SAMI’s new ‘Center of Excellence’ to be up and running by 2025

SAMI CEO Walid Abukhaled speaking to Arab News (AN)
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Updated 23 February 2023

SAMI’s new ‘Center of Excellence’ to be up and running by 2025

RIYADH: Saudi Arabia is set to create hundreds more jobs in the defense sector as Saudi Arabian Military Industries' new ‘Land System Center of Excellence’ becomes operational in the next two years, the company’s CEO told Arab News.

Speaking exclusively on the sidelines of the International Defence Exhibition in Abu Dhabi, Walid Abukhaled said the latest project by the company is designed to boost the defense industry in Saudi Arabia.

“What we announced is the design phase of the facilities. We have got board approval, we have got the support, and we are moving forward with our plan,” he said. 

The SAMI CEO said the latest center will focus on developing land system vehicles including four-by-fours, six-by-sixes, and eight-by-eights.

The center is part of the drive to make SAMI one of the top 25 defense companies globally by 2030 – an ambition that is increasingly likely thanks to the support from the leadership of the Kingdom, according to Abukhaled.

Last year, the firm joined forces with global firm Lockheed Martin to begin work on a Composites Manufacturing Center of Excellence to boost Saudi Arabia’s aerospace manufacturing capabilities.

During the interview, he expressed his gratitude to Crown Prince Mohammed bin Salman and said that his Vision 2030 is the driving factor behind SAMI’s growth. 

“Only after four years of operationalizing SAMI’s operation, we managed to be one of the top 100 defense companies in the world. We are number 96. Company number 100 is Embraer which was established in 1969. Our ultimate objective is to be a top 25 defense company by 2030,” said Abukhaled. 

He added: “We have a clear roadmap. The target is 2030, absolutely. And the challenge, can we beat it? Can we beat the date and make it happen before 2030?“ 

According to Abukhaled, the government, the military and all the armed forces are working together to help SAMI achieve this target. 

He further noted that SAMI has hired some of the best local talents, along with international experts who have first-hand knowledge about the defense sector, and this has played a crucial role in determining the success of the company in a very short period of time. 

The SAMI CEO added that the firm is eyeing 50 percent of localization in defense spending by 2030. 

He further pointed out that space is going to play a crucial role in enhancing the communication system in the defense sector. 

“Space will play a key role in communication. And under our advanced electronic divisions, we have communication systems, and that communication can happen through space, or through a normal waveform, ground to ground. So, we are working on how to communicate with satellites, and that will be under our advanced electronics division,” he said. 

Abukhaled revealed that SAMI is also working on new technologies like artificial intelligence and autonomous vehicle technology to further grow in the defense sector. 

“We have a chief technology officer. There is a function called emerging technologies, where the main objective and purpose is to look at the trends in technology and look 20 and 30 years ahead. So, absolutely there is a focus on advanced technology,” said Abukhaled. 

He added: “Autonomy is not an option any more. It is coming. That is the future. Airplane will fly without pilots. Ships will sail without a captain, and for land vehicles, you will not need drivers. The machines have proven that they can. They are more reliable and they do not make mistakes. Of course, you need to put the right option in them to make it reliable.” 

Sovereign investors in Middle East exploring emerging markets as geopolitical tensions rise, study says

Updated 13 sec ago

Sovereign investors in Middle East exploring emerging markets as geopolitical tensions rise, study says

RIYADH: Middle Eastern sovereign investors are following their global counterparts by prioritizing India and other emerging markets amid concerns over geopolitical tensions, an analysis said. 

In its latest report, Invesco, a US-based investment management firm, said that 88 percent of global wealth funds, including 100 percent of those in the Middle East region, consider the south Asian country the most attractive destination for investments among emerging economies.

Saudi Arabia’s Public Investment Fund has already expressed its appetite in emerging nations like India. In September 2023, the Kingdom’s Investment Minister Khalid Al-Falih expressed the possibility of establishing a sovereign wealth fund office in the Asian country, as well as investing in Indian start-ups that cater to the Saudi markets via venture capital funds.

Commenting on his firm’s report, Josette Rizk, head of Middle East and Africa at Invesco, said: “Amid an unpredictable macro environment, sovereign investors are recalibrating their portfolios, pivoting toward equities, private credit, and hedge funds.”

He added: “Emerging markets are gaining traction, with funds adopting a selective approach.” 

According to the report, wealth funds are looking to reshape their portfolios to reflect the new macro environment, with 27 percent and 50 percent in the Middle East planning to increase allocations to infrastructure over the next year. 

Invesco’s findings are based on the views of 140 chief investment officers, heads of asset classes, and senior portfolio strategists at 83 sovereign wealth funds and 57 central banks, who together manage $22 trillion in assets. 

Geopolitical tensions posing risks to economic growth

The analysis revealed that 95 percent of sovereign investors in the Middle East region opined geopolitical tension as the most serious risk to economic growth over the next 12 months. 

According to the report, inflation also remains a significant concern for these investors, with 43 percent of sovereign wealth funds and central banks globally and 68 percent in the Middle East expecting it to settle above apex banks’ targets. 

The study further noted that almost three-quarters of investors — 71 percent worldwide and 70 percent in the Middle East — anticipate interest rates and bond yields to remain in the mid-single digits over the long term, indicating a shift in expectations.

The rise of private credit

The report noted that private credit is also gaining popularity, with only 35 percent of sovereign wealth funds globally and 22 percent in the Middle East currently having no investments in private credit. 

Invesco opined that the appeal of private credit is driven by diversification from traditional fixed income and its relative value compared to conventional debts. 

The study said that the US is the most attractive market for private credit, with the country being rated the favorite option by 67 percent of the wealth funds globally and 71 percent in the Middle East. 

However, Invesco said there is a growing interest in emerging market private debt, as more than half of the respondents, including 58 percent in the Middle East region, believe there are unexplored opportunities in these countries. 

“Private credit is increasingly attractive to sovereign wealth funds, with many investing through funds and direct deals. 

Sovereign wealth funds in the region developed markets but are also exploring emerging markets while balancing defensive and opportunistic strategies to navigate the competitive landscape,” added Rizk. 

The implementation of AI

Invesco also noted that more than one-third of sovereign investors globally are using advanced technologies like artificial intelligence in their investment process. 

The vast majority — 93 percent worldwide and 100 percent in the Middle East — believe AI will eventually play a role in their organization. 

The rise of generative AI has prompted 66 percent of sovereign wealth funds and central banks globally and 83 percent in the Middle East to reevaluate their current AI strategies and explore new applications for this technology. 

The survey also found that half of these investors globally and 80 percent in the Middle East are confident that the implementation of AI can enhance returns. 

“Sovereign investors in the region are increasingly adopting AI in their investment processes, recognizing its potential to become an essential tool. While challenges exist, funds are investing in training and partnerships to overcome barriers,” noted Rizk. 

Growing importance of ESG

Invesco said that investors who took part in the study consider greenwashing to be one of the biggest challenges, as cited by 84 percent of the wealth funds worldwide and 94 percent in the Middle East. 

The report also found that sovereign investors are moving toward greater accountability, with 50 percent of accounts in the Middle East modeling and tracking their portfolios to combat climate change. 

“ESG (environmental, social, and governance) adoption continues to rise among the Middle East’s central banks, while SWFs refine their approach as the market matures,” said Rizk. 

He added: “Investors are increasingly recognizing climate risk as a material factor and aligning portfolios with global climate goals. Engagement with and allocation to renewables are preferred over complete divestment to drive the energy transition.” 

The allure of gold

The analysis revealed that gold is gaining appeal. In the last three years, 70 percent of the central banks in the Middle East region have increased allocations for the yellow metal. 

According to the report, central banks are bolstering and diversifying reserves, with 53 percent worldwide planning an increase in the size of their holdings and 52 percent planning additional diversification. 

Rising US debt levels have a negative impact on the global role of the dollar, according to 64 percent of respondents globally and 33 percent in the Middle East.

Some 18 percent of central banks, including 20 percent in the Middle East, believe that the position of the US dollar as the world reserve currency will be weaker within five years. 

“Amid global uncertainties, central banks in the region are strengthening and diversifying reserves. Gold’s appeal is growing due to concerns about rising US debt levels. Allocations to emerging markets are increasing as central banks seek to enhance returns and mitigate risks,” concluded Rizk. 

In June, a survey conducted by the World Gold Council noted that more central banks plan to increase their gold reserves within a year despite the ongoing macroeconomic and political uncertainties and rising gold prices.

According to WGC, 29 percent of the central banks globally expect to boost their gold reserves in the next twelve months, the highest level since the survey began in 2018. 

“Despite record demand from the official sector in the past two years and rising gold prices, many reserve managers remain enthusiastic about the yellow metal,” said Shaokai Fan, head of Central Banks at the World Gold Council, at that time. 

Flydubai says expansion plans have been hindered by Boeing delays

Updated 22 July 2024

Flydubai says expansion plans have been hindered by Boeing delays

DUBAI: Budget carrier flydubai’s fleet expansion plans have been hit by delays to Boeing’s aircraft delivery schedule, the Dubai airline said on Monday.
Flydubai said it is “evaluating its route development plans and potential frequency revision across the network due to a lack of new aircraft deliveries over the next few months.”
The statement added that Boeing’s delivery delays in recent years have placed substantial pressure on the airline and its ability to plan for its projected growth in the wake of strong post-pandemic demand for travel.

Saudi Arabia, Egypt to boost energy cooperation after high-level meeting

Updated 22 July 2024

Saudi Arabia, Egypt to boost energy cooperation after high-level meeting

  • Ministers discussed various aspects of cooperation between the two countries

RIYADH: Saudi Arabia and Egypt are set to boost energy cooperation following a meeting between top officials to expand ties in petroleum, gas, electricity, renewable energy, and hydrogen. 
On July 21, Saudi Minister of Energy Prince Abdulaziz bin Salman met with Egypt’s Minister of Petroleum and Mineral Resources Karim Badawi and Minister of Electricity and Renewable Energy Mahmoud Esmat at his ministry’s headquarters in Riyadh. 
During the meeting, the ministers discussed various aspects of cooperation between the two countries, aiming to align their efforts with the shared visions of their leaderships and the ambitions of their peoples, according to a statement from the Saudi Energy Ministry. 

National Housing Co. partners with Korean firm Naver to boost smart city solutions in the Kingdom  

Updated 22 July 2024

National Housing Co. partners with Korean firm Naver to boost smart city solutions in the Kingdom  

RIYADH: The Saudi real estate sector is set to embrace advanced technologies after the National Housing Co. partnered with Korean tech firm Naver Corp. to enhance smart city solutions. 

The collaboration, formalized in the presence of Housing Minister Majid Al-Hogail, aims to integrate Digital Twin technology, utilizing Naver’s advanced cloud system.  

The technology mirrors real-world entities in a virtual environment, supporting real-time decision-making through data analysis, prediction, and optimization. It will be cloud-based, with a focus on three-dimensional digital modeling. 

This move aligns with Saudi Arabia’s Vision 2030 goals, aiming to use this technology for urban planning and flood predictions while advancing smart city development.

The integration of Digital Twin technology is part of the Kingdom’s broader strategy to modernize its real estate sector and adopt cutting-edge solutions to enhance urban management and infrastructure efficiency. 

Minister Al-Hogail highlighted the significance of this partnership, stating on X that the deal opens the doors for innovation in digital solutions.

“Together, we achieve strategic visions for the municipalities and housing sectors in our relentless pursuit of sustainable smart cities,” he said.

This deal builds on Naver’s initial entry into the Middle East and Saudi markets in 2023 by establishing a contract with the ministries of investment and housing to use their systems.

The ambitious roadmap also includes amalgamating advanced technologies such as AI, robotics, and cloud solutions. 

The company emphasized the platform’s open-ended architecture, fostering collaborations with local Saudi and South Korean entities.

Abdullah Al-Ghamdi, the president of the Saudi Data and Artificial Intelligence Authority, visited the firm’s site in May, denoting the establishment’s long-standing relationship with the Kingdom.

During the meeting, potential collaborations between the two entities were discussed, as SDAIA is responsible for strategy, research, and development in the AI, data, and smart city sectors in Saudi Arabia. 

Officials from other major Saudi institutions, including the Ministry of Communications and Information Technology, the National Information Center, and the National Data Management Office, have also paid visits to the site to experience the company’s technological advancements and discuss collaborative opportunities, a release on the Korean entity’s website revealed.

This comes after Naver became part of the “One Team Korea” consortium in November 2022. The partnership sought to secure Saudi projects under the patronage of South Korea’s Ministry of Land, Infrastructure, and Transport.

Oil Updates – prices rise as investors look for signs US rate cuts to begin

Updated 22 July 2024

Oil Updates – prices rise as investors look for signs US rate cuts to begin

TOKYO: Oil prices rose in early trade on Monday as investors keep a lookout for signs of a rate-cut cycle expected to begin as soon as September, according to Reuters.

Brent crude prices were up 48 cents, or 0.57 percent, at $83.10 a barrel by 2:35 a.m. Saudi time, and US West Texas Intermediate crude futures rose 42 cents, or 0.52 percent, to $80.55.

“Since the June FOMC meeting, inflation and labor market data have signalled that disinflation and labor market rebalancing are in place, which we expect will allow the Fed to begin its interest rate cutting cycle in September,” ANZ Research said in a note.

The US Federal Reserve will next hold a Federal Open Market Committee meeting on interest rates on July 30-31, at which investors expect the Fed to keep the rates unchanged, while looking for any signal of a cut coming later in the year.

On the political front, US President Joe Biden abandoned his reelection bid on Sunday under pressure from fellow Democrats and endorsed Vice President Kamala Harris as the party’s candidate to face Republican Donald Trump in November.

Slower-than-expected economic growth of 4.7 percent for China in the second quarter sparked concerns last week over the country’s demand for oil and continues to weigh on prices.

On Sunday, China released a policy document outlining known ambitions, from developing advanced industries to improving the business environment, with analysts spotting no sign of imminent structural shifts in the world’s second-biggest economy.

The 60-point document’s publication follows last week’s closed-door meeting of the Communist Party’s Central Committee that takes place roughly every five years.