Saudi Arabia to Establish an Industrial Defense Complex

21 May, 2017

SAMI will be a major contributor in achieving the goals of Vision 2030: 50% of Saudi Arabia's military procurement spending will be localized

Prince Mohammad bin Salman with President Trump

Saudi Arabia has decided to build its own defense industry, as a part of national plan to modernize its economy. The Saudi Arabian Public Investment Fund (PIF) has announced last week the creation of a new national military industries company, called Saudi Arabian Military Industries (SAMI). According to the Saudi National Press Agency, SAMI complex will manufacture products and provide services across four business units: Air Systems, Land Systems, Weapons & Missiles and Defense Electronics.

From UAVs to Radars and Electronic Warfare

The Air Systems company will include maintenance and repair of fixed-wing aircraft as well as manufacturing and repair of unmanned air vehicles. The Land Systems company will manufacture and repair military vehicles. The Weapons & Missiles company will provide ammunition, and the Defense Electronics company will develop and build radar systems, smart sensors, communication systems and electronic warfare systems.

SAMI is a wholly government-owned, and aims to become one of the world’s top 25 defense companies by 2030. It will directly contribute around SAR 14 billion ($3.7 billion) to the Kingdom’s GDP in 2030, invest over SAR 6 billion ($1.6 billion)in research and development by 2030, and create over 40,000 jobs, mostly engineering and technical jobs. By partnering with universities, SAMI will provide students with apprenticeships and careers in technologies which were previously unavailable in the Kingdom.

Toward 50% Self-dependence

“SAMI will contribute to diversifying the Saudi economy for the 21st century by reducing dependence on oil, while protecting and strengthening national security,” SPA reported. Minister of Defense and Chairman of the Public Investment Fund, Prince Mohammad bin Salman bin Abdulaziz Al Saud (Above photo with President Trump this week),  said 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 localized.

“While the Kingdom is one of the world’s top five spenders on security and defense overall, only around 2% of our military procurement is domestic.” 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 it is aligned with the latest developments in the military industry.

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