Components for Lockheed Martin's Terminal High Altitude Area Defence (Thaad) missile system sold to Saudi Arabia will be made locally to develop the kingdom’s defence industry, an official announcement said.
Lockheed Martin will invest more than $1 billion to localise its military manufacturing in Saudi Arabia, Ray Piselli, its vice president of international business, told broadcaster Asharq Business.
Raytheon Technologies, another US defence contractor, said it planned to ship Patriot missile parts production to Saudi Arabia, Asharq Business news website reported on Monday, quoting Thomas Laliberty, the vice president of land warfare and air defence at Raytheon Missiles & Defence.
The announcements were made at Saudi Arabia’s inaugural World Defence Show, where Riyadh this week is making efforts to boost its manufacturing.
Under the agreement with Lockheed, interceptor launchers and canisters for Thaad batteries will be manufactured in Saudi Arabia, the kingdom’s military industry regulator and the US defence group said in a joint statement.
They did not give a detailed timetable for production.
Saudi Arabia, one of the biggest importers of arms, wants to localise more than 50 per cent of defence equipment and services expenditure by 2030 as part of a broad economic plan.
That means arms companies and their governments must weigh doing business with the kingdom’s defence industry given the sensitivities of transferring production to another country.
“This announcement will significantly boost global and regional security while supporting job creation and economic prosperity in Saudi Arabia,” Joseph Rank, chief executive for Lockheed Martin in Saudi Arabia and Africa, said in the statement.
Saudi Arabia is one of several countries to use the Thaad system that can intercept short- and medium-range ballistic missiles at higher altitudes than older systems such as the Patriot batteries used across the region.
Thaad was used in combat by the UAE this year, when it destroyed missiles fired by Iranian-backed Houthis. The rebels targeted both countries for their support of Yemen's internationally recognised government.
The sale of US military equipment to Saudi Arabia has been a contentious political issue in Washington under both the Trump and Biden administrations, largely because of the situation in Yemen, where a Saudi-led coalition is fighting the Houthis.
Saudi Arabian Military Industries also unveiled plans to produce a Saudi-made drone and to establish one of the world's biggest munitions factory, the kingdom's state TV Al Ekhbariya reported, quoting chief executive Walid Abu Khaled.
Mr Abu Khaled was speaking on the sidelines of the first day of the World Defence Show held in Riyadh until March 9.
Sami, as the company is known, is owned by the Saudi sovereign Public Investment Fund (PIF).
The World Defence Show is an interactive platform for governments and industry thought leaders to help shape the future of defence.
In its first edition of the biennial event this year, the focus is on interoperability between systems.
The high-level invitation-only forum hosted hundreds of influential military and political figures.
UAE defence companies participated with a pavilion, reflecting the historical and strategic relationship the UAE has with Saudi Arabia.
UAE’s Tawazun Economic Council participated through the Emirates Defence Companies Council (EDCC), leading the exhibitors.
Tawazun expressed appreciation to Saudi Arabia's General Authority for Military Industries for organising the show and ensuring Emirati participation.
"This exhibition allows the UAE to showcase and promote advanced defence solutions and technology," said Matar Al Romaithi, chief officer of the economic development unit at Tawazun and chairman of EDCC.
"Additionally, WDS will serve as an important gathering place for participants. EDCC will lead our defence contractor delegation and assist in promoting UAE-made products and services, facilitating engagement between interested international parties and our UAE defence contractors," he said.
"We wish to show how far the UAE's industrial sector has progressed and deepened collaboration and to form relationships with other international defence companies," said Anas Naser Al Otaiba, general manager of EDCC.
Bloomberg and Reuters contributed to this report
