SAMI was founded in May 2017, to become a “national defence champion” for the Kingdom of Saudi Arabia, working under the directives of the country’s “Saudi Vision 2030”. A wholly owned subsidiary of Saudi Arabia’s Public Investment Fund, the company’s goal is to become one of the top 25 defence companies in the world by 2030, while also taking crucial steps to localise half of Saudi Arabia’s total government defence spending.
“The Kingdom of Saudi Arabia has one of the largest defence budgets in the world,” points out SAMI’s CEO, Eng. Walid Abukhaled. “As such, the decision was issued to launch a national defence champion and a regulator for the defense industry, which is the General Authority for Military Industries (GAMI).”
To achieve that goal, SAMI’s strategy is to develop world-class defense products and services that would not just be competitive and market-leading but would lead to the Kingdom of Saudi Arabia achieving self-sufficiency in the defence industry, with the best national talent and cutting-edge technologies.
These capacities are being developed in such a manner that they can compete with international standards and be scaled up alongside the Saudi defence sector, enabling it to secure necessary supplies for its clients.
“We started our operation in January 2018, as a company 100% owned by the Public Investment Fund (PIF), but we are very commercially orientated,” Eng. Abukhaled explains. “We think long-term in pursuit of our goal to be one of the top 25 defence companies in the world by 2030.”
Building Alliances
SAMI will not be able to achieve that goal on its own, and so from the outset, the defence champion has sought out ways to build relationships and partnerships with other businesses.
“As a national defence champion, with only four years of operations, we have worked hard to establish joint ventures with global companies worldwide,” Eng. Abukhaled tells us. “No other defence company has the ties we have with a variety of international companies. We have 12 strategic joint ventures with companies such as Airbus, General Dynamics, and Navantia, in Spain, our first joint venture.”
One of the most recent partnerships SAMI has forged has been with the Boeing Company, the largest aerospace company in the world and a leading manufacturer of commercial jetliners, defence, space, and security systems. It is also a provider of aviation services to both the commercial and defence sectors.
His Excellency Ahmed Al-Khateeb, Chairman of SAMI, said on signing the agreement, “As we move towards the realisation of our Vision 2030 ambitions for a strengthened defence industry, our long-standing relations with industry leaders such as Boeing will further our success. This joint venture will help to enable more defence manufacturing to take place in Saudi Arabia, ensuring that jobs and prosperity remain in the Kingdom of Saudi Arabia – now and for generations to come.”
Eng. Abukhaled added, “The maintenance of the rotary fleets operated in Saudi Arabia by the different forces represents a major opportunity for localisation and development of new sustainable skills. Much of this work is currently outsourced to the US or Europe, while aircraft numbers in Saudi Arabia are expected to double in the next ten years. We also see this joint venture as the first step towards a broader strategic partnership between Boeing and SAMI that will encompass additional platforms and services in the future.”
Boeing and SAMI have worked together to establish a limited liability company that will provide maintenance, repair and overhaul and sustainment services for the military rotary platforms currently operated in Saudi Arabia.
It will be a valuable step for SAMI in its quest to achieve a top 25 position amongst defense companies globally, but the joint venture is also a valuable opportunity for Boeing.
“We are proud of the long-standing 77-year relationship that Boeing has with the Kingdom of Saudi Arabia,” said Torbjorn Sjogren, VP of Boeing International Government & Defence Organization. “This agreement will provide maintenance, repair, and overhaul services for Saudi Arabia’s rotorcraft platforms. It is an excellent example of our alignment with the Kingdom’s Vision 2030. We are committed to our partnership with SAMI and will continue to work with our stakeholders in the Kingdom to execute Vision 2030.”
Parallel to building these partnerships with international companies, SAMI is also proving to be a valuable resource for local businesses and customers.
“At the same time, we have built excellent relationships with our customer community to enable us to work as partners,” Eng. Abukhaled tells us. “That strategic relationship with customers is essential, as they have some of the highest requirements in the defence and security sectors. That, alongside our joint ventures with the best global OEMs in the world and some of the best local companies in Saudi Arabia, puts us in a unique and special position to deliver on customer requirements.”
All these relationships underpin SAMI’s partnerships with its customers, Saudi Arabia’s armed and security forces.
“Those relationships are like any other customer relationship, with their own challenges. You need to be ready and position yourselves to provide genuine advancements while delivering on time and to the quality and price levels they expect,” Eng. Abukhaled says. “We work hand-in-hand to ensure we meet their requirements and expectation.”
Land, Air, and Sea
These partnerships have worked well for SAMI, with the company experiencing 2,407% year-on-year revenue increases and growing its employee base by 633% in 2021.
The company’s strategic plan to position itself amongst the top 25 defense companies worldwide by 2030 will roll out across every aspect of the defence industry. In the aerospace industry, SAMI will work to build a national aerospace industrial ecosystem alongside a sustainable and profitable combat mission that will bring the Kingdom of Saudi Arabia to the forefront of localised capabilities innovation across manufacturing, support operations, and MRO.
In relation to the SAMI Land business division, SAMI is working to develop and build local capabilities across the entire spectrum of defence industries, engineering, manufacturing, producing, assembling, testing and maintaining advanced land systems. On the other hand, SAMI Sea is developing a range of high-quality sovereign naval capabilities for Saudi Arabia, supported by industry-leading technologies with intuitive, robust designs ideally suited to withstand a wide range of marine conditions.
In the “Defence Systems” business division, SAMI plans to usher in a new era of state-of-the-art defence systems, leading with precision, perfection, and passion to create premium quality defensive munitions and weapon systems for customers internal and external alike.
The company is also developing advanced electronics defence capabilities through integrated and comprehensive technical solutions that will enable the local development and production of over 50% of the products and services the Saudi defence and security sectors need.
Across all these sectors, SAMI’s growth is fuelled by innovation.
“We pay a lot of attention to innovation, empowering our employees to find new ways of doing things and new projects to work on,” Eng. Abukhaled says. “Our Chief Technology Officer looks at what needs to be done and trains our employees to handle new, advanced technologies. We have a culture internally that promotes innovation and rewards our employees for it.”
Growing Pains
It is clear, talking with Eng. Abukhaled, that SAMI has big plans for the future, but to achieve those plans, the company needs to grow fast, and growth brings its own challenges.
“We are facing multiple challenges. We are growing extremely fast, and with growth comes responsibility,” Eng. Abukhaled explains. “I started my job in September 2019, and our employees numbered only 120. Today we have 3,500 employees, with an additional 1,500 coming in in 2023. We started with just our headquarters, but now that headquarters has expanded and we have many subsidiaries and joint ventures as part of the corporation.”
SAMI’s strategy is to control its growth in a way that will help it deliver on its commitments in a short period of time.
“There is still a reformation taking place, and we need to manage ourselves and our stakeholders to keep in line with that reformation,” Eng. Abukhaled says. “We are doing well and managing to control our growth.”
A Globally Competitive Team
SAMI ensures that all its people share its ambitious vision by carrying out an Annual staff engagement survey across its staff through an independent party.
“Year after year, we always go above the global benchmark, and we expect this to continue,” Eng. Abukhaled insists.
But as well as ensuring its people share SAMI’s values, the company also wants to arm them with the skills and expertise they need to be a globally competitive force.
“We double down on our technology training and expand our in-house training programmes from senior leadership training to general training for first graduates,” Eng. Abukhaled says. “With our global partners, we can offer international training opportunities, such as our agreement with Navantia. We have 31 Saudi male & female engineers working in Spain, hand-in-hand with Spanish engineers, and then bringing that know-how back to us.”
Through SAMI’s powerful partnerships with OEMs, the company is working together with experts in South Korea and the UK.
“We’re working extremely closely with our customers to help overcome our key challenges,” Eng. Abukhaled says. “We focus on building very strong local leadership to run the company, and from that foundation, we can act as a global company as we move into the future. We are proud of our partnership with Harvard, where we have established a programme to ensure we are capable of handling very complex problems and building a complete defence ecosystem.”
Fortunately, Saudi Arabia is a country with a rich pool of talent to draw upon.
“We are blessed that 60% of our population is below the age of 30. That gives us lots of recruitment opportunities,” Eng. Abukhaled points out. “Saudi Arabia has graduates from the best universities around the world coming back here. So, the question of recruitment comes down to how to select the best of the best and the cream of the cream. We monitor the performance of our employees on an annual basis. The most important aspect of our company is our people, and we look after them very well to ensure the company’s growth.”
That team is brought together and guided towards its Vision 2030 goal.
“The leadership in the Kingdom of Saudi Arabia has given us some amazing top-line support. Without it, we would not have achieved what we have so far. The Saudi armed forces and security forces are supporting us extremely well,” Eng. Abukhaled tells us. “With our own employees, they have been dedicated to delivering our mandate. We offer more than a job like any other company. We are doing something to help our own country, so our people are fully aligned with Vision 2030.”
That vision is not just about the future of SAMI as a company, but about serving our country.
“When it comes to CSR, the company is engaged in a lot of activities,” says Eng. Abukhaled. “We continue building partnerships with international OEMs, supporting a very strong Saudi supply chain. We ensure our capabilities are maintained within Saudi Arabia, developing that supply chain. We work in unison with our customers in land and naval forces. In addition, we work with our armed forces, visit hospitals, and deliver key programmes for our customers, and we will continue to do this.”
It all comes down to the Saudi Vision 2030 and SAMI’s ambition, which is to be among the top 25 leading defence firms in the world by 2030.
“We have a clear goal,” Eng. Abukhaled says. “We are already in the top 100 defense companies after only four years of operations. If you look at the numbers, that gives you a great impression of our position as a national defence champion. We are now looking at local and global acquisitions to ensure we can deliver on our key mandate and achieve that goal.”
