KSA’s historic transformation is creating opportunities for global defense investors

KSA’s historic transformation is creating opportunities for global defense investors

KSA’s historic transformation is creating opportunities for global defense investors
Short Url

There is an unprecedented shift in the global economy as a consequence of the COVID-19 pandemic. The heavy blow dealt by the pandemic to global supply chains has forced countries and trading blocs to rethink the way they approach trade, interdependency, and, most importantly, autonomy and localization.

In Saudi Arabia, our goal, even before the pandemic, has been to increase our local capabilities, diversify our economy, and move toward greater autonomy. For the defense sector in particular, our key goal is to localize more than 50 percent of our military expenditure by 2030 under the guidance of Crown Prince Mohammed bin Salman, the custodian of Vision 2030. GAMI has developed carefully calculated strategies and continues to implement reforms to position itself and the wider defense sector to achieve this goal.

One of our most strategic and significant programs has been a comprehensive analysis to determine the gaps and opportunities in our local supply chain. Announced in August, GAMI’s Supply Chain Initiative has taken a thorough look at the sector’s projected military procurement plans, supply chain needs, and local industrial capabilities. This has enabled us to pinpoint gaps and opportunities through the entire supply chain focusing our efforts on the areas of greatest value.

We have identified 74 targeted localization opportunities worth billions of dollars across six targeted defense industry domains. This means that our latest supply chain initiative is not just a tool for us to strengthen our local manufacturing capabilities, but also a chance for local and global industry players to take part in a journey of transformation by establishing long-term strategic partnerships within the Kingdom.

We realize that ease of access to these opportunities is just as important as the opportunities themselves. To reinforce this point, over the past several years we have received an overwhelming interest from global defense industry players to invest in Saudi Arabia’s blossoming defense sector. GAMI has acted quickly to acknowledge and accommodate their interest and are working tirelessly to make sure that it is as easy, secure, and quick as possible for investors to become a part of the Kingdom’s rapidly growing defense sector.

In addition to the recent digitalization efforts in licensing and permits, we have launched the Military Industry Marketplace (MIM), a digital platform that connects the Saudi defense industry’s ecosystem with local and international industrial entities, to achieve a matchmaking between supply and demand to the benefit of all involved.

Local and international investors are already eager, sustained by billions of dollars’ worth of investment opportunities and a facilitated licensing and permit process to enter the market.

Ahmad A. Al-Ohali

Through the MIM, local and international investors have access to targeted localization opportunities identified by GAMI, as well as information on local suppliers operating in the market. In other words, we don’t just call on investors to establish strategic partnerships that will be beneficial to them, but we also give them the tools to do so. While our Supply Chain program offers investors great opportunities, the MIM provides them with a gateway to access these opportunities and find the partners they need.

The great interest and the reception we received from global defense players at this year’s Defense and Security Equipment International exhibition in London was a confirmation of the success of these reforms and strategies. Our participation with representatives from GAMI, the Saudi Ministry of Investment, Saudi Arabian Military Industries, and the World Defense Show enabled us to gauge investor appetite for the Kingdom’s defense sector.

It was also our pleasure, while in London, to kick off a series of roadshows, hosting 46 leaders from 18 UK and European companies. We presented some of our most important programs and initiatives. We really valued the opportunity to hear the thoughts and opinions of the wider defense community on the progress we are making and gather some insights on how we can move forward together. We aim to build on the success of this approach more broadly and will look to take advantage of similar opportunities to talk, share, listen and understand.

Furthermore, the World Defense Show is taking place in Riyadh on March 6-9, 2022, which will be a future-focused defense event, showcasing military interoperability across air, land, sea, security, and space.

Although we have already allocated 90 percent of the space for the upcoming WDS, the interest in attendance and participation we received during DSEI was confirmation that Saudi Arabia is one of the top destinations for global defense investors. In addition to key Global Industry OEMs from all parts of the world, foreign governments have also confirmed their participation.

WDS will bring together 3,000 international industry VIPs from over 45 countries. We therefore strongly urge local and international defense investors to capitalize on one of the world’s fastest growing defense ecosystems and join us at the upcoming WDS.

We are confident that the transformation of our defense industry will only continue to accelerate. Together we will achieve our mutual goals and interests. Local and international investors are already eager, sustained by billions of dollars’ worth of investment opportunities and a facilitated licensing and permit process to enter the market. Join us in our journey of transformation and let’s work together to build a safer and more prosperous future for generations to come.

• Ahmad A. Al-Ohali is the governor of GAMI.

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view