IDEX: Charting the rise of SAMI

Launched in May 2017, SAMI has been given the task of developing cutting-edge technologies, manufacturing world-class products and providing high-quality services to scale up Saudi Arabia’s defence industries sector.

“I would say I would be fully pleased when we achieve our ultimate objective and become one of the top 25 defence companies in the world, and localise 50% of our defence spend in the kingdom,” said CEO Waleed Abukhaled.

“Having said that, I’m extremely proud of our achievements in such a short time. I started with SAMI in September 2019 and was employee number 120. Now, we’re close to 3,600 and we will be taking on an additional 1,500 people in the next quarter. So that shows the pace of growth.”

That leap in numbers in the coming months is caused not only by new opportunities, but also by taking on assets that are being transferred from other Saudi Government entities.

“From a revenue perspective, our operation started in January 2018. During 2022 we announced we had a backlog of SR10 billion ($2.66 billion). We were rated number 98 in the world’s top 100 defence companies by Defense News,” said the CEO.

“When the Crown Prince, Mohamed bin Sulman, announced ‘vision 2030’ in 2016, Saud Arabia had the third-largest defence budget in the world, but only 2%-3% of that was localised. For us in SAMI, by the end of 2022, around 10% of the contracts are in Saudi. All our contracts now have a goal of 50% localisation.”

SAMI may be building up its contracts quickly, but will it be able to find enough qualified staff to handle the work, given the shortages of trained people that affects western nations and the difficulty of persuading enough school and college students to take science, technology, engineering and maths (STEM) subjects?

“The biggest advantage Saudi Arabia has is youth,” said Abukhaled. “The biggest percentage of our population is very young.” Many have been sent on courses in some of the world’s best universities, so finding enough graduates to staff SAMI’s projects is not considered a problem.

“I think the challenge is more with technicians rather than graduates. The General Authority for Military Industries (GAMI) has established a National Academy of Military Industries, of which I’m the chairman. The ultimate goal is to graduate Saudi technicians with the best curriculum in the world. We’re working with leading defence companies to help us set that up.”

SAMI’s aspiration is to become a national defence champion for Saudi Arabia. With this in mind, the company has set up 12 joint ventures with some of the world’s biggest aerospace companies, such as Boeing, Thales and L3Harris. “I have no doubt that, although it’s a very ambitious goal, we’re on track,” said Abukhaled.

“Some are going extremely well, some we are operationalising as we speak. Our relationship with original equipment manufacturers (OEMs) is excellent and going in the right direction.”

The CEO rates shows such as IDEX highly: “Defence shows and air shows are extremely important, for a couple of reasons. One, you can showcase your products and programmes but, more important, is networking, where you meet all the key shareholders under one roof.”

Partly for that reason, SAMI was a strategic sponsor of the first World Defense Show, which took place in Riyadh in March 2022: “I’ve been in this market for 30 years and this was one of the best shows I’ve seen in my life,” said Abukhaled.  

Another attraction of IDEX is its cross-domain nature, covering everything except aerospace, which is handled by the Paris and Dubai air shows.

SAMI has been at IDEX since it started and will be attending again this year with a clutch of recent contracts under its belt: “Some are development projects, some are where we’re delivering products to our customer. We can’t talk about programmes, but I can tell you that some are major upgrade projects, some are MRO, and some are platform-related,” concluded Abukhaled.