ASSOCHAM May, 2011

Private Security Industry : Opportunities & Challenges

Global Private Security Industry

Global Private Security Services Industry is estimated at USD 150 Billion (2009) Projected growth 7.5% pa. Estimated Size USD 200 Billion by 2012 North America is the largest market ~42% share followed by Western Europe ~ 26% share Asia Pacific Region contributes 12% - 13% of World Market Growing at 14% pa. Asia Pacific (ex Japan) shall comprise of ~ 20% of World Security Market by 2017.
Market Segment Activities
Manned guarding

9% 17%

100% = US$150bn
Services Electronic security services

46%

Cash handling

28% Manned guarding Alarm monitoring

2

Equipment manufacturing

Cash handling

Other
SIS Group activities

Locks Perimeter / entrance security Secure storage Cash automation Electronic surveillance systems Systems integration and installation

Indian Private Security Industry

Indian Private Security Industry is estimated at USD 3 Bn / INR 13,500 Crs (2010) Growing at ~ 20% pa (2005 2010). Projected growth 2011 2015 ~ 17% Man Guarding constitutes +60% of the sector. Followed by ESS at +25% Man Guarding : ESS ratio changing rapidly Highly fragmented. Top 10 Players hold < 25% of the market. Estimated to be amongst the Top 10 security markets in the world by 2020. (~ 4% of global market)
8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 2005 2007 Manned guarding 2010E Cash services ESS 2012E Consulting, Training Others 2015E 26.8% 1.1 1.8 21.7% 21.5% 3.2 0.1 0.9 0.2 1.9 24.0% 31.6% 18.8% 15.1% 21.4% 4.7 0.1 1.5 0.4 14.9% 2.7 4.1 18.8% 24.8% 0.8 7.5 17.0% 0.2 2.4

Demand Drivers

Outsourcing

Privatisation

Consolidation

Sector trends

Drivers

Wealth disparity

Terrorism/ crime

GDP: on a strong rebound

Increase in demand for Security

Cash cycle

Current economic environment

Socio-economic trends

Risks

Litigation and regulation

Competition

From Public Administrations

Unionisation

Cost pressure

From Peers

Challenges : Growth Pangs

Acute shortage of good quality manpower Availability & Attrition Inconsistent service delivery supervisory & management limitations Lack of segment specialisation understanding, capability development & leverage Sub optimal use of technology over dependence on manpower Compliance concerns

Coordinated Action : Need of the hour

Distinction between unskilled worker and trained security personnel Better Pay to attract better talent Talent retention Fair employment practices & career progression Thrust on training. Industry Standards - Standardised content Third Party Certifications Sector Skills Council Integrated Security Programmes ManTech Solutions Review of Regulation (PSARA) National License, Scope to provide armed security service Innovation Static Guarding to ESAS

Thank Thank You You