Saudi Arabia reveals strides in local defense production as it races towards ambitious 2030 goal

BEIRUT — The Kingdom of Saudi Arabia recently revealed significant strides in its quest to localize defense production, reaching nearly 20 percent localization by the end of 2023. That’s up from just 4 percent in 2018 as the Kingdom pursues its ambitious goal of 50 percent by 2030.

Saudia Arabia’s General Authority for Military Industries (GAMI) “issued many policies and legislation that regulate and stimulate the sector and enhance the competitiveness of the local product, which raised the localization rate from 4 percent in 2018 to 19.35 percent at the end of last year of military spending,” GAMI head Ahmad Abdulaziz Al-Ohali said Thursday during a dialogue session at the Local Content Forum.

Al-Ohali added that the number of authorized and licensed facilities in the military industries sector has increased from five facilities in 2019 to 296 facilities by the third quarter of 2024.

“The Authority [GAMI] worked to sign more than 53 industrial cooperation programs worth approximately 35 billion riyals [$9.32 billion] with local and international companies, including approximately 13 billion riyals [$3.46 billion] purchase orders for local companies,” he said.

Saudi Arabia, historically one of the largest defense importers worldwide, is concentrating heavily on the Kingdom’s Vision 2030 to localize 50 percent of defense production.

And though the year-to-year rise doesn’t appear to be steep enough for Saudi Arabia to reach that high mark in time, another key figure in Saudi Arabia’s defense industry previously told Breaking Defense that the policies, investments, joint ventures and production lines the Kingdom has established should cause an exponential growth curve in the years ahead.

“We are extremely confident that by 2030 we will achieve the target of 50 percent localization in defense spending,” the then-CEO of Saudi Arabian Military Industries Walid Abdukhaled said in June 2023. A few months later, in February 2024, Al-Ohali echoed the sentiment, telling Breaking Defense he was “really confident” Riyadh would hit its goal or go beyond it.

In October of last year, GAMI launched an “Invest in Saudi Arabia” section on its official website, with the goal of pointing international firms to areas of opportunity. The authority identified “more than 70 opportunities in the supply chain,”  Al-Ohali said then, worth up to $64 billion over the next decade.

“We contributed to supporting local manufacturers through several initiatives, such as: applying the zero added tax on locally manufactured military goods, and most importantly, framework agreements,” Al-Ohali said.

The governor highlighted that GAMI has launched a unified platform for military industries, “which represents a unified structure for all services provided to beneficiaries, and we were keen to automate all services and use the latest means of technology, data science and artificial intelligence.”

On Wednesday, a joint venture between Saudi and Spanish defense firms, SAMINavantia, launched a Saudi-designed combat management system, the first such product developed by the company in the Kingdom and which the company said was “part of SAMINavantia’s contribution to localizing over 50 [percent] of military spending by 2030[.]”