Idex 2019: Rostec in talks with Saudi Arabia to produce Kalashnikovs in kingdom

Russian defence firm hopes to sign the agreement before the end of this month

Sergey Chemezov, CEO of Rostec. Victor Besa / The National.

Russian defence giant Rostec is in talks with Saudi Arabia to produce its Kalashnikov assault rifles in the country as the kingdom purses the localisation of military spending, the company's chief executive said.

The discussions right now are on percentage of localisation of content, which the Saudi Arabian government wants to be 90 per cent, Sergey Chemezov said at the five-day biennial International Defence Exhibition and Conference in Abu Dhabi.

Rostec hopes to sign the final agreement before the end of this month, he added.

The firm is looking to localise content of Kalashnikov in two countries, including the kingdom, Mr Chemezov said.

"We want it [the localisation percentage] a little bit less that’s why we are in process of discussions," he said.

Rostec is in the process of delivering Kalashnikovs and automatic grenade launchers among other products, which is the first stage of the agreement with Saudi Arabia, Mr Chemezov said.

The company's Middle East and North Africa sales were $6 billion last year and it has a big order book, he said.

Last week Rostec said Rosoboronexport, part of the Rostec State Corporation, launched a global marketing campaign to promote the AK200 series Kalashnikov assault rifles.

“Export permits for the newest Kalashnikov AK200 series assault rifles have been obtained. From now on, Rosoboronexport may offer its partners the AK200, AK203, AK204 and AK205 versions, which will make their international debut at IDEX 2019,” Rosoboronexport director general Alexander Mikheev said on the Rostec website.

"We expect strong demand for them in the Middle East and around the world. The Kalashnikov AK200 series rifles are our strategic product in the export area."

The newest Russian Kalashnikov rifles have "a considerable export potential”, said Sergey Abramov, industrial director of the Armament Cluster at Rostec.

In addition to the Middle East, the Russian armaments company is exploring the possibilities of cooperating with Brazil, the company’s chief executive Vladimir Dmitriev told the Russian Tass news agency at the Russian investment forum in Sochi on Friday, adding that negotiations with potential partners are underway.

"We want to cooperate with Brazil as we are interested in that market. Same as Russia, India and China, that is one of the fastest growing economies with a huge potential."

The global small arms market generated $8.37 billion in 2018 and is estimated to grow at a compound annual growth rate of 3.51 per cent during 2018-2023, according to researcher marketsandmarkets. Asia-Pacific is expected to have the highest growth rate during the forecast period, it said.