The Saudi Arabian Public Investment Fund (PIF) has announced the creation of a new, wholly government owned national military industries company. The new company will help the Kingdom reduce its dependency on foreign entities for ongoing military expertise and equipment, as well as creating new jobs and helping diversify the economy away from oil, writes Pat Lancaster.
Saudi Arabian Military Industries (SAMI) will manufacture products and provide services across four business units, including:
Air Systems: to include maintenance and repair of fixed-wing aircraft as well as manufacturing and repair of unmanned air vehicles;
Land Systems: including manufacturing and repair of military vehicles; Weapons & Missiles – including ammunition
Defence Electronics: to include radar and sensor systems, as well as communication and electronic warfare networks.
The company will establish companies through joint ventures with global original equipment manufacturers (OEMs), as well as cooperating with local military companies.
The 100% government-owned SAMI aims to become one of the world’s top 25 defence companies by 2030. It will directly contribute around SAR 14 billion ($3.8bn) to the Kingdom’s GDP in 2030, invest over SAR 6 billion ($1.6bn) in research and development by 2030, and create over 40,000 new jobs, many of which will be in the engineering and technical fields. By partnering with universities, SAMI will provide students with apprenticeships and careers in cutting edge technologies which were previously unavailable in the Kingdom.
In line with Vision 2030, SAMI will contribute to diversifying the Saudi economy for the 21st century by reducing dependence on oil, while protecting and strengthening national security. Deputy Crown Prince and Minister of Defence Prince Mohammad bin Salman bin Abdulaziz Al Saud, who also holds the office of Chairman of the Public Investment Fund confirmed: “While the Kingdom is one of the world’s top five spenders on security and defence overall, only around two per cent of our military procurement is domestic”. The Defence Minister emphasised that SAMI will be a major contributor in achieving the goals set out in Vision 2030, which states that 50% of Saudi Arabia’s military procurement spending will be localised.
SAMI’s four business units closely complement the Kingdom’s future military requirements and build on existing local capabilities. SAMI will establish companies through joint ventures with global original equipment manufacturers (OEMs), as well as cooperating with local military companies. SAMI will consider creating new business units, to ensure the company is aligned with the latest developments in the military industries sector.