In 2011-2014 Russia to remain second at non-nuclear submarines market

27.05.2011 In the coming 4-year prospect (2011-2014) world sales of new non-nuclear submarines will be 12 subs to the amount of $4.48 bln in case of all current contracts, declared intentions, and held tenders are realized.

Generally, this segment of global market is expected to face a kind of decline. However, since 2015 sales volume will substantially increase because key players of the world non-nuclear submarine market (Germany, Russia and France) have solid backlogs of orders for 2015 and forth.

To compare, in the period of 2007-2010 only 16 subs were exported for $5.124 bln. Fourteen of them were non-nuclear submarines sold for $5.051 bln, which is 87.5% of total number (or 98.5% of worldwide delivery cost).

In terms of percentage points, world exports of non-nuclear subs in 2011-2014 - comparing to the period of 2007-2010 - will make 85.7% in subs number and 88.7% in costs.

In 2007-2010 average demand for new submarines worldwide was 3.5 subs per year. In 2011-2014 annual demand will reduce to 3 submarines.

Germany holds the leading position in the rating of new non-nuclear submarines' exporters (17 subs to the amount of $6.189 bln). There were 9 subs exported in 2007-2010 for $3.227 bln. Backlog of orders for 2011-2014 includes 8 new non-nuclear submarines to the sum of $2.962 bln.

Germany has orders both for the period of 2011-2014 and for the prospect after 2015. In particular, six Project 214 subs will be constructed for Turkey since 2015 till 2018. Most likely, Thailand will choose Germany too (6 non-nuclear subs of Project 206A to be decommissioned from German Navy in 2013-2014). South Korea will build six Project 214 submarines under license in 2012-2017. Italy plans to construct two Project 212A non-nuclear subs under German license in 2015-2106. Two Project 212 submarines are to be handed over to Israel in accordance with the contract tied in 2006. In addition, another sub of this type is to be delivered to the orderer somewhat in 2017 if all financing problems are settled. Greece declared intentions to build other two Project 214 non-nuclear subs under license in 2017-2018.

Russia keeps the second position in the rating (6 subs to the amount of $2.117 bln). In 2007-2010 Russia exported two non-nuclear submarines for $600 mln. Expectedly, volume of sales in 2011-2014 would be 4 subs (including 10-year leasing of a nuclear-powered sub) to the sum of $1.517 bln. It should be noted that the contract with Vietnam is to be implemented in 2013-2018.

Russia also has certain chances in India, Indonesia, Venezuela and some other markets.

France occupies the third position in the rating (3 non-nuclear subs for $1.224 bln). All submarines were delivered to orderers in 2007-2010. Deliveries under the current backlog of orders are scheduled since 2015. France realizes large-scale program with Brazil (4 Scorpene subs, delivery period is 2017-2021) and India (6 Scorpene, delivery period is 2015-2018).

Some countries are about to issue international tenders for non-nuclear submarines; they are Australia (6 subs), Bangladesh (1 sub), India (6 subs), Indonesia (2 subs), and Pakistan (3 subs). Philippines have recently declared intentions to buy non-nuclear subs as well.

According to the rating drawn by the World Arms Trade Analytic Center, the "new" category includes deliveries of new subs at the cost of at least $100 mln each, license programs, and decommissioned subs from exporter's navies upgraded to the level of new subs with extended lifetime (and which price is more than 50% of the cost of same-type new sub in the same period).