Saudi Arabia concludes inaugural defence show with $7.9bn in deals

State-owned Sami also signed three financing agreements worth $1.86bn with local banks to fund future projects

Saudi Arabia concluded its inaugural World Defence Show, with deals worth 29.7 billion Saudi riyals ($7.9bn) signed as the kingdom continues to invest in its defence industry.

Launched by the kingdom's General Authority for Military Industries, or Gami, the show focused on “defence interoperability”. It received 80 military delegations and 65,000 visitors from 85 countries, Gami said on Thursday.

The Ministry of Investment on Monday signed 12 agreements with companies to bolster investment in its defence sector and localise military spending.

L3Harris Technologies, an aerospace and defence technology company, and South Korean video surveillance company Hanwha were among the signatories, the ministry said.

Raytheon Saudi Arabia also said on Monday it will manufacture components for its Patriot air and missile defence system in Saudi Arabia.

Other companies that signed pacts with the ministry include Leonardo, LigNex 1, Norinco, the Naval Group, Expal Systems, Steel Core Designs, Al Hokair Group, Milkor, MacJee, CBC and Glock.

The ministry did not specify the value of the deals.

“The networking, knowledge-sharing and commercial relationships established through the World Defence Show platform will spur a new era of investment and growth for Saudi Arabia’s defence and security industry,” said Gami governor Ahmad Al-Ohali.

The show, which brought together 600 defence and security exhibitors from 42 countries, “reflects the kingdom’s position as a global driver of collaboration, innovation and business opportunities”, he said.

As the regulator, enabler and licensor of Saudi Arabia’s defence sector, Gami said it worked with partners to review contracts announced at the show, conducting a detailed evaluation of technical specifications to ensure spending efficiency and operational readiness.

Saudi Arabia, one of the world's top defence spenders, aims to localise more than 50 per cent of its military expenditure by 2030.

The move is part of the Vision 2030 economic transformation agenda, which seeks to develop the kingdom's manufacturing base, create jobs and cut its reliance on oil revenue to drive its economy.

The country's sovereign wealth fund, the Public Investment Fund, created Saudi Arabian Military Industries (Sami) in 2017 as part of the broader push to develop its defence industry.

The company has already signed several joint venture and partnership agreements to bring international expertise and knowledge to the kingdom's defence manufacturing sector.

On Wednesday, Sami signed financing agreements worth 7bn riyals with Saudi banks.

The deals with Saudi National Bank, Banque Saudi Fransi and Gulf International Bank will help the company to fund future projects related to localisation, infrastructure development, acquisitions and working capital finance in the defence industry.

“These agreements will support our principal goals and future projects and will strengthen and broaden the scope of our operations,” Sami chief executive Walid Abukhaled said.

“This deal will also support PIF’s efforts through Sami in localising cutting-edge technology and knowledge, as well as in building strategic economic partnerships.”

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The networking, knowledge sharing and commercial relationships established through the World Defence Show platform will spur a new era of investment and growth for Saudi Arabia’s defence and security industry
Ahmad Al-Ohali, governor of Gami

Sami will continue to build partnerships with local and international lenders to finance “many of our projects in the near future” that aim to strengthen the defence industries sector in Saudi Arabia, chief financial officer Mater Alenazi said.

Sami, which operates through five main divisions, aims to generate $5bn in annual sales by 2025 as it looks to become one of the top 25 defence companies in the world.

The company expects to win new contracts in the kingdom, establish strategic partnerships with top industry players and acquire more local targets, Mr Abukhaled told The National last year.

Updated: March 10, 2022, 10:29 AM