Saudi Arabia and French aerospace company Figeac Aero are forming a joint venture to build military and commercial metallic plane parts in the kingdom amid its push to localise military spending.
State-owned Saudi Arabian Military Industries (Sami) and Figeac Aero plan to set up a metallic aerostructures manufacturing plant in Riyadh or Jeddah, Sami said on Sunday.
Sami will be the majority shareholder in the new company and the project will run for two and a half years. The Saudi company did not say what would happen to the project after that time.
"This project represents the backbone of the aircraft manufacturing industries and will further strengthen our homegrown capabilities," said Andreas Schwer, chief executive of Sami.
"By building a solid foundation for indigenous manufacturing, we will be able to generate significant cost savings while ensuring a safer and more secure future for the kingdom."
The project to produce plane parts in the kingdom is part of its broader plans to develop its local manufacturing industry as it seeks to wean the economy off dependence on oil.
Saudi Arabia's sovereign wealth fund, the Public Investment Fund, created Sami in 2017.
As part of the country's Vision 2030 plan for economic diversification, Sami's mandate is to localise more than half of the kingdom’s total military spending, up from about 2 per cent.
"Our future joint venture partnership with Sami will enable Saudi Arabia to develop its own manufacturing capabilities and build their own aeronautics industry and associated supply chain," said Jean-Claude Maillard, chairman and chief executive of Figeac Aero.
The plant will be managed and operated by Saudi engineers and technicians.
The venture will have aerospace certification to provide parts, including commercial aircraft wings made from titanium, to customers.
It will also support Sami’s other aeronautics joint projects.
Sami is planning multibillion-dollar investments in 25 to 30 joint ventures over the next few years to build competencies in shipyards, aircraft assembly lines and other infrastructure, Mr Schwer told The National in February.
It has set a target of reaching $10 billion in sales by 2025.
The UAE has set up a regional centre for making composite commercial plane parts in Abu Dhabi as it also seeks to become a part of the global aerospace supply chain and diversify its economy.