The Caribbean and Latin America region represents a relatively small share of the global naval market—less than 3% of US$1T on new construction naval platforms. However, that doesn’t mean the eleven countries AMI covers in the region receive less attention. As a closer look at the region’s naval market shows, Latin America remains of high interest to us. Every country we track and present to our customers gets the same thorough analytic treatment.
Latin America is of particular interest because it represents a key market for specialty ships and equipment. Many countries plan to acquire ice-capable vessels to operate in the “low latitudes” and Antarctic region, where countries such as Chile and Argentina have enduring national interests. The large Economic Exclusion Zones (EEZs) that characterize the region also drive a continuing demand for larger high endurance offshore patrol vessels (OPVs). The riverine environment of Amazonia also generates specific and unique requirements for patrol craft and amphibious lift ships.
Finally, as detailed below, the region’s leading navies are seeking new submarines in addition to larger and more capable frigates and corvettes. These platforms represent significant shares of the future naval spending in most countries, and are therefore constrained by the current economic and political difficulties besetting much of the region. Still, these “high-end” programs have strong support from naval and national security leaders, and are expected to continue, albeit in many cases at a slower pace.
The unique naval requirements of the Latin American region are being addressed by the growing number of indigenous naval design and construction firms in the region, as well as the world’s leading naval ship and systems companies opening offices or participating in joint ventures (JV).
A closer look at the specifics of the regional market yields insights for strategy and business development. This is one of the ways our Consulting Practice leverages the power of our market intelligence data to provide tailored solutions that shape business for our clients.
Looking at the market by country, Brazil continues to lead the region in projected spending and advanced platform acquisition. However, the political corruption, scandals and the economic slowdown has nearly halted all naval procurement activity. Despite a lagging economy, Brazil represents one third of the region’s planned new platform acquisition spending, and almost 20% of future hulls, representing the procurement of larger frigates and submarines.
Perhaps surprisingly, Colombia currently places second in the region for planned naval spending and first in the number of hulls to be acquired. While the country’s naval structure still is centered on smaller patrol and amphibious platforms, Colombia has put in place an ambitious program to acquire submarines, frigates, and corvettes. The three platform types together represent some 80% of planned spending. Colombia has steadily invested in developing local naval design and construction capabilities, and the country’s naval plans are beginning to benefit from these investments. Additionally, Peru is also planning to acquire up to four new frigates and OPVs in the near term.
Chile and Mexico continue to balance modernization of existing platforms and new construction programs. Chile in particular is looking to a new generation of larger frigates and submarines (90% of planned naval platform investment) to advance its sea service qualitatively, while maintaining the current size of the fleet. Peru shows the same pattern, with planned submarine, frigate and corvette programs making up 80% of forecasted spending.
As noted, the region’s requirement for OPVs remains substantial. Nine of the eleven countries AMI tracks in the region have OPV programs in their naval budget. Collectively, the OPV sector represents only 7% of forecasted naval spending, but within that almost US$2B in new ship budgets are opportunities for a number of shipbuilders and system providers.
This snapshot of the Latin American market highlights how AMI invests to build and sustain a truly global picture of the naval market. The aggregate numbers don’t always capture the reality that “every sale is a sale,” but we know that our customers rely on us for insights into “niche markets” and remote places as much as the mainstream markets and sectors. Further, as noted above, the Latin American region represents a leading opportunity for many specialty ship designs and systems.
South America Regional Naval Procurement Forecast
- Hulls to be acquired 2017-36
- New Platform Spend 2017-36
- Hulls % of Region Total
- Spend % of Region Total
- Subs Spend $M
- Sub % of Country Spend
- Frigates & Corvettes Spend $M
- Frigate & Corvette % of Country Spend
- OPV Spend $M
- OPV % of Country Spend
Brazil
- 53
- 9048
- 19%
- 33%
- 3260
- 36%
- 3700
- 41%
- 300
- 3%
Colombia
- 76
- 3574.6
- 28%
- 13%
- 700
- 20%
- 1600
- 45%
- 240
- 7%
Chile
- 11
- 3333.8
- 4%
- 12%
- 1000
- 30%
- 2000
- 60%
- 116
- 3%
Mexico
- 36
- 3120
- 13%
- 11%
- 2100
- 67%
- 400
- 13%
Ecuador
- 22
- 2970
- 8%
- 11%
- 1600
- 54%
- 1800
- 61%
- 150
- 5%
Peru
- 23
- 2952
- 8%
- 11%
- 900
- 30%
- 1500
- 51%
- 300
- 10%
Venezuela
- 11
- 1055
- 4%
- 4%
Argentina
- 11
- 899
- 4%
- 3%
- 200
- 22%
Uruguay
- 22
- 388.5
- 8%
- 1%
- 180
- 46%
DomRep
- 8
- 96.8
- 3%
- 0%
Trin/Tobago
- 1
- 50
- 0%
- 0%
- 50
- 100%
Region Total
- 274
- 27487.7
- 7460
- 27%
- 12700
- 46%
- 1936
- 7%