRI Yearbook.
Arms sales are defined by SIPRI as sales of military goods and services to military customers, including both sales for domestic procurement and sales for export.
This is the first of a series of three major data sets pre-launches, before SIPRI's Yearbook is published in June 2012. On 19 March SIPRI will release its international arms transfers data (details of all international sales, transfers and gifts of major weapons in 2010) and on 17 April its world military expenditure data (comprehensive information on global, regional and national trends in military spending). Finally, on June 4, SIPRI will launch its 2012 Yearbook (cutting-edge information and analysis on the state of the world's nuclear forces, the international peacekeeping agenda and steps to control WMD).