General Authority for Military Industries announces Saudi Arabia’s defense and security industry achievements to date

Al Ohali: “Opportune time to invest in Saudi’s promising industry, which is expected to contribute SAR 90 billion to KSA’s GDP by 2030”

Riyadh, Saudi Arabia, November 11th, 2019 – The General Authority for Military Industries (GAMI), the regulator, enabler and licensor of Saudi Arabia’s defense and security industry, announced today achievements realized over the past two years in the local sector. The news reaffirms that the industry is on track to achieve its mandate under Vision 2030, namely in its efforts to localize 50% of the Kingdom’s military expenditure over the next decade.

During a press conference in Riyadh, His Excellency, Ahmad A. Al Ohali, Governor of GAMI, expressed his pride in the work accomplished by the teams at GAMI who have laid the foundation of a promising local defense industry. Addressing the Authority’s three strategic pillars: industry, acquisition, and research and technology, Al Ohali highlighted the massive opportunities Saudi Arabia is offering international investors and OEMs looking to benefit from the industry’s projected growth.

Under our acquisition pillar, we have already started reaping the benefits of purchase power consolidation and the developments made in national military procurement processes,” said Governor Al Ohali. “As a result, we achieved significant added value at financial, commercial, legal and operational levels, including savings of around SAR 900 million.”

GAMI’s industry pillar oversees the regulatory developments of defense-related business activities to boost growth and incentivize investment opportunities within the sector. For the first time in KSA’s history, GAMI launched an online portal through which investors can apply for three types of operating licenses in the local defense and security industry: military equipment manufacturing, military services and the supply of military equipment and services.

The Authority presented licenses to some of the first applicants including Saudi Arabia Military Industries (SAMI), Advanced Electronics Company (AEC), Al Tadrea Manufacturing Company (TMC), Sondos Advanced Manufacturing Company, and the Saudi Company for Advanced Technologies. The licensing portal has logged 180 registrants, 95 of which have applied for licenses.

The Authority also announced the launch of its Industrial Participation Program (IPP), developed in cooperation with key industry players including local and international OEMs. IPP will be a cornerstone for localization efforts in the defense and security industry, providing attractive incentives to manufacturers who are committed to adding value, transferring technology and providing opportunities for local Saudi talent in the sector. “Since its establishment, GAMI has identified localization opportunities worth SAR 4 billion in supplier contracts, which will be realized over the coming years,” Al Ohali said.

GAMI’s research and technology pillar is responsible for building local capabilities and talent through educational and training programs, as well as supporting SMEs and directing research and development endeavors towards priority areas for the local defense and security industry through collaborations with local and international universities and research centers.

Enabling the development of a sustainable local defense and security industry would have a significant impact on the Kingdom. “Building the industry will primarily provide stronger autonomy, national security and military readiness,” Al Ohali said. “From an economic perspective, localizing 50% of KSA’s military expenditure will see us building an industry worth more than SAR 30 billion by 2030, directly contributing around SAR 90 billion to the Kingdom’s non-oil GDP,” he added.

In terms of job creation, we expect the industry to generate around 40,000 direct jobs and more than 60,000 indirect jobs through ancillary industries, most of which will be undertaken by Saudi citizens.”

GAMI signed memoranda of cooperation with its counterparts in several nations facilitating exchange of expertise in military industries, research and development, military technology and military procurement.