New driving force

AFED 2018 reveals Saudi capabilities in localizing defense sector


Saudi Gazette

AFED Exhibition, which had a successful run in Riyadh, emphatically proved the seriousness of the Saudi government to localize the defense sector. It also provided a great opportunity to demonstrate that the Kingdom is replete with capable workforce and is full of promising factories that operate under the supervision of national hands.

In this regard and to shed some light on the unmatched success of the exhibition and the procedures taken by the Kingdom to localize the sector and the huge investment opportunities it has, Saudi Gazette met with Gen. Eng. Attiyah Almalki, head of the General Administration Office for Local Manufacturing Support and the spokesperson for AFED 2018.

"We have capabilities in the Kingdom, though we are using supplies from outside because we used to. However, when we started to use local capabilities in the Kingdom, we noticed that local products are of very high quality. We are now working hard with local capabilities to sustain our platforms by using our capabilities as factories to supply mainly consumable items," he said.

Almalki clarified that this decision of using local capabilities has many advantages such as the consumable items have high consumption rate and can be quickly produced. "They are also affecting the readiness for the platforms. No IB and ITAR (International Traffic in Arms Regulations) behind them. It could be manufactured everywhere. Also the big international companies around the world are not manufacturing these small items. They are designing the items and using suppliers. When we make our suppliers ready for the quality, competition and delivery timing, I am sure our factories will be ably to supply us and for international factories as well."

Speaking of the space for development and understanding the shortcomings, he stressed: "We are working with different entities to understand where the gaps are in order to bridge them. The gaps, from our observations and analysis, are small. We discovered lots of companies that are able to produce sustainable items. If we use our local factories, we will increase the technicians' skills, enhance the quality because we will experiment and communicate our feedback so as to enhance the quality and the experience. We will also get more business, because if there is quality, there will be competition in pricing. Local products cost less than 50% of the international products while the quality is the same."

One of the crucial things in this industry is timing. "Sometimes when products are ordered from overseas, they could take up from 6 months up to 3 years to be delivered. However, local products do not take more than 3 months."

When asked about the cooperation between public and private sector entities, he emphasized: "We are close to each other but we are going solo. That is why we created this exhibition to be a platform for all types of specialty within the industry. We had more than 30 agreements between different local companies for cooperation in different aspects. I can see the government factories; offset companies and the private sector working together to make high quality products in good time and with good pricing. We are working towards achieving the promising Vision 2030 in which 50% of the sector must be localized."

This target will be reached through certain measures such as: "We put a condition for all the international companies we are collaborating with that they have to either transfer 50% or use 50% of the Saudi factories. If the item is not in the Saudi factory, they have to transfer it and if it is in the Saudi factories then they have to use it. Secondly, we are working closely with our military in general not only the Ministry of Defense (MOD) to communicate our demands and needs to get the best results and outcomes. We are working now to put all military contracts under one organization. Therefore, they can control the specification and requirements. We gave 83,000 line items presented now to both local and international companies. They are considered great investment opportunities.

“And 68 international companies, which have contracts with us, are participating in AFED to localize our products from the Saudi factories and to make partnerships with Saudi factories as well. We have requirements and capabilities; the government is linking the procedure and the capabilities. All government agencies are here to see the obstacles and to correct them.

“More than 100,000 visitors, more than 30 agreements and more than 800 Saudi factories apply for our line items. I think the number will increase. The future of this sector is very promising and we are looking forward to achieve the Kingdom's vision in empowering our local capabilities and localization of the sector,” he said.