Riyadh Review

Military industries firm launched

Prince Mohammad ... Sami will be a major contributor in achieving goals

The Saudi Arabian Public Investment Fund (PIF) has announced the creation of a new national military industries company, wholly owned by the government, which will form a key part of Vision 2030. 

Saudi Arabian Military Industries (Sami) will manufacture products and provide services across four business units: air systems – which includes maintenance and repair of fixed-wing aircraft as well as manufacturing and repair of unmanned air vehicles; land systems – which includes manufacturing and repair of military vehicles; weapons and missiles – including ammunition; and defense electronics – which includes radars and sensors as well as communication systems and electronic warfare, said a statement from PIF.

Sami aims to become one of the world’s top 25 defence companies by 2030. It will directly contribute around SR14 billion ($3.73 billion) to the kingdom›s gross domestic product (GDP) in 2030, invest over SR6 billion ($1.59 billion) in research and development by 2030, and create over 40,000 jobs, many of which will be in the engineering and technical fields, it said.

By partnering with universities, Sami will provide students with apprenticeships and careers in cutting edge technologies which were previously unavailable in the kingdom, it added.

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.

Prince Mohammad bin Salman bin Abdulaziz Al Saud, Deputy Crown Prince, Minister of Defense and chairman of PIF, said: “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.”

He emphasised that Sami will be a major contributor in achieving the goals set out in Vision 2030, which states that 50 per cent 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. It will establish companies through joint ventures with global original equipment manufacturers (OEMs), as well as cooperating with local military companies.

 To begin with, Raytheon Company, a technology and innovation leader specialising in defence and cybersecurity solutions, joined forces with Sami to launch its new company in the kingdom.

The new entity, Raytheon Arabia, which will have its base in capital Riyadh, is set to focus on implementing programmes that create indigenous defence, aerospace and security capabilities in the kingdom.  

As per the MoU, Raytheon and Sami will co-operate on defence-related projects and technology development.

The deal will also cover in-country programme management, supply and sourcing capabilities, improved customer access and centralised accountability.

The agreement will enable continued global growth for Raytheon in key market areas such as Air Defence Systems, Smart Munitions, C4I Systems and Cyber Security of Defence Systems and Platforms. This partnership will also contribute directly to Saudi Arabia’s localised defence ecosystem with regional expert capabilities, and will provide a long-term foundation for its economic development, they stated.