Published: Thu, May 18, 2017
Worldwide | By Gretchen Simon

Saudi Arabia sets up new military industries firm

The kingdom of Saudi Arabia's Saudi Public Investment Fund (PIF) has announced the launch of state-owned arms manufacturing company, Saudi Arabian Military Industries, or SAMI.

The new company, called Saudi Arabian Military Industries, will focus on manufacturing and fix in four units: aircrafts, ground vehicles, weapons and missiles and defense electronics, the kingdom's Public Investment Fund said in a statement.

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. SAMI will consider creating new business units, to ensure the company is aligned with the latest developments in the military industries sector.

To fulfill the agenda of this company, Saudis will be trained, it added.

But previous year the powerful deputy crown prince and defence minister, Prince Mohammed bin Salman, launched his Vision 2030 reform scheme to boost jobs and revenue to prepare for a future with lower oil income. These capabilities will be developed in part through partnerships with foreign defense companies and local firms, it said. As well, the company will "repair fixed-wing aircrafts" and "manufacture and fix unmanned air vehicles".

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The company will initially manufacture products and provide services across four business units: Air Systems; Land Systems; Weapons & Missiles (including ammunition); and Defense Electronics.

SAMI will establish companies through joint ventures with global original equipment manufacturers (OEMs), as well as cooperating with local military companies.

According to the Saudi fund, the company is expected to create over 40,000 jobs in the spheres of technology and engineering, as well as more than 30,000 indirect employment opportunities.

"The company will seek to be a key catalyst ... to localize 50 percent of total government military spending in the Kingdom by the year 2030", up from just 2 percent now, bin Salman was quoted as saying by state news agency SPA.

The company's strategic objective is to reach among the top 25 global military industrial giants by 2030, making Saudi Arabia a strong partner in the global military industry.

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