SAMI plans to bring Saudi defence home

SAMI CEO Walid AbukhaledSaudi Arabia intends to be spending 50% of its military budget on equipment made at home by the end of the decade, the chief executive of the state-owned Saudi Arabian Military Industries (SAMI) said yesterday. Speaking at the Idex defence exhibition in Abu Dhabi, Walid Abukhaled said that his organisation was aiming to generate annual revenue of $5bn by 2030 as part of its drive to build more defence equipment inside the kingdom. By then SAMI, which was set up in 2017 by Saudi Arabia’s PIF Sovereign Wealth Fund to reduce the KSA’s dependence on imported weapons and military systems, wants to be among the biggest 25 defence manufacturers in the world.

Idex has seen SAMI rubber-stamp several deals that should help it attain that goal, including one with Lockheed Martin and another with Abu Dhabi’s EDGE Group. On Sunday, it announced that it had agreed to set up a 51-49 joint venture with the US-based aerospace and defence firm to  develop Saudi Arabia’s  capabilities in manufacturing and software technologies, systems integration, and the production, maintenance, and repair of rotary and fixed-wing aircraft, and missile defence systems.

JAIS Wheeled Armoured Personnel CarrierOn Monday, it then confirmed that it had entered into an agreement with EDGE subsidiary NIMR to ‘explore opportunities’ for the production of its JAIS 4×4 wheeled armoured personnel carrier vehicle in Saudi Arabia. Under the terms of the agreement, NIMR will license technology to the Kingdom to enable local manufacture and to develop Saudi Arabia’s supply chain capabilities. “In keeping with the goals of the Kingdom’s Vision 2030, we at SAMI are exploring areas of cooperation that help us build a sustainable and self-sufficient military industries sector in the Kingdom,” Abukhaled said.

Self-sufficiency is going to come at a cost, however, and the authorities expect to invest more than $20 billion in Saudi Arabia’s domestic military industry over the next decade as part of aggressive plans to boost local military spending, the head of the kingdom’s GAMI military industry regulator Ahmed bin Abdulaziz Al-Ohali predicted on Saturday. “The government has put a plan together that involves investing in excess of $10 billion in the military industry in Saudi Arabia over the next decade and equal amounts on research and development,” he said at the Abu Dhabi event. Riyadh also plans to increase military R&D spending from 0.2% to around 4% of total armaments expenditure by 2030.