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The Defense Ministry will for the first time allow local firms to bid to supply basic materials excluding arms with the long-term goal of encouraging a domestic military industry, officials said.
The move, which will open a field that was reserved for foreign manufacturers, will first involve some 15,000 items that range from plastic to pipes, covers for jet engines and batteries, Col. Attiyah Al-Maliki said at a meeting with businessmen in Riyadhs Chamber of Commerce late Saturday.
The relevant authorities expect the move - backed by Prince Khaled Bin Sultan, Assistant Defense Minister - to encourage foreign suppliers to partner with Saudi peers and set up shops within the Kingdom so that they can continue to qualify as suppliers.
The Defense Ministry created a Central Committee for Local Industrialization, which comprises business leaders and defense officials to develop local capabilities, ensure speedy deliveries and reduce costs, Colonel Maliki said.
Abdul-Rahman Al-Zamil, a member of the committee and chairman of a large industrial group, welcomed the move.
This is a breakthrough for local firms because before all purchases were internationally tendered or bought from abroad by local suppliers. We know that these (15,000) products can be made locally, Zamil said at the meeting.
None of the items are weapons or heavy military gear.
The Defense Ministry will gradually eliminate from international tenders all items that can be produced here ... We are working for the next 20 years, Zamil said.
This is just the beginning ... So the field remains open, said Col. Maliki. We will gradually open up to more sophisticated industries. Nothing should prevent Saudi Arabia from making its own fighter jets.
Saleh Kamil, the President of the Council of Saudi Chambers of Commerce and Industry, welcomed the move, describing it as unprecedented.
The Saudi sector has before it a golden opportunity for profitable investment in armed forces-related industries such as spare parts and other materials, Kamil said. Saudi businessmen from companies and factories working in related fields should now visit the Armed Forces Exhibition being held by the Ministry of Defense to see how they can become involved in manufacturing products for the armed forces, and see from close up the investment opportunities available and hear from officials at the Ministry of Defense themselves what their exact requirements are.
The move will support national economic growth and the national manufacturing industry, Kamil continued.
It will also create job opportunities for young Saudis and give a boost to related technologies.
The Kingdom is among the most lucrative markets in the region for international arms makers. It spent SR154.8 billion ($41.3 billion) in 2009 - or 32.6 percent of its GDP -on defense and national security, according to central bank data. This sum includes salaries of the military and security forces.
