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Saudi Arabian Military Industries SAMI a wholly-owned subsidiary of the Public Investment Fund PIF and the National Champion of Military Industries Localization saturday signed a joint venture agreement with Frances FIGEAC AERO Group and the Saudi Arabian Industrial Investments Company Dussur announcing the establishment of SAMI FIGEAC AERO Manufacturing LLC which aims to build a high-precision manufacturing facility in Saudi Arabia to produce aerostructures components. The agreement was signed by CEO of SAMI Eng. Walid Abukhaled and Chairman and CEO of FIGEAC AERO Jean-Claude Maillard and CEO of Dussur Dr. Read Al-Rayes.The joint venture aims to develop Saudi Arabias aerostructure manufacturing capabilities train Saudi engineers and technicians to work as part of the project and boost the localization of military and civil aerospace industries in line with Saudi Vision 2030. Initial products will focus on machining and processing of light alloy aluminum and hard metal titanium aerospace parts.Commenting on the announcement Chairman of SAMI Ahmed bin Aqeel Al-Khateeb said Through the establishment of this new joint venture we at SAMI have further strengthened our commitment to supporting the development of a robust indigenous military industries sector in Saudi Arabia. By creating a distinctive partnership between local companies and a leading international player we aim to accelerate the localization of advanced technologies in the aerostructures domain. In doing so we shall also increase investment flows and create high-quality job opportunities for Saudi youth in line with the targets outlined in Saudi Vision 2030.CEO of SAMI Eng. Walid Abukhaled stated The signing of todays joint venture agreement marks a significant step in our drive to strengthen Saudi Arabias aerospace ecosystem through global strategic partnerships. Together the three signatories will collaborate with Saudi authorities and regulators to identify opportunities for the transfer of technology and expertise to the Kingdom enhancing the local content and creating exciting opportunities in both the commercial and military aerostructure manufacturing industries.In todays circumstances with so little visibility on the short term finalising this partnership will create a real opportunity for FIGEAC AERO. It will not only enable us to establish a commercial footprint in the Middle East but also allow us to access Saudi Arabias military and commercial industrial offsets markets points out Jean-Claude Maillard Chairman and CEO of FIGEAC AERO. Our shareholding in SAMI FIGEAC AERO Manufacturing LLC will be a minor one but the Saudi companys future investments will be backed by robust local and state banking partners. We will have a crucial role to play in laying the foundations of Saudi Arabias future aerospace industry.For his part CEO of Dussur Dr. Raed Al-Rayes said This joint venture marks an important milestone in developing the industrial metals value chains in its highest application aerospace. In line with Dussurs mandate to grow strategic industries in Saudi Arabia the joint venture will connect the Kingdom to the global aerospace OEMs supply chain unlock development of the aerospace industry in Saudi Arabia and serve as a catalyst for future growth. Further it will enable the flow of operational know-how to the Kingdom and give rise to the localization of aerostructure components manufacturing.The joint venture follows the signing of a Memorandum of Agreement MoA in 2019 at the International Paris Airshow. Its establishment was finalized upon receipt of all necessary regulatory approvals from the Saudi General Authority for Competition GAC which issued a No-Objection Certificate with respect to the completion of the economic merger between the three companies. The joint venture also successfully secured approvals from five other regions including the European Union. Shares in the new company will be distributed between FIGEAC AERO as a minority shareholder and SAMI Dussur Aeronautics LLC a partnership between SAMI and Dussur.Over a 10-year period the project will encompass a series of major investments most of which to be financed by local financial institutions including the launch of a new production facility in Jeddah located at the site of the Aircraft Accessories and Components Company AACC. Currently four cutting-edge 5-axis CNC machines and supporting production equipment are being commissioned by FIGEAC AEROs technical teams to manufacture the first products by the end of year 2021.Phase One involves ramping up the facility which is scheduled to be completed by 2024 for an investment of about USD 50 million approximately equivalent to SAR 187.5 million including machines infrastructure training and certification and aiming to generate USD 10 million approximately equivalent to SAR 37.5 million revenue by the end of year 2024. SAMI FIGEAC AERO Manufacturing LLC will be equipped with fourteen state-of-the-art machining units and employ over 60 local people. This joint venture has signed a service contract worth about USD 40 million approximately equivalent to SAR 150 million under which FIGEAC AERO will provide SAMI FIGEAC AERO Manufacturing LLC with a full range of industrial and technical assistance and transfer the relevant industrial know-how. Further the three partners will collaborate with the Saudi authorities and regulators to identify and capture opportunities for localization in both the commercial and military sectors.
