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Saudi Arabia establishes new state-owned defence company

Saudi Arabia’s Public Investment Fund (PIF) established a new state-owned defence company – Saudi Arabian Military Industries (SAMI) – in a bid to continue growing its nascent defence industry and diversify its oil-dependent economy.

SAMI is a wholly state-owned company aiming to be among the 25 largest defence vendors in the world.

Under its Vision 2030 plan, Riyadh is aiming to source 50% of its defence supplies domestically. By 2030, SAMI hopes to directly create more than 40,000 jobs as well as contribute $3.7 billion U.S. to Saudi Arabia’s GDP and provide $1.6 billion to research and development initiatives.

Riyadh hopes that SAMI will also spur the creation of hundreds of small and medium-sized businesses and 30,000 indirect job opportunities.

SAMI aims to manufacture defence systems and offer maintenance, repair and overhaul (MRO) services.

To achieve these goals, SAMI will be organized into four divisions: Air Systems, which will manufacture drones and provide MRO services for fixed-wing aircraft. Land Systems, which will manufacture and repair vehicles. Weapons and Missiles, which will manufacture munitions. Finally, Defence Electronics, which will be responsible for radars, sensors, communications systems and electronic warfare systems.

Saudi Arabia’s efforts to build a domestic defence industry predate SAMI. It began with initiatives such as the Alsalam Aircraft Company, which was established in 1988 to provide MRO services for Saudi Arabia’s F-15s (it has grown to also support the Typhoon).

In recent years, Taqnia rose to partner with the likes of Antonov and Aselsan to collaborate and co-produce systems tailored for the Saudi military. The An-132D and SADEC are examples of this effort.

The King Abdulaziz City for Science and Technology (KACST) signed a deal with China Aerospace Science Technology (CASC) to manufacture unmanned aerial vehicles (UAV). KACST recently unveiled the Saqr 1 armed UAV. Like Taqnia and KACST, SAMI will also initiative joint ventures with foreign defence vendors.

Notes & Comments:

As with Taqnia and KACST, foreign defence vendors have the opportunity to penetrate the Saudi market through offsets and partnerships. Today, American, British, Turkish, Chinese and Ukrainian companies have familiarity with this specific aspect of the Saudi defence market – they will aim to expand upon these efforts using Alsalam, Taqnia, KACST and SAMI. For example, in February 2016 Taqnia and Lockheed Martin’s Sikorsky signed an agreement to explore helicopter production opportunities in Saudi Arabia.

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  • by John Rue
    Posted May 19, 2017 1:05 am 0Likes

    They have so much money , they can buy jet manufacturing companies. I will wait to see the day when Saudis grab tools and start producing spare parts for defence equipment. Same expats will be working in their factories.

  • by ali amanat
    Posted May 19, 2017 5:02 am 0Likes

    Good step taken by the saudi monarchy to achieve this goal , but first need to eshtablish a basic military industrial set up for the skilled manpower to take this challenge ,coz traditionally arab states are usually like to buy off the shelf such systems and maintained by the suppliers coz they dont have such cuture to achieve this goal should collaborate with pakistan, turkey to get their ppls trained in specific fieds to handle these works, local research and development should be emphasized, its a long way to go just establishing a company is not a solution, they should cooperate with china, russia, pakistan, and turkey if we are sincere even must be join hands with iran.

  • by Aaif khan
    Posted May 19, 2017 6:15 am 0Likes

    Is KSA going to produce jf17? I speculate that something big will come out in the upcoming meeting between Pakistan Trump and KSA.

    Is there any chances for Pakistan to get eurofighter/or additional f16? KSA could fund Pakistan.

  • by Aaif khan
    Posted May 19, 2017 1:13 pm 0Likes

    Iran? Where are you living? Leave aside KSA, even Pakistan cannot be partner with Iran. Iran interest doesn’t match with any of the Muslim countries. but Yes, there interest does match with Israel India and U.S.

    I see many pakistanis bashing them. They are pak’s allies. They fund for pak’s military procurement. I wonder, How can someone be so ungrateful?

  • by jamshed_kharian_pak
    Posted May 19, 2017 3:56 pm 0Likes

    if we are sincere, even must join hands with Iran. very well said Bhai

  • by Usman Aviationist
    Posted May 19, 2017 5:13 pm 0Likes

    Bilal bhai ,how can we relate this factory with possible KSA J-31 ToT?

  • by ahmria
    Posted May 19, 2017 10:44 pm 0Likes

    Zero chance of Pakistan buying eurofighters as the infrastructure and logistics chain is not set up and it would be prohibitively expensive to do it. Second hand F16s are more a possibility as some airforces start transitioning to the F35 and the fact that there is dedicated infrastructure set up for it in Pakistan.

  • by ahmria
    Posted May 19, 2017 10:48 pm 0Likes

    The Saudis will also have to change their attitude to work for this venture to truly work. A lot of the support for their jets are done by foreigners.

  • by Stan
    Posted May 20, 2017 1:11 pm 0Likes

    Iran is not the problem the Saudis and Gulf Monarchies are they are creating terrorism all over the worl and with friends like these who needs enemies and by the way the Saudis offered their airspace to Israelis to attack Iran …….

  • by Aaif khan
    Posted May 20, 2017 8:14 pm 0Likes

    Eurofigher: I ascertained that KSA may help in the matter of parts supply lines.

  • by Aman
    Posted May 20, 2017 11:51 pm 0Likes

    “They fund for pak’s military procurement.”

    Let me know then ?

    BTW latest news only for you

  • by Aman
    Posted May 20, 2017 11:52 pm 0Likes

    Yes he said right, I agree !!!!!

  • by Aman
    Posted May 20, 2017 11:53 pm 0Likes

    Good work man !!!!!

  • by Aman
    Posted May 20, 2017 11:54 pm 0Likes

    YEAH You’e Right !!!!

  • by Türker Demircan
    Posted May 21, 2017 1:38 pm 0Likes

    At the same time $110 billion U.S deal with Trump and celebrating this with sword dance…

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