Zamil wins $153m deal to build Saudi defence complex

Reuters/Ahmed Yosri

• Builder named for Al Kharj site
• Defence budget for 2024 is $72bn
• Vision 2030 aims to ‘localise’ spend

A Dammam construction company has won a SAR575 million ($153 million) contract to build a defence manufacturing complex in Al Kharj, central Saudi Arabia.

Zamil Steel Construction Company agreed the deal with Saudi Arabian Military Industries (Sami), a Public Investment Fund company set up to lead the development of the kingdom’s defence industry.

The Al Kharj complex will develop, design and manufacture land defence systems, according to a filing by Zamil’s parent company on the Saudi Stock Exchange.

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Zamil will build the manufacturing facilities, utility buildings and admin offices at Al Kharj, as well as providing structural and civil engineering services, finishing and mechanical, electrical and plumbing works. 

Saudi Arabia is one of the world’s biggest spenders on defence, particularly as a proportion of GDP.

It was fifth in GlobalData’s military spending list for 2022 with $65.3 billion, behind the United States, China, Russia and India.

However its spending in the period 2019-2023 represented 7.9 percent of GDP, compared to 3.1 percent for the US.

The defence budget for 2023 is $69.1 billion. In the kingdom’s 2024 budget, approved earlier this month, defence was allocated almost $72 billion out of a total expenditure of $333 billion.

GlobalData forecasts that Saudi military spending will grow 4.5 percent a year up to 2028, reaching $86.4 billion.

Much of this funding goes to foreign businesses, however, so the Vision 2030 strategy includes a plan to “localise” 50 percent of military spending.

Sami announced plans in February for the Al Kharj complex, which is set to manufacture armoured vehicles and advanced ground systems.

Zamil is part of Zamil Industrial Investment Company, which employs about 9,000 people and sells products in more than 90 countries. It has factories in Saudi Arabia, the UAE, Egypt, India and Vietnam.