How Saudi Arabia’s SAMI is driving the localization of the Kingdom’s defense industry

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The CEO of Saudi Arabia Military Industries, Walid Abukhaled, inspects the progress of business at one of the SAMI sector of aviation and space systems in Jeddah. (SAMI photo)
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Saudi Arabia Military Industries CEO Walid Abukhaled tours a manufacturing hub of the SAMI subsidiary Aircraft Accessories and Components Co., accompanied by company CEO Mazen Johar. (SAMI photo)
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The corvette HMS Diriyah was the second corvette to be delivered to the Royal Saudi Naval Forces by Spain's Navantia company last year under a joint venture with SAMI. (Supplied)
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Updated 21 August 2023

How Saudi Arabia’s SAMI is driving the localization of the Kingdom’s defense industry

  • Saudi Arabia Military Industries tasked with indigenization of half of Kingdom’s defense spending by 2030
  • SAMI aims to reduce Saudi Arabia’s reliance on foreign imports by building domestically and hiring locally

JEDDAH: Saudi Arabia’s defense industry is relatively new, dating back to the early 1970s. However, the country has made significant progress in recent years and is now considered a major player in the global market.

In the early years, the Kingdom’s defense sector was focused primarily on the assembly and repair of foreign-made weapons and equipment. More recently, the country has pursued self-reliance in military manufacturing.

This shift has been motivated by a number of factors, including the country’s vast oil wealth, its strategic location in the Middle East, and its desire to reduce its reliance on foreign imports.

One of the key drivers behind this burgeoning industry is the aerospace and defense company Saudi Arabian Military Industries, or SAMI — a wholly owned subsidiary of the Public Investment Fund established in May 2017.

SAMI’s goal is to localize 50 percent of the Kingdom’s defense spending by 2030. To achieve this, SAMI has established 12 joint ventures with the world’s biggest and best original equipment manufacturers.

These joint ventures have enabled SAMI to acquire the technology and expertise it needs to develop its own defense products.

“Through partnering with industry pioneers and experts, we’re making great strides towards achieving this goal,” SAMI told Arab News.

SAMI Chief Executive Officer Walid Abukhaled is briefed at one of the factories of the Intra Defense Technologies by company CEO Hamad bin Abdullah Al-Fawzan. (Photo: SAMI)

“Starting with creating opportunities for local talents and building products that are changing the game in the industry, SAMI is determined to support and empower those talents while fostering global partnerships simultaneously.

“In the five years since its establishment, SAMI has launched several innovative products such as Hazem, Mulhim, and Roaya. Those products have helped solidify Saudi Arabia’s impact and position in the defense industry globally.

“Consequently, we remain focused on developing and enhancing products by creating opportunities and building sustainable partnerships locally and internationally.”

Through its investment and partnership with Navantia, a Spanish state-owned shipbuilding company, SAMI successfully completed Al-Sarawat, a project involving five new Avante 2200 corvettes for the Royal Saudi Naval Forces with capabilities to handle air, surface, or subsurface targets.

Saudi Arabia's HMS Al-Jubail, seen arriving at the King Faisal Naval Base in Jeddah in this photo taken last year, is one of five corvettes produced in a joint venture signed in 2018 between SAMI and Spain's Navantia shipbuilding company. (Photo: Saudi Ministry of Defense)

HMS Al-Jubail and HMS Al-Diriyah are now equipped with Hazem, an integrated combat system that combines on-board weapons and sensors into one single system. It is the first combat management system to be developed by the Kingdom.

Mulhim, another battle management system developed by SAMI, is a battle management system for dismounted soldiers, stationary command centers, and mobile command centers, designed to enhance the combat capability of land formations.

Roaya, meanwhile, is a lightweight armored turret that can be armed with a 7.62 or 12.7 mm caliber machine gun or a 40 mm caliber grenade launcher.

Through partnerships with global leaders in the defense sector, SAMI has developed a range of armored vehicles, tanks, infantry fighting vehicles, fighter jets and drones, and has employed new technologies, such as artificial intelligence and autonomous vehicle technology.

SAMI has signed an agreement with UAE's EDGE group to produce the JAIS 4x4 armored personnel carrier in Saudi Arabia. (Photo: Edge Group)

Its success has not gone without notice. SAMI ranked among Defense News’ top 100 defense firms for the second year in a row, rising 19 places since last year to 79th. The company has set its sights on ranking among the top 25.

However, SAMI is not the only company contributing to the Saudi defense industry’s expansion. Others include Arabian Military Industries, Military Industries Corp. and SAMI Advanced Electronics Co., a subsidiary of the defense firm.

Much of the sector’s success is down to plentiful state investment. In 2022, Saudi Arabia ranked fifth in the world for military spending, after the US, China, Russia, and India, dedicating $75 billion to defense — accounting for 3.3 percent of global military spending.

The US led the ranking with $877 billion, or 3.5 percent of its gross domestic product. However, Saudi Arabia’s spending represents a higher share of its GDP, at 7.4 percent.

Investment in Saudi Arabia’s defense industry has multiple benefits for the country. Firstly, it helps to reduce the Kingdom’s reliance on foreign imports. This is important for national security, as it reduces the country’s vulnerability to supply chain disruptions.

Secondly, the growth of the defense sector creates high-skill jobs and opportunities for Saudi citizens. Finally, it helps to develop the country’s technological and manufacturing capabilities, leading to economic diversification and the growth of other sectors.

The boost in defense spending was first unveiled in 2016 when Crown Prince Mohammed bin Salman sat with veteran TV journalist Turki Al-Dakhil for his first-ever television interview, which covered a wide range of topics regarding the Kingdom’s future.

In this picture taken in April 2016, then Saudi Deputy Crown Prince Mohammed bin Salman, in an interview with Al Arabiya's General Manager Turki Al-Dakhil, unveiled the Kingdom's strategy to boost defense spending and develop a home-grown defense industry. (Photo courtesy of Al Arabiya/File)

“Is it reasonable that in 2014, Saudi Arabia was the largest fourth country in the world, and the largest third country in 2015 in terms of military spending; while we don’t have industry inside Saudi Arabia?” the crown prince asked during the interview.

“We have a strong demand that we should meet inside Saudi Arabia, which is the demand on the military industries.”

It was during this same interview that the crown prince alluded to establishing a holding company for military industries, “which is 100 percent for the government.” Thus, the idea of SAMI was born.

SAMI’s rapid growth since then has led to a significant increase in employment, with the company now boasting more than 3,000 employees, 84 percent of whom are Saudis, with plans to add a further 1,500 staff in the next quarter. The firm had just 63 staff in 2018.

With a view to develop local talent and expertise in the defense industry, SAMI has established a number of training and development programs to help Saudis acquire the skills and knowledge they require.

Aerospace, drone regulation and the space industry are other growing sectors in the defense market that have experienced increased investment. The government has signed contracts with several players in these fields, including Boeing, Lockheed Martin, Safran Helicopter Engines, ST Engineering, Airbus, and L3 Harris.

Its most recent signing was with Turkish company Baykar Tech to localize the manufacture of the Bayraktar Akinci drone and its component systems.

“We believe building local and global partnerships is a key factor in achieving SAMI’s goals, and being part of the Baykar Tech agreement is a huge step forward in doing so,” SAMI told Arab News.

Major General Attiyah bin Saleh Al-Malki, chief of the General Directorate of Local Manufacturing at the Saudi Ministry of Defense, and his delegation, get a briefing at the engineering hub of the Intra Defense Technologies, a local company that designs, develops, manufactures high performance and innovative unmanned aerial systems. (Intra Defense Technologies photo)

“Those partnerships help us provide local talents with the best opportunities to grow and learn.”

Indeed, to drive ahead the localization of defense jobs, SAMI has taken the lead with the Kingdom’s new Academy of Defense Industries, which will significantly contribute to SAMI’s goal of becoming the largest supporter of national human resource.

“Furthermore, having SAMI’s CEO, Eng. Walid A. Abukhaled, as the chairman of the new Academy of Defense Industries is how we can ensure those opportunities are given to the right people, as the sole purpose of this academy is to find, prepare, and introduce young talents to the defense industry sector,” SAMI added.


Saudi, Japanese culture ministers discuss cooperation

Updated 22 May 2024

Saudi, Japanese culture ministers discuss cooperation

RIYADH: Saudi Arabia’s Minister of Culture Prince Badr bin Farhan met in Tokyo on Tuesday his Japanese counterpart Masahito Moriyama.

The pair discussed enhancing cultural cooperation between the two countries within the Saudi-Japan Vision 2030.

Prince Badr said the Kingdom’s participation in Expo 2025 Osaka will offer opportunities to learn about the Saudi culture, history, and future vision.

Moriyama thanked Prince Badr for the Saudi ministry’s efforts in opening new horizons to enhance cultural exchange between the two countries.

Saudi deputy foreign minister offers condolences to Iran over death of president

Updated 22 May 2024

Saudi deputy foreign minister offers condolences to Iran over death of president

  • Ebrahim Raisi and Foreign Minister Hossein Amir-Abdollahian died on Sunday when their helicopter crashed in dense fog

RIYADH: Saudi Arabia’s deputy minister of foreign affairs, Waleed Elkhereiji, on Tuesday offered condolences and sympathy to Iran following the deaths of President Ebrahim Raisi and Foreign Minister Hossein Amir-Abdollahian in a helicopter crash.

Elkhereiji delivered the message, on behalf of Foreign Minister Prince Faisal bin Farhan, to the Iranian ambassador to the Kingdom, Alireza Enayatiat, at the nation’s embassy in Riyadh, the Saudi foreign ministry said. He was accompanied by Abdulmajeed Al-Samari, the deputy minister for protocol affairs, who similarly expressed his condolences.

The Iranian president, foreign minister and six other people were killed on Sunday when the helicopter they were traveling in crashed amid dense fog in mountainous terrain near the border with Azerbaijan.

Saudi Arabia, Japan leaders exchange views in video summit meeting

Japanese Prime Minister Kishida Fumio held a productive video meeting with Crown Prince Mohammed bin Salman on Tuesday. (SPA)
Updated 22 May 2024

Saudi Arabia, Japan leaders exchange views in video summit meeting

  • The crown prince expressed his desire to visit Japan as soon as possible to further strengthen ties with Japan
  • Kishida expressed his wishes for King Salman’s early recovery

TOKYO: Japanese Prime Minister Kishida Fumio held a productive video meeting with Crown Prince Mohammed bin Salman, the prime minister of Saudi Arabia, on Tuesday.
Kishida offered his best wishes for King Salman’s health, a gesture that was appreciated by the crown prince.
The crown prince expressed his desire to visit Japan as soon as possible to further strengthen ties with Japan. Kishida expressed his wishes for King Salman’s early recovery and said that he was also looking forward to strengthening the strategic partnership between Japan and Saudi Arabia, according to the foreign ministry in Tokyo.
As the two countries approach the 70th anniversary of their diplomatic relations, the Japanese prime minister expressed his desire to work even more closely with Saudi Arabia. He emphasized the shared goal of realizing peace and stability in the Middle East, a sentiment that was echoed by the crown prince. The leaders agreed to establish a “strategic partnership council” chaired by them to further strengthen bilateral relations.
Kishida expressed gratitude for Saudi Arabia’s stable supply of crude oil to Japan over the years. He also expressed his anticipation for Saudi Arabia to continue playing a leading role in stabilizing the global oil market, including through production increases, a sentiment that was appreciated by the crown prince.
Kishida added that he would like to cooperate in establishing a global supply chain for clean energy, such as hydrogen and ammonia, and promote cooperation in the field of mineral resources while using Japanese technology under the “lighthouse initiative” agreed between the two countries in July last year.
The crown prince said that Saudi Arabia would like to cooperate with Japan in various areas, including clean energy, and the Kingdom remained committed to providing a stable supply of crude oil to Japan.
Kishida expressed interest in creating business opportunities in Saudi Arabia, and making direct investments in Japan in a wide range of fields, including construction, power transmission, hydrogen, digital fields, information and communications technology, space, health, medicine, food and agriculture.
He also said that he would like to work together to achieve an early realization of the Japan-GCC free trade agreement. This agreement, once implemented, will significantly boost trade and investment between Japan and the GCC countries, creating new business opportunities and fostering economic growth. Negotiations are scheduled to resume soon.
The crown prince said that he welcomed the resumption of negotiations for the Japan-GCC free trade agreement and cooperation with Japan in fields beyond energy.
On peace and security, Kishida explained Japan’s diplomatic efforts and contributions in Gaza, including humanitarian aid and diplomatic initiatives. The crown prince said that he envisioned continued cooperation with Japan on diplomatic efforts to realize peace and stability, appreciating Japan’s active role in the region.
Kishida said that he would be pleased to hand over the symbolic “torch” of the expo to Saudi Arabia following Expo 2025 in Osaka-Kansai. This act symbolizes the continuation of the spirit of international cooperation and cultural exchange. He added that he would like to encourage cultural exchanges in entertainment, tourism, academia and football.
The crown prince said that Japan was an outstanding country in terms of culture and that he sought to strengthen cooperation with Japan in this area.
Read More: Saudi, Japan discuss ties at Vision 2030 business forum in Tokyo  

Saudi ministry says no truth in circulated information about livestock withdrawal periods and disease in humans

Ministry has emphasized that the withdrawal period for veterinary drugs varies depending on the active ingredient and the method
Updated 21 May 2024

Saudi ministry says no truth in circulated information about livestock withdrawal periods and disease in humans

RIYADH: Saudi Arabia’s Ministry of Environment, Water and Agriculture has said that information in the media on the subject of consumption of meat during the withdrawal period and its possible contribution to liver and kidney diseases in humans — which may include cancerous tumors — is inaccurate.

The ministry has emphasized that the withdrawal period for veterinary drugs varies depending on the active ingredient and the method of administering the dose, whether by injection or topical use. 

The ministry detailed that the scientific analysis in classifying drugs is based on infection-control vaccines which have a globally specified withdrawal period; viral diseases’ antibiotics, which have a precise withdrawal period; and external inflammatory diseases’ mastitis-abscess, which are subject to a temporary withdrawal period.

The ministry and the National Center for the Prevention and Control of Plants and Animal Diseases oversee slaughterhouses across the Kingdom to ensure that animals have not been injected with any veterinary products, by inspecting the animals post-slaughter.

This inspection covers more than 380 slaughterhouses across the Kingdom, supervised by more than 1,050 veterinarians who carefully examine over 22,000 carcasses daily to ensure they are safe and free of disease, injuries, or traces of injections, and confirm their suitability for human consumption.

The ministry has urged citizens and residents to have their animals slaughtered in official slaughterhouses that are subject to the supervision of the ministry and WEQAA.

The ministry has further indicated that, in cooperation with WEQAA, it monitors the use of veterinary products in animal health fields and conducts regulatory inspections at outlets selling veterinary products to ensure establishments abide by the necessary standards and requirements and clarify withdrawal periods to consumers.

Regulatory authorities in the Kingdom also play a meticulous role in approving veterinary drugs, with very high standards.

The ministry carries out field inspections of veterinary pharmacies, following specific requirements, to ensure proper drug storage conditions, expiration dates, and the extent of pharmacies’ commitment to precise prescription of medicines, in addition to providing accurate details to the consumer, including the withdrawal period, dosage, amount of time necessary for withdrawal, and method of administration, to raise awareness among breeders.

New world order must combat money laundering, says French senator Nathalie Goulet

Nathalie Goulet, French senator.
Updated 22 May 2024

New world order must combat money laundering, says French senator Nathalie Goulet

  • French politician stressed the need for sanctions, regulations to address financial crimes

RIYADH: Saudi Arabia plays an important role in the fight against money laundering, French politician Nathalie Goulet said during a forum this week in Riyadh on global uncertainties and their impact on the Middle East region.

Fighting money laundering would create a much more favorable business climate, Goulet said in an exclusive interview with Arab News.

The forum, held under the patronage of the King Faisal Islamic Studies and Research Center and in collaboration with the UN Alliance of Civilizations  and the Nizami Ganjavi International Center, covered key themes including the new world order, which will have to face up to several challenges that call for restrictive, even draconian, measures to weaken the action of parallel economies undermining development and peace processes around the world.  

The forum held in Riyadh covered key themes including climate change and its impact on the economies of the Middle East. (AN photo by Huda Bashatah)

Goulet, a senator for Orne since 2007 and a member of the Union of Democrats and Independents, said that money laundering was a global issue that impacted the stability of countries.

She said that money laundering represented 3 percent of gross world product, which amounted to more than $2,000 billion. “Not all money laundering is the financing of terrorism, but the financing of terrorism involves money laundering,” she told Arab News.

The issues of sustainable development, human rights and economic development are linked to the “parallel economy with money laundering, drug trafficking, human trafficking, plant trafficking, animal trafficking and, of course, corruption,” she said.

A few years ago, Crown Prince Mohammed bin Salman launched a campaign called ‘No Money for Terror.’ It was a first step, a very important first step, and one that was widely followed.

Nathalie Goulet, French senator

Stressing the need for regulations and frameworks to address the problem of financial crimes, Goulet said that migrant smuggling, which not only involved human beings but organ trafficking and drug smuggling, “brings in as much money as Finland’s national product.

“You have to put figures on it,” she added. “When you have figures, things take on a different consistency … So, it’s an absolutely necessary policy.

“Migrant smuggling alone is worth $7 billion. And you can see that the issue of migrant smuggling is disrupting our societies in Europe, in Italy, in France … (it) is driving up the extreme right.”

The fight against money laundering involved the intervention of a large number of international organizations, but it must comply with strict rules and the effective involvement of the legislative powers of governments and international organizations.

Speaking about efforts to combat corruption and money laundering, Goulet said: “Saudi Arabia has just taken a huge step forward. A few years ago, Crown Prince Mohammed bin Salman launched a campaign called ‘No Money for Terror.’ It was a first step, a very important first step, and one that was widely followed.”

Recently, Saudi Arabia entered a much more practical phase in the fight against corruption and money laundering. The Kingdom now fulfils almost all the obligations of international organizations, and the Financial Action Task Force and Egmont Group, which met a few days ago in Saudi Arabia.

Elaborating on practical measures that can be taken by countries and organizations, Goulet said that it was “important to hit traffickers in the wallet” through sanctions.

“So, we have all these sanctions, which are individual sanctions, we have collective sanctions, we obviously have all the United Nations sanctions on these issues, and then we have nations like France, which is now applying much tougher legislation on ill-gotten gains.”

Goulet added that it was important to “weigh up a number of criteria. For example, can we be a magnet, a hub for cryptocurrencies, but without trying to regulate them? Can we be a hub for ill-gotten gains from the misappropriation of resources in Africa and at the same time meet international criteria? Can we accept dirty money from Russia and at the same time fight for the liberation of Ukraine? And all this is ‘realpolitik.’”

The FATF’s grey list contains jurisdictions that have been placed under increased monitoring due to a country’s strategic deficiencies, which can significantly affect its business climate. The UAE, Goulet explained as an example, was recently taken off the list “because it has signed a number of conventions but remains on the European Parliament’s grey list of countries.”

If a country is on the list, which indicates that it does not comply with all the rules on money laundering, companies that have headquarters in that jurisdiction are more closely monitored and controlled and this significantly impacts the climate for doing business in.

The Kingdom became the first Arab nation to gain full membership of the FATF in 2019, in line with its efforts and financial and economic programs to achieve Vision 2030, which contributes to supporting the development of the national economy and enhancing the efficiency of the financial sector, one of the important objectives of the Financial Sector Development Program under the leadership of the Ministry of Finance.