Saudi Arabia to establish military industries firm

Saudi Arabia’s Public Investment Fund (PIF) will set up a new national military industries company, Saudi Arabian Military Industries (SAMI), state news agency SPA reported.

The wholly government-owned entity seeks to become one of the world’s top 25 defense companies by 2030.

SAMI will help attract foreign investment to the Kingdom, and directly contribute around SAR 14 billion to GDP.

The company is expected to invest SAR 6 billion in research and development, and create over 40,000 direct jobs, mostly in the technology and engineering sectors.

It will also generate over 30,000 indirect jobs and contribute to the creation of hundreds of small and medium enterprises (SMEs).

Saudi Deputy Crown Prince Mohammed bin Salman said SAMI will help achieve goals outlined under the Vision 2030 initiative, which aims to localize 50 percent of Saudi Arabia’s military procurement spending.

Although the Kingdom is one of the world’s top five spenders on defense and security, only 2 percent of its military expenditure is spent locally, the prince added.

The firm’s products and services will be offered in four main areas: Air Systems; Land Systems; Weapons and Missiles (including ammunitions); and Defense Electronics

SAMI will establish subsidiaries in each of these four fields through joint ventures with original equipment manufacturers (OEMs). 

It will also enter into joint ventures with major international military industry companies, and increase demand for local products and raw materials such as iron, aluminum, logistics and training services. 

Going forward, the company may also set up additional business units, it was reported.