KSA, UAE lead military R&D spending in GCC to build domestic capacity

KSA, UAE lead military R&D spending in GCC to build domestic capacity
Ahmed bin Abdulaziz Al-Ohali, governor of the Kingdom’s General Authority for Military Industries, known as GAMI, said that R&D spending will be increased from 0.2 percent to around 4 percent of armaments expenditure by 2030. (Shutterstock)
Short Url
Updated 04 March 2022

KSA, UAE lead military R&D spending in GCC to build domestic capacity

KSA, UAE lead military R&D spending in GCC to build domestic capacity
  • Kingdom plans to spend over $20 billion for its military industry, with more than half of it going into R&D over the next decade

RIYADH: In a region where military threats abound, GCC countries are moving toward strengthening their military Research and Development capabilities, also known as R&D, as part of their strategy to ramp up the domestic manufacturing capacity of weapons and advanced military systems.

Saudi Arabia and the UAE are leading the movement, with the massive allocation of funds—a large sum of it will be spent locally.

The Kingdom is investing heavily in its local defense industries as part of the broader diversification plans outlined under Vision 2030. Last year, a senior Saudi military official reiterated that the Kingdom plans to spend over $20 billion for its military industry, with more than half of it will go into R&D over the next decade.

Ahmed bin Abdulaziz Al-Ohali, governor of the Kingdom’s General Authority for Military Industries, known as GAMI, said that R&D spending will be increased from 0.2 percent to around 4 percent of armaments expenditure by 2030.

In the UAE, too, the Ministry of Defense is streamlining its domestic military capabilities. Last year, it signed an agreement with Tawazun, delegating the management of defence and security R&D planning and execution.

The defense and security acquisitions authority for the UAE Armed Forces and Abu Dhabi Police, Tawazun, will foster economic growth and the development of the UAE defense and security industry.

“A key dynamic that shapes the current defense market in the GCC is that it is robust in several types of weapons and enabling systems, including aircraft, drones, maritime and littoral systems, and anti-air and anti-munition defense,” said Nick Heras, deputy director, Human Security Unit, at Newsline Institute, in an interview with Arab News.

He added that some of the other emerging technologies include systems for intelligence, surveillance and reconnaissance, artificial intelligence, munitions, computer systems, and information warfare tools. Led by the UAE and KSA, the regional countries are consolidating their military industry and R&D platforms by initiating various measures off late.

In 2019, for instance, Abu Dhabi placed several state-run companies under a single organization to restructure its defense industry. Around 25 businesses with combined annual revenue of $5 billion were consolidated under a new conglomerate, called EDGE, which will position the country as a global player.

Some of the companies placed under EDGE include the Abu Dhabi Ship Building and the Advanced Military Maintenance Repair and Overhaul Center. The latter is a joint venture with Lockheed Martin Corporation and Sikorsky, a Lockheed Martin subsidiary.

A similar venture was formed in the UAE in 2014 when Mubadala and Tawazun launched Emirates Defense Industries Company, known as EDIC, which consolidated a dozen government-owned companies under one organization. EDIC is now part of EDGE.

“EDGE is at the moment the most advanced conglomerate in the region in the field of defense industry, and it plays the role of a model for the Saudis with SAMI and the Qataris with Barzan Holdings,” said Jean Loup Semaan, a senior research fellow at the Middle East Institute of the National University of Singapore, in an interview with Arab News.

Some of the major UAE defense firms operate nonetheless in independence of EDGE. These include Aquila Aerospace, which modifies aircraft for spying, and Calidus, a producer of light-attack aircraft, according to a report by the International Institute for Strategic Studies (IISS).

In Saudi, too, several entities have been created to manage and oversee the budding military industry.

In 2017, the Kingdom established the GAMI, which oversees military research and development and procurement. It is also a regulator and licensor for the military industry in Saudi Arabia.

In the same year, the state-owned Saudi Public Investment Fund, commonly known as PIF, launched the national Saudi Arabian Military Industries, or SAMI, as part of the Kingdom’s 2030 Vision.

“The GCC market is still developing, and there is a lot of room for growth. It is also a competitive market with a diverse array of countries in it, including all three great powers—China, Russia, and the United States, and European states such as Britain, France, Germany, Italy, and Spain, and rising powers including Turkey and even India,” said Heras.

Through its partnership with the UAE and Bahrain, Israel is also beginning to grab a share of the market, including potentially in R&D in partnership with the UAE, he added.

Whether EDGE or SAMI, all these regional projects have several goals, including building talent within the UAE and Saudi Arabia, respectively.

EDGE aims to attract “elite industry experts and talent from around the globe, to help on a wide spectrum of modern product development,” the company reportedly said in a press statement during the launch.

EDGE, which has five core specialties—platforms and systems, missiles and weapons, cyber defense, electronic warfare and intelligence, and mission support, employs over 12,000 people.

Whereas Saudi is expected to create around 100,000 jobs for the locals in the military sector as part of Vision 2030.

“There is definitely a strategy both in the UAE and KSA to foster their local defense industry in coordination with the education system,” said Samaan, giving the example of the Mohammed bin Zayed University for Artificial Intelligence.

But he pointed out that R&D is a long process, “so it’s too early to see a significant contribution from the local universities to the development of military technologies.”

In his previous interview with Arab News, Al-Ohali underlined the importance of forming a healthy ecosystem that included academic institutions, research centers, universities, public and private institutions in order to ensure the sustainability of the local military industry.

He added that the vision was to establish partnerships with academic institutions in order to overcome the local skills gap in strategic areas, such as engineering and skilled labor.

Yet, one challenge that GCC countries may face while building their own R&D sector is that military research is often a matter of national security. This makes other international players often hesitant to share their military innovations.

“R&D sharing is one of the tricky subjects in the global arms trade. Companies have to navigate complicated export control laws, and especially for classified type systems, it can be a burdensome process,” said Heras.

He explained that sharing research and development is often a national security decision that is weighed against the potential commercial opportunities.

“China and some countries such as Turkey have an advantage in this regard because the military technology they sell is often tied to the commercial benefit of the state or to companies close to the elites of the governing regime, which balances the national security concerns they might have,” concluded Heras.


TASI begins July in green following a dismal June: Opening bell

TASI begins July in green following a dismal June: Opening bell
Updated 17 sec ago

TASI begins July in green following a dismal June: Opening bell

TASI begins July in green following a dismal June: Opening bell

RIYADH: Saudi stocks started their first trading session of July in green, following a dismal performance in June when the market lost 11 percent.

As of Sunday’s opening bell, TASI gained 0.60 percent to reach 11,591, while the parallel market, Nomu, added 0.17 percent to 21,622, as of 10:05 a.m. Saudi time.

This was led by a 3.03 percent gain in one of the Kingdom’s biggest lenders Saudi National Bank and a 0.26 percent gain in oil giant Aramco. 

Etihad Atheeb Telecommunication Co. gained 3.37 percent to lead the gainers, while Bupa Arabia for Cooperative Insurance Co. slipped 2.51 percent to lead the fallers.

In the financial sector, the Kingdom’s largest valued bank Al Rajhi edged up 0.85 percent, while Alinma Bank climbed 0.90 percent.

Al Moammar Information Systems Co. added 2.22 percent, after being awarded SR34 million ($9 million) by Saudi Co. for Comprehensive Technical and Security Control as well as SR21.9 million by King Abdulaziz City for Science and Technology.

Abdullah Al Othaim Markets Co. edged down 0.19 percent, after reporting that it canceled the initial public offering plans for its malls unit.

Oil prices closed Friday with US West Texas Intermediate crude at $108.43 per barrel and Brent crude at $111.63 per barrel.


Saudi IT firm Al Moammar secures $15m in contracts with two firms

Saudi IT firm Al Moammar secures $15m in contracts with two firms
Updated 29 min 11 sec ago

Saudi IT firm Al Moammar secures $15m in contracts with two firms

Saudi IT firm Al Moammar secures $15m in contracts with two firms

RIYADH: Saudi IT solution provider Al Moammar Information Systems Co. won an SR34.4 million ($9 million) project with the Saudi Co. for Comprehensive Technical and Security Control.

The deal, valid for 36 months, is to implement a project to raise the operational efficiency of the security firm.

The IT firm, known as MIS, was also awarded a three-year contract with King Abdulaziz City for Science and Technology worth SR21.9 million, according to a bourse filing.

In a separate announcement, MIS said its board approved the distribution of SR36 million in dividends at SR1.2 per share for the first half of 2022.


Here’s what you need to know before Tadawul trading on Sunday

Here’s what you need to know before Tadawul trading on Sunday
Updated 34 min 3 sec ago

Here’s what you need to know before Tadawul trading on Sunday

Here’s what you need to know before Tadawul trading on Sunday

RIYADH: Saudi Arabia’s stock market posted its second-largest monthly decline of the year in June, led by fears of interest rate hikes weighing on investor optimism.

TASI, as the main index is known, ended June losing 11 percent to reach 11,523 at the closing bell of Thursday’s session, while Nomu exited the month at 21,585.

Elsewhere in the Gulf, stock exchanges of Dubai, Qatar, Abu Dhabi, and Oman shed between 0.1 and 0.7 percent, while those of Bahrain and Kuwait were up 0.8 and 0.2 percent, respectively.

In energy trading, Brent crude settled at $111.63 a barrel on Friday, while US West Texas Intermediate reached $108.43 a barrel.

Stock news

The Saudi National Bank will distribute dividends of SR4.9 billion ($1.3 billion) in total to its shareholders for the first half of 2022

Saudi Industrial Development Co.’s unit Sleep High signed a deal worth SR12.7 million annually with Emmdad Logistics Services

Al Moammar Information Systems Co. won a SR34.4 million project with the Saudi Co. for Comprehensive Technical and Security Control in addition to a SR21.9 million deal with King Abdulaziz City for Science and Technology

Al Moammar Information Systems Co.’s board of directors approved the distribution of SR1.2 per share in dividends for the first half of 2022

Arabian Pipes Co. was awarded a SR60 million deal to supply oil and gas steel pipes to oil giant Aramco

International Human Resources Co. intends to proceed with a 20-percent stake initial public offering on Saudi Arabia’s parallel Nomu market

Arabian Centres Co. declared a cash dividend of SR0.75 per share for the second half of its fiscal year ended March 31, 2022

Banque Saudi Fransi signed a SR44 million contract with Allianz Saudi Fransi Cooperative Insurance Co. for credit life insurance coverage

Shareholders of ACWA Power Co. approved the recommendation to distribute a SR0.77 dividend per share for 2021

Thimar Development Holding Co.’s losses widened by 79 percent to SR11.7 million in 2021

Shareholders of Bupa Arabia for Cooperative Insurance Co. approved a dividend payout of SR4.5 per share for the fiscal year 2021

L’azurde Co. for Jewelry got its shareholders’ approval to distribute cash dividends of SR0.25 per share for 2021

Al-Alamiya for Cooperative Insurance Co. sealed a five-year bancassurance distribution agreement with Riyad Bank

Unitholders of Albilad Saudi Sovereign Sukuk ETF are set to receive SR80,808 in total as cash dividends for the month of June

Saudi Real Estate Co.’s subsidiary Tamear got its shareholders’ approval to reduce capital from SR100 million to SR34 million

Calendar

July 4, 2022

Launch of single-stock futures trading on Tadawul

July 7, 2022

Saudi Exchange will close for Eid Al Adha holidays and resume trading on July 13


Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake
Updated 45 min 42 sec ago

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

RIYADH: Saudi recruitment service provider International Human Resources has selected Yaqeen Capital to advise on its potential initial public offering on the Kingdom’s stock market.

The company is looking to offer 500,000 shares, representing 20 percent of its capital, on the parallel market Nomu, according to a filing.

The IPO will be confined to qualified investors, who will be allowed to subscribe starting July 31 until Aug. 2.

Established in 2005, iHR offers human resources solutions and employment-related consultancy to businesses.

Saudi iHR selects Yaqeen Capital to advise on IPO for 20% stake

RIYADH: Saudi recruitment service provider International Human Resources has selected Yaqeen Capital to advise on its potential initial public offering on the Kingdom’s stock market.

The company is looking to offer 500,000 shares, representing 20 percent of its capital, on the parallel market Nomu, according to a filing.

The IPO will be confined to qualified investors, who will be allowed to subscribe starting July 31 until Aug. 2.

Established in 2005, iHR offers human resources solutions and employment-related consultancy to businesses.


Saudi Aramco awards $16m steel pipes order to Arabian Pipes

Saudi Aramco awards $16m steel pipes order to Arabian Pipes
Updated 03 July 2022

Saudi Aramco awards $16m steel pipes order to Arabian Pipes

Saudi Aramco awards $16m steel pipes order to Arabian Pipes

RIYADH: Saudi oil giant Aramco has given out an order worth SR60 million ($16 million) to homegrown Arabian Pipes Co. to supply steel pipes.

The contract will be valid for one year, the Riyadh-based pipe manufacturer said in a statement to the Saudi stock exchange, Tadawul.

Arabian Pipes expects the transaction to impact its financial statements starting from the second quarter of 2023.

This comes as an extension to two contracts awarded by Aramco to Arabian Pipes so far this year, worth SR368 million in total.