South Korean Companies top SIPRI’s ‘Emerging Producers’ Category in 2016 Arms Sales

South Korean companies recorded a 20.6% increase in arms sales during 2016 compared to a year ago leading a pack of the Stockholm International Peace Research Institute (SIPRI)’s ‘emerging producers’ category which covers companies based in Brazil, India, South Korea and Turkey.

Arms sales of South Korean companies amounted to 8.4 billion during 2016. ‘South is increasingly turning to its own arms industry to supply its demand for weapons,’ says SIPRI Senior Researcher Siemon Wezeman in a new international arms industry data released today by SIPRI.

Indian companies- Hindustan Aeronautics Limited and Indian Ordnance Factories were the highest ranked among emerging producers coming in at 37 and 38 respectively from among the SIPRI top 100.

SIPRI’s list did not include China, some of whose companies have been recording increasing sales over the past 5 years. An accompanying note says, “Although several Chinese arms-producing companies are large enough to rank among the SIPRI Top 100, it has not been possible to include them because of a lack of comparable and sufficiently accurate data.”

SIPRI’s ‘other established producers’ category covers companies based in Australia, Israel, Japan, Poland, Singapore and Ukraine. The combined arms sales of companies in these countries fell by 1.2 per cent in 2016, largely driven by an overall decrease in the arms sales of Japanese companies (–6.4 per cent).

Japan’s largest arms companies experienced sharp falls in 2016: Mitsubishi Heavy Industries’ arms sales decreased by 4.8 per cent, while those of Kawasaki Heavy Industries and Mitsubishi Electric Corporation declined by 16.3 and 29.2 per cent respectively.

The combined arms sales of Russian companies listed in the SIPRI Top 100 increased by 3.8 per cent, amounting to $26.6 billion in 2016. Russian companies accounted for 7.1 per cent of the overall total. ‘The major economic difficulties experienced by Russia in 2016 have contributed to a slowdown in the rate of increase in the arms sales of Russian companies,’ says SIPRI Senior Researcher Siemon Wezeman.

The highest ranked Russian company in the SIPRI Top 100 for 2016 is United Aircraft Corporation, which is placed 13th. Its arms sales grew by 15.6 per cent compared with 2015 due to increased deliveries to the Russian armed forces and higher export volumes.

The combined arms sales of companies in Western Europe listed in the SIPRI Top 100 remained stable in 2016 at a total of $91.6 billion—an increase of 0.2 per cent compared with 2015. However, the trends for arms sales in the largest arms-producing countries— namely the United Kingdom, France, Italy and Germany—displayed clear divergences. There were overall decreases in the arms sales of Trans-European, French and Italian companies, while companies in the UK and Germany recorded overall increases.

The UK’s decision to withdraw from the European Union did not seem to have an impact on the arms sales of British companies, which rose by 2.0 per cent in 2016. The arms sales of BAE Systems, the fourth largest arms producer globally, remained stable (up by 0.4 per cent).

At a combined total of $217.2 billion, arms sales of US companies listed in the SIPRI Top 100 grew by 4.0 per cent in 2016. US military operations overseas as well as acquisitions of large weapon systems by other countries have driven this rise. Arms sales by Lockheed Martin—the world’s largest arms producer—rose by 10.7 per cent in 2016, which was decisive to the increase in the USA’s share of overall SIPRI Top 100 sales to 57.9 per cent.

Sales of arms and military services by the world’s largest arms-producing and military services companies—the SIPRI Top 100—totalled $374.8 billion in 2016.

The total for the SIPRI Top 100 in 2016 is 1.9 per cent higher compared with 2015 and represents an increase of 38 per cent since 2002 (when SIPRI began reporting corporate arms sales). This is the first year of growth in SIPRI Top 100 arms sales after five consecutive years of decline.