Saudi Arabian Military Industries (Sami) and South Africa's Paramount Group signed a defence collaboration agreement, the latest in the series of pacts as the kingdom develops its nascent domestic defence sector in a bid to localise its massive annual military spending.
The state-owned Sami and privately-held Paramount Group will collaborate on developing technologies and capabilities across land, sea and air domains, as well as system integration, the companies said on Wednesday.
"This will contribute significantly to further enhancing the capability of Saudi Armed Forces and increasing local content, in addition to creating new job opportunities and training for Saudi youth," Andreas Schwer, chief executive of Sami, said.
Saudi Arabia, one of the world's top defence spenders, is seeking partnerships with international counterparts with an aim to localise 50 per cent of its military spending by 2030 from about two per cent currently. The plan is part of the country's Vision 2030 to develop a local manufacturing sector, as it seeks to diversify from oil and create jobs. Sami has already signed several joint ventures and partnerships agreements to bring international expertise and knowledge to the kingdom's defence manufacturing sector.
“Saudi Arabia is important to Paramount Group as much of the technology that we have created over the years has been developed with the Middle East in mind," Ivor Ichikowitz, chairman of Paramount Group, said.
Mr Ichikowitz told The National in February that Paramount is seeing "good progress" in its negotiations with Gulf customers, including the UAE and Saudi Arabia, in terms of setting up defence production facilities and expects to finalise talks in 2019.
The company expects to sign up to seven agreements this year with governments in the Gulf, Middle East and North Africa, spanning air, land and naval equipment sales, Mr Ichikowitz said at the time.
Paramount, Africa's largest privately owned defence company, which makes military vehicles, aircraft, ships, and weapons systems, signed a contract with the UAE government as launch customer for its Mbombe 4 armoured vehicles that are expected to enter service this year.
Sami's agreement with Paramount is the latest in a flurry of deals. Earlier this week Sami agreed to form a joint venture with South Korean conglomerate Hanwha Group to produce and sell munitions in the kingdom.
Last month, the Saudi firm and French aerospace company Figeac Aero said they are forming a joint venture to build military and commercial plane parts in the kingdom.
