Saudi Arabia is significantly advancing its domestic defense manufacturing capabilities with the establishment of BAE Systems Arabian Industries. This new entity, formed from the merger of BAE Systems Saudi Development and Training and the Saudi Maintenance and Supply Chain Management Co., aims to accelerate the localization of military spending and bolster the Kingdom’s military industrial base.
The move is a direct response to Saudi Arabia’s Vision 2030, which targets over 50% localization of military expenditure by the end of the decade, a substantial increase from just 4% in 2018 and 19.35% in 2024. Ahmad Abdulaziz Al-Ohali, governor of the General Authority for Military Industries (GAMI), inaugurated the new company, emphasizing its role in enhancing local content and fostering contributions from national and international companies to create a robust and sustainable military-industrial system.
The merger, finalized four months prior to the announcement, consolidates decades of experience in defense training, capability development, and logistics. This integration of national and global expertise reflects confidence in Saudi Arabia’s attractive investment environment within the defense sector. Al-Ohali highlighted the initiative’s importance in transferring knowledge and building national expertise, directly supporting the 2030 localization goal. GAMI has pledged continued support for initiatives that boost local content and create opportunities for both local and international businesses.
Abdulatif Al-Shaikh, CEO of BAE Systems Arabian Industries, articulated the company’s vision to become a leading Saudi defense firm, supporting and developing capabilities within the Kingdom and the broader region, in alignment with Vision 2030. This strategic development follows other recent achievements in Saudi Arabia’s defense localization efforts, such as the successful production of the first locally manufactured components for the Terminal High Altitude Area Defense (THAAD) system launcher in Jeddah, underscoring growing technical collaborations with global defense giants like Lockheed Martin.
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