In the presence of industry giants around the world, local companies, and hundreds of leaders in the government, military, security, and private sectors, the Saudi capital, Riyadh, is preparing to receive the global event “The World of Defense & Security” in the first edition of the “International Defense Exhibition”.
The exhibition took place under the patronage of HRH the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz.
The exhibition has announced the reservation of all spaces and the completion of preparations for the launch of the first edition of the exhibition in Riyadh.
A day before the start of the exhibition, which is organized by the General Authority for Military Industries (GAMI) from March 6-9, 2022, the International Institute for Strategic Studies (IISS) will organize the “Riyadh Defense Forum” as a preparatory event for the first edition of the World Defense Exhibition.
The forum hosts a group of military and political figures from around the world to discuss the latest trends in the sector that will shape the future of defense and security.
The event will be followed by the “Riyadh Salute” event, where international military aircraft will fly over Riyadh to perform an amazing air show.
The World Defense Show will begin its first day with an opening ceremony featuring live demonstrations of the capabilities of interoperability between defense and security systems in all fields, in the presence of thousands of visitors and hundreds of industry giants including Lockheed Martin, Boeing, General Dynamics, Navantia, BAE Systems (Aerospace Company), L3Harris Technologies, and Norinco (China North Industries Corporation).
More than 450 companies from about 37 countries will participate in displaying the latest defense and security industry technologies across land, sea, air, space, and information security, in an ideal environment for communication, innovation, and stimulating partnerships.
The Kingdom will showcase its local capabilities in the security and defense industries, through the Saudi pavilion, with the wide participation of military and government agencies and local companies.
The list of participants will include the Saudi Ministry of Defense – the main partner of the exhibition, the Saudi Ministry of Interior, the Saudi Ministry of National Guard, the Saudi Presidency of State Security, the Saudi General Authority for Military Industries, and several government agencies.
This is in addition to the participation of a large number of national companies such as the Saudi Military Industries Company (SAMI) – the strategic partner of the exhibition and several Saudi companies, which will provide great opportunities to communicate with companies and investors from around the world to establish partnerships, transfer technology and develop local competencies.
This supports the goals of the Kingdom’s vision to localize more than 50% of the Kingdom’s military spending by 2030.
Andrew Percy, CEO of the World Defense Exhibition, said that the level of demand for participation in the exhibition reflects the great global industry confidence in the defense and security market in the Kingdom.
Percy added that the first edition of the World Defense Exhibition will be an ideal opportunity for industry leaders from around the world to learn about the military industries system in Saudi Arabia and its strategic directions.
The first edition aims to be a meeting point for the main partners in the industry through communication programs designed specifically to stimulate partnerships and deals between buyers and suppliers at all levels in the supply chain.
The exhibition will be unique worldwide with a set of advantages, foremost of which is the preparation of an aircraft runway with a length of 3 km and a width of 45 meters for live air shows, and an interactive command and control center to showcase the capabilities of operational compatibility systems, which are one of the most important trends in the global defense and security industry.
Registration to attend the exhibition has been made available for defense and security professionals through the International Defense Exhibition website, and all international participants who are issued permits after approval of their applications will receive a free multiple-entry visa to the Kingdom of Saudi Arabia, valid for one year, to advance progress in the defense and security industry.
In a report, Ernst & Young (EY) Consulting expected the contribution of the World Defense Exhibition, which is organized by the General Authority for Military Industries, to enrich the local economy of the Kingdom of Saudi Arabia by providing thousands of job opportunities, in addition to achieving an economic contribution of SAR 700 million.
The World Defense Exhibition will provide unprecedented opportunities for international networking, collaboration, and partnerships.
It represents a global platform for operational compatibility between air, land, sea, space, and information defense systems, as the exhibition organized by the General Authority for Military Industries, brings together the world’s defense and security industry leaders under one roof to enhance the link between global manufacturers and the defense and security system in the Kingdom.
A Pioneering Event that Supports the Future of the Industry in the Kingdom
The International Defense Exhibition will contribute to achieving the goals of the Kingdom’s ambitious Vision 2030 aimed at economic diversification, creating new job opportunities, and developing national competencies from outstanding male and female students in the fields of science, technology, and engineering.
The exhibition aims to support economic growth in the Kingdom through a set of distinctive programs that stimulate communication and interaction of participants, including programs that help entrepreneurs from local companies increase the volume of their business and others that enhance partnership building and provide innovative technical solutions.
An Unprecedented Opportunity to Strengthen Partnerships
The International Defense Exhibition is distinguished by its future outlook for the defense and security industry locally and globally, which will depend to a large extent on operational compatibility.
Operational compatibility enhances the position of the Kingdom of Saudi Arabia as a major center for the defense and security industries in the world, taking advantage of its geographical position among global supply chains and its position as a leading global economic power.
The exhibition provides tremendous opportunities for all stakeholders in the sector locally and internationally, including manufacturers, government agencies, and investors, to participate in a market that seeks to localize a promising sector.
This is done by enhancing communication and cooperation between the participants through the establishment of special events such as the “Partners Meeting” program and the “Meeting Investors and Companies looking for Funding”.
Given the great demand for space reservations at the exhibition, the General Authority for Military Industries recently announced the addition of an area of 14,500 square meters to the exhibition halls to allow more international companies to participate, display their products and take advantage of the exceptional opportunities offered by the World Defense Exhibition.
The Kingdom’s Vision 2030 … An Unprecedented Development for the Saudi Army
Since the twenty-fifth of April 2016, the Kingdom of Saudi Arabia has been experiencing a wide-ranging economic and social movement, after the Custodian of the Two Holy Mosques King Salman bin Abdulaziz launched The Kingdom’s Vision 2030.
“The Kingdom’s Vision 2030” is the largest economic and social plan aimed at restructuring the Saudi national economy and developing society through many basic plans and pillars.
The localization of military industries is a major focus within these plans and pillars, as the Kingdom has realized that the positive impact of this localization is not limited to merely reducing military spending.
The Kingdom occupies an advanced position in military spending, as it occupies third place in the world in 2015 and fourth in 2016 according to the estimates of the International Peace Research Institute in Stockholm.
Taking into account that less than (2 percent) of this spending is produced locally, the local military industries sector is limited to (7) companies and two research centers only.
There are many goals that the settlement process achieves, including:
Achieving the requirements of Saudi national security by providing all the needs of the Saudi armed forces at any time without relying on the outside, represents a deterrent to any attempt to prejudice the security and stability of the Kingdom or threaten its interests.
Maximizing the utilization of local raw materials used in these industries, and the resulting economic returns.
Facing one of the most prominent societal problems, which is the problem of providing more job opportunities for Saudi youth, as these industries would provide thousands of job opportunities and the related development of human capacity building programs capable of dealing with this specialized industrial sector.
Contributing to the Kingdom’s GDP by about 14 billion riyals with the possibility of exporting to countries around the world and the consequent realization of additional resources for the general budget.
Hence, the vision aimed to localize more than (50 percent) of military spending by 2030, starting to work on starting to develop some less complex industries such as spare parts, armored vehicles, and ammunition.
Then continue this path to the settlement of most of them, then move to the circle of more complex industries such as the military aviation industry.
All this was done by pumping more direct investments into this sector, as well as by building strategic partnerships with leading companies, to transfer knowledge and technology and localize experiences in the fields of manufacturing, maintenance, research, and development, while working to establish specialized and integrated industrial complexes that include the main activities in this sector.
To achieve this, it required building national institutions that will bear the burden of this responsibility and work to ensure their success, which has already been achieved through structural work on two main pillars:-
The first: the establishment of the General Authority for Military Industries… as an important tributary in the localization of industry
The General Authority for Military Industries was established by a decision of the Saudi Council of Ministers issued in August 2017, to work to strengthen the national military industrialization capabilities, seeking to localize this sector, and making it an important tributary to the national economy by providing job opportunities for Saudi youth, and advancing development through Enhancing non-oil revenues.
The authority is the legislator for the military industries sector in the Kingdom, and is responsible for its development and monitoring of its performance, by achieving 5 main national priorities; are represented in the following: raising military readiness, enhancing strategic independence, enhancing joint operation between all security and military authorities, developing a sustainable local military industries sector, and raising transparency and spending efficiency.
For the authority to achieve its vital system of priorities, the decision to establish it specified its competencies in the following: proposing strategies, rules, and regulations related to the military industries sector and its complementary industries, and managing military procurement operations, bearing in mind that priority is given to Saudi companies according to specific controls set by the authority.
The authority also manages and develops the economic balance program about the military industries sector and its complementary industries, and negotiates with foreign companies to transfer technology and increase local content, in addition to managing all research and development operations in the sector, including the allocation of research and development budgets and technology transfer.
The authority also coordinates with the relevant authorities to harmonize the outputs of technical education and training with the needs of the sector, work to attract technical competencies to it, set incentives for its development, support local manufacturers, and support the export of local military products.
To ensure that the authority performs its national role, the decision to establish it organized its management mechanism through the formation of a board of directors headed by the Deputy Prime Minister, with the membership of the Minister of Energy, Industry and Mineral Resources, the Minister of Finance, the Minister of Trade and Investment, and the Chairman of the Board of Directors of the Saudi Military Industries Company.
With the launch of the authority’s work based on three main pillars: industry, military procurement, and research and technology, the authority organized some workshops in the presence and participation of local investors in the military industries sector to discuss ways to develop and enhance exports through long-term planning for military procurement.
Since September 8, 2019, the authority has started receiving requests for issuing licenses to engage in military industries activities for companies operating in the sector. The licenses granted were concentrated in three types: military manufacturing licenses, licenses to provide military services, and licenses to supply military products or services.
The number of registered users through the industrial licensing portal reached 180 users, with a total number of applications for licenses for manufacturing and services, which reached 95.
Indeed, in its press conference organized by the authority in November (2019) on this occasion, the authority handed over the first set of permits to some companies, submitted by them:
The Saudi Military Industries Company, the Advanced Electronics Company, the Saudi Company for Advanced Technologies, and the Sondos Advanced Company for Industry.
Fruits of localizing the military industry
The second: the establishment of the Saudi Military Industries Company… a focal point in the localization process
The Saudi Company for Military Industries, known by its acronym “SAMI”, was established as a national entity on May 17, 2017, concerned with developing and supporting the military industries in the Kingdom of Saudi Arabia and enhancing its self-sufficiency, in line with the Kingdom’s 2030 vision aimed at localizing 50 percent of the kingdom’s military spending.
The vision is also working to make this company among the top 25 specialized companies in this sector in the world, which was announced by Saudi Crown Prince Mohammed bin Salman, saying, “Our goal is to localize more than 50 percent of military spending by 2030. The company will constitute a turning point in the growth of the Saudi military industries sector, as it will become a sustainable platform for providing military products and services.”
It is worth noting in this regard that the establishment of this company does not mean that the Kingdom had no previous interest in the military industries. Rather, the pages of history record that the Kingdom, since its establishment, has attached great importance to these industries, as it is mentioned that the founding King, King Abdulaziz Al Saud in1949 ordered the establishment of military factories, and the first production line began in 1953.
In 1985, the military factories were transferred to the General Organization for Military Industries, and in 2013 it was transferred to the General Organization for Military Industries. It includes 16 factories’ production lines that produce different types of light and medium ammunition, missiles, control and sensor devices, military vehicles, tankers, armored vehicles, drones, and various military equipment.
But with the launch of Vision 2030 and the need for more advanced and expanding efforts in light of the increasing diversity of challenges, which necessitated the importance of having a government military company that operates according to the latest administrative and technical systems, to become the mainstay of the Saudi military industry.
Therefore, the Saudi Military Industries Company was inaugurated, which defined its scope of work in four vital areas: Air systems, including maintenance and repair of fixed-wing aircraft, and the manufacture and maintenance of unmanned aircraft.
The Saudi Company for Military Industries also works in the field of land systems, which includes the manufacture, maintenance, and repair of military vehicles and the field of weapons, ammunition, and missiles as well as the field of defense electronics, including radars, sensors, communications systems, and electronic warfare.
The company’s goals were set in pursuit of maximizing its direct contribution to the Kingdom’s GDP by more than SAR 14 billion, with about SAR 6 billion allocated for investment in research and development operations, in addition to its endeavor to provide more than 40,000 job opportunities in the Kingdom.
Most of those opportunities are in the field of advanced technologies and engineering, as well as its role in generating more than 30,000 indirect jobs and creating hundreds of small and medium businesses.
To achieve all these goals, the company has been keen, since its establishment, to take a package of initiatives aimed at localizing the military industries to enhance the Kingdom’s capabilities and its political roles at the international and regional levels, which in turn requires the rise of the Saudi army’s position in the list of armies worldwide from Where is the gear.
Therefore, the company has taken many initiatives in this regard, the most prominent of which are the following:
In January 2018, a joint venture contract was signed with the French company Thales, with a localization rate of 70 percent.
In March 2018, the company agreed with the American Boeing Company to establish a joint venture to localize more than 55 percent of the maintenance, repair, and overhaul of warplanes, transfer the technology of integrating weapons on those planes, and localize the supply chain for spare parts inside the Kingdom.
The project’s revenues were estimated at $22 billion while providing about 6,000 jobs by 2030. It is noteworthy that this project is the only provider of support services for military aviation platforms in the Kingdom, which supports defense capabilities and enhances deterrence capabilities.
In April 2018, the company signed an agreement with Navantia Naval of Spain to supply five warships with a localization rate of 60 percent and to establish a joint venture that manages and localizes all work related to combat systems on ships.
In January 2019, the company signed an agreement for the manufacture of armored vehicles with CMI, with a localization rate of 50 percent.
In February 2019, it was agreed to establish a Saudi partnership in the field of maritime defense with the French Naval Group.
Defense Industry localization strategy in Saudi Arabia
In fact, despite the importance of all these signed agreements, the most prominent of them is the inauguration of the commercial partnership with the Spanish company Navantia, signed in April 2018, because this partnership would start a joint project on Saudi land for shipbuilding, where the Spanish company will supply warships to the Kingdom.
Under this joint project, it will be the last warship to be delivered by this year, to begin the stage of joint production to start building five ships of the “Avante 2200” type, which represents an opportunity to enhance the position of the integrated systems and advanced technical solutions provided by Navantia in the Saudi market and its sphere of influence.
This will contribute to the goal of localizing the military industry, as indicated by the Chairman of the Board of Directors of the Saudi Company, Ahmed bin Aqeel Al-Khatib, saying: “The establishment of this joint venture with Navantia Company will localize more than 60 percent of the work related to combat ship systems, including their installation and integration.”
Not only that, but this project will contribute to providing more job opportunities, as it will provide about 6,000 direct and indirect jobs for five years, including 1,100 direct jobs, more than 1,800 jobs in the auxiliary industries, and more than 3,000 job opportunities.
This is in addition to the direct contribution to the Kingdom’s GDP of up to 14 billion riyals, by attracting more foreign investments.
This project would also contribute to raising the capabilities of the naval forces to confront threats and maintain the readiness of the Royal Forces fleet.
The joint venture will focus on software management, combat system installation and integration, systems engineering and build, hardware design, hardware design, software development, testing and verification, prototyping and advanced modeling, simulation, and TLS life support service.
The project also provides other services within the scope of the supply, which is integrated logistical support, operation, and maintenance training, a training center on the ships’ combat management system, and an integrated platform management system.
It is worth noting in this regard that the Avanti 2200 is a multi-role vessel specifically designed for maritime surveillance, control, search and rescue, and support to other ships and other tasks. These warships have a tremendous ability to protect strategic assets and gather intelligence as well as anti-submarine and air war terrestrial and electronic.
In the same context, it becomes important to point out one of the most important events that reflected what the Saudi military industry aims to achieve.
This is represented in organizing the Armed Forces Exhibition to Support Local Manufacturing “AFED Exhibition” in its fourth session for 2018, under the slogan “Our Industry is Our Strength”.
The exhibition featured highlighting and supporting local content and the localization of complementary industries, through a partnership with international companies, in addition to recycling financial resources, encouraging Saudization programs, bringing foreign capital to the local market, educating the national community, gaining confidence in the local product, and creating a long-term strategic relationship with the private sector in the field of manufacturing.
During the exhibition, more than 80,000 manufacturing opportunities were presented, and thousands of manufacturing orders were submitted.
Also, on the sidelines of this exhibition, “Aviation Technology” signed a memorandum of understanding (MoU) with the Ukrainian “Antonov” company and the Saudi Company for Specialized Products (Wahaj) in the field of industrial cooperation for the manufacture of aircraft parts and parts.
Al-Salam Aircraft Manufacturing Company also signed an agreement to manufacture aircraft spare parts, with the National Industrialization Company and a French company.
In conclusion, the step taken by the Kingdom of Saudi Arabia within its development vision in the field of localizing 50 percent of the military industries by 2030, represents a major focal point in the process of completing the building of the modern Saudi state capable of dealing with current challenges and entering the future with ambitious visions and multiple capabilities.
The aforementioned step succeeded in attracting the attention of international reports regarding this important step.
We mention in this what was stated in the monthly assessment bulletin issued by the American Center for Strategic and Security Studies “Stratford” in November 2018, in which it was stated: “To protect itself from external influence, and to stay away from any future political pressures, and to avoid dependence on arms imports from Europe and the United States, Saudi Arabia has worked hard to build its defense industrial capabilities, which will enhance its regional and international standing.
Needless to say, what has been achieved so far in this regard represents an important indication of the insistence and determination of the Saudi leadership to make its plan a success in this field, which requires awareness that completing success requires paying more attention to the human element represented in the Saudi citizen.
This in turn requires that the management of military factories be assigned to specialists and scientifically qualified with competence, experience, and high professionalism in managing all work items and achieving the required harmony between them while ensuring the continuation of training programs to develop the capabilities of workers in this field by organizing high-level training programs in partnership and cooperation With specialized international companies.
This is in addition to working to strengthen the partnership with the Saudi private sector to strengthen cooperation to serve these industries and to invest the energies and capabilities available in private national industries in support and development of existing industries and the introduction of new industries, rather than expanding the field of industries supporting military industries.