- Joint venture to focus on manufacturing and jobs within the Kingdom
- Initial agreement, which could be formalized in the coming weeks, centers on maintenance and overhaul of rotary fleets
- Move supports PIF's aim to grow Aerospace and Defense sector, and Vision 2030 target to localize over 50 percent of military spending
The Public Investment Fund-owned defense group SAMI today signed a preliminary agreement with the Boeing Company to boost military manufacturing in Saudi Arabia, one of the aims of PIF and the Kingdom's Vision 2030 reform plan.
Under SAMI's agreement with the Chicago-headquartered Boeing, the world's largest aerospace company, the two organizations are set to work through a limited liability company to provide maintenance and overhaul services for military rotary fleets operated in the Kingdom.
The joint venture was announced at the inaugural World Defense Show in Riyadh, with the parties signaling the intention to formalize the agreement in the coming weeks, according to a statement issued by SAMI, a wholly owned subsidiary of PIF.
“As we move toward the realization of our Vision 2030 ambitions for a strengthened defense industry, our long-standing relations with industry leaders such as Boeing will further our success," said His Excellency Ahmed Al-Khateeb, Chairman of SAMI. “This joint venture will help to enable more defense manufacturing to take place in Saudi Arabia, ensuring more jobs and prosperity in the Kingdom – now and for generations to come."
Eng. Walid Abukhaled, CEO of SAMI, said there was a “major opportunity" for localization of skills around the maintenance of rotary fleets in the Kingdom. “Much of this work is currently outsourced to the US or Europe, while aircraft numbers in the Kingdom are expected to double in the next ten years. We also see this joint venture as a first step toward a broader strategic partnership between Boeing and SAMI that will encompass additional platforms and services," he said.
The preliminary agreement supports PIF's strategic sector of Aerospace and Defense and initiative to grow the industry domestically, in areas including military systems and equipment, parts, components, and maintenance, repair, and operations (MRO) services. This in turn reflects the aim, under Saudi Arabia's Vision 2030 plan, to localize over 50 percent of military equipment spending by 2030.
“We are proud of the… 77-year relationship that Boeing has with the Kingdom of Saudi Arabia," said Torbjorn Sjogren, VP, Boeing International Government & Defense Organization. “This agreement will provide maintenance, repair, and overhaul services for the Kingdom's rotorcraft platforms. It is an excellent example of our alignment with the Kingdom's Vision 2030."
Saudi Arabia has one of the world's biggest defense budgets, yet only a fraction of spending occurs within the country. The Kingdom has allocated SAR 171 billion ($46 billion) in military spending in 2022, according to a budget announcement in December.
