Lockheed Martin (LMT.N) will invest more than $1 billion in manufacturing in Saudi Arabia, a senior executive said on Tuesday, as the kingdom looks to use its clout as a major arms buyer to help diversify its economy away from oil.
Ray Piselli, Lockheed’s vice president of international business, told broadcaster Asharq Business the funds would support efforts by Saudi Arabia’s military industry regulator GAMI and state-owned defence firm SAMI to boost local industry.
“Funds will be allocated to facilitate manufacturing, R&D and MRO (maintenance, repair and operations) initiatives across the kingdom, by investing in and upskilling Saudi industry,” a Lockheed Martin spokesperson said in a statement to Reuters.
With more than $45 billion budgeted for military spending in 2022, Saudi Arabia has made developing a domestic industry central to a multibillion-dollar transformation plan initiated by its de facto ruler Crown Prince Mohammed bin Salman, known as Vision 2030.
Piselli said Lockheed Martin would invest in opportunities with local companies and government entities to base some of its industry in the kingdom, without giving details.
On Monday, GAMI said it was working with Lockheed Martin to make some of the parts for its THAAD missile defence system in Saudi Arabia.
Piselli said Lockheed Martin had big contracts with Saudi Arabia. In addition to collaborating on building parts, it wants to include the kingdom in global supply chains and create an export market. Revenues from Gulf Arab countries reached $4 billion in 2020, he said, without giving a more recent figure.
Saudi Arabia’s industry minister said on Monday Riyadh attracted 81 billion riyal ($22 billion) of investment into the industrial sector in 2021.
U.S. group Raytheon Technologies Corp (RTX.N) was quoted as saying on Monday it planned to move production of some parts of its Patriot missiles to Saudi Arabia.