Saudi Arabia's latest $991 million defense contract with Spanish shipbuilder Navantia is expected to contribute to the development of the kingdom's defense ecosystem.
SAMI Navantia Naval Industries (SAMI-Navantia), a joint venture between Saudi Arabian Military Industries (SAMI) and Navantia S.A., signed a $991 million (SAR 3.7 billion) contract on Wednesday, with the Spanish shipbuilder Navantia to collaborate on Combat System Integration (CSI) on the Avante 2200 corvettes for the Royal Saudi Naval Forces (RSNF).
According to SAMI, owned by the kingdom's wealth fund, PIF, the new deal will contribute to the development Saudi's defense landscape through the transfer of technology and creation of new job opportunities, in line with the Saudi Vision 2030 objective of localizing 50 percent of total military spending by 2030.
The agreement has the potential to boost the localization of the Kingdom’s technology capabilities by up to 60 percent and benefit other Saudi organizations, SAMI said in a statement.
Saudi Arabia has a $70 billion annual defense budget and a $30 billion security-related budget from other ministries.
Antonio Rodriguez-Barberan, CEO of SAMI-Navantia, said: This creates an excellent opportunity to capitalize on our strategic partner’s extensive experience in the design, construction, and integration of warships to build our own capabilities in the domain.”
The new contract builds on the JV partnership agreement signed by SAMI and Navantia last year to design and build five Avante 2200 corvettes for the Saudi navy.
Besides CSI, the new agreement will focus on system engineering and architecture, hardware design, software development, testing and verification, prototyping, simulation, and modeling, as well as logistical support and training programs.
SAMI plans to go heavy on localising military spending. In February, SAMI annoucned that it expects to generate $10 billion revenue in the five years and its exports to account for 30 percent of its revenue by 2030.
(Writing by Seban Scaria; editing by Daniel Luiz)
Our Standards: The Thomson Reuters Trust Principles
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here
© ZAWYA 2019