Saudi Arabia is currently in talks with major arms manufacturers of South Africa for wide-ranging deals, a state military firm says, as a Riyadh-led military coalition continues to pound the impoverished Yemeni nation in a war imposed on the Arabian Peninsula country more than three and a half years ago.
Saudi Arabian Military Industries’ (SAMI) Chief Executive Andreas Schwer said on Wednesday that he expected to finalize the first partnership deals with South African arms companies by the end of the year, without mentioning the initial partners by name.
The Arab kingdom is considering an equity stake in the struggling South African state-owned military firm Denel. The African country’s Department of Public Enterprises, which oversees Denel, confirmed that it was in talks with SAMI, but said it was too early to give details of any potential partnership deal.
Separately, the South Africa-based Paramount Group, a privately-held group of companies operating in military and aerospace business, has already announced that it is in talks with Saudi authorities.
“To make it clear, we are in discussions with all major South African companies, not only Paramount, not only Denel,” Schwer said in a telephone interview with Reuters.
Saudi Arabia, the world’s third largest military spender after the United States and China, allocated an estimated military budget of nearly $70 billion last year.
“We are in discussions with the South African government in order to identify opportunities to set up strategic partnerships which could include an equity investment from our side into Denel. It’s not decided yet, but it’s one option,” Schwer further said.
He added that Riyadh hoped to get access to South African arms firms’ technology. “They have to commit to transfer their technology to Saudi Arabia and to build up together with us local capabilities, not only manufacturing but also engineering.”