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Saudi's 2020 vision

Posted 12 June 2017 · Add Comment

Saudi Arabia has successfully built up an impressive indigenous military aerospace engineering capability, making advances, especially in maintenance, repair and overhaul (MRO). Jon Lake discovers that, not satisfied with the progress so far, the country has initiated a national industrial clusters development programme, which aims to double the manufacturing sector's GDP contribution by 2020.

In many nations, the military engineering progress made to date in Saudi Arabia would be the cause of great celebration, as well as a matter of justifiable pride. However, the Saudi armed forces are extremely secretive, and expect their suppliers to observe similar levels of discretion, so little information leaks out about military contracts.
Details of US-Saudi contracts emerge via the Defense Security Cooperation Agency’s statutory notifications to Congress, but the contractors themselves generally remain uncommunicative about work on Saudi programmes.
Local Saudi companies are often even more tight-lipped, and European contractors and governments are frequently even less communicative than their US counterparts.
But, while details of individual programmes, and particulars of the work of specific companies, may be hard to ascertain, there is a greater degree of openness about the broad thrust of strategic direction, and Saudi Arabia has made it clear that it aims to build a local military industry, eventually raising the proportion of military equipment bought from Saudi producers to as much as 50%.
The existing Saudi MRO companies will be vital in achieving the kingdom’s lofty aims. The companies have already demonstrated advanced capabilities in the fields of maintenance, repair and overhaul, and increasingly represent a small but strong industrial cadre.
In his 2014 paper, Defense Industrialization in Saudi Arabia and the UAE, Bilal Y Saab, resident senior fellow for Middle East security at the Brent Scowcroft Center on International Security, commented that “the old adage of Arabs don’t do maintenance no longer reflects reality”.
In some cases, Saudi MRO companies have already moved away from pure MRO activity to encompass limited assembly and manufacturing activities.
Some of the companies are already able to copy and reproduce existing technologies and are starting to be able to manufacture and produce at, or near, the technological frontier, and to be able to adapt existing technology to meet specific Saudi security requirements.
Alsalam Aerospace Industries is already manufacturing the wings, forward fuselages, and pylons and adaptors for the F-15SR (F-15S to F-15SA upgrade/conversion) programme in partnership with Boeing, and is undertaking the full conversion programme in-kingdom.
It will be very many years before self-sufficiency is achieved in most areas of military/industrial activity, thanks to Saudi Arabia’s still relatively limited technology and skills base. But developing these capabilities is a crucial step in the process of creating a sophisticated military industry that will meet the needs of the kingdom’s military forces.
It would be a mistake to view MROs simply as being a useful step towards final assembly, or even whole aircraft manufacturing. The biggest proportion of the cost of modern military aircraft lies in their through life support and sustainment, meaning that MRO can represent a more economically significant activity than manufacturing, as well as providing a greater source of high-value, high-tech employment over a longer period.
Providing this kind of support for an aircraft fleet may not be as ‘sexy’ as building the same aircraft type under licence, but it is probably more significant, more useful and more valuable.
Saudi Arabia’s MROs also help to ensure a greater role for the private sector in military production and industrialisation, and many believe that this will ensure greater efficiency and competitiveness than a wholly state-owned process.
But, while Saudi Arabia has impressive MRO competences, it lacks sufficient capacity to be able to maintain all of the Saudi armed forces modern western-supplied weapons systems without using foreign workers and even foreign companies. Some MRO contracts still go to companies based outside the kingdom, leaving scope for further investment in local MRO capabilities.
Saudi Arabia is not pursuing its drive for greater self-sufficiency alone.
When it attempted to establish an Arab Organization for Industrialization, it did so in association with Egypt, Qatar, and the United Arab Emirates, though the plan foundered in the wake of Egypt’s 1979 peace treaty with Israel, after which Gulf funding for Egyptian production capabilities became problematic.
Since then, Saudi Arabia has established a small arms industry with US and German help, while both Britain and the USA have worked hand-in-hand with local companies and joint ventures to encourage, establish, and enhance local industrial capabilities, and to assist with technical education and technology transfer.
While an expanded Saudi defence industry may provide competition to US contractors, the Obama administration urged Saudi Arabia and other Gulf Cooperation Council members to develop their own defence capabilities rather than depending on the US as much as they have in the past.
Developing local industrial capabilities will also help the nation to achieve the transformation envisaged under the kingdom’s Vision 2030 policy. This aims to diversify the Saudi economy by increasing non-oil revenues, while reducing unemployment, raising per capita income levels and increasing women’s participation in the labour market.
Unveiled by the Deputy Crown Prince, His Royal Highness Prince Mohammad bin Salman bin Abdulaziz Al Saud, the Minister of Defense and the chairman of the Board of Economic Affairs and Development, Vision 2030 aims to stimulate a real expansion of the industrial sector, achieving a historic and ambitious transformation in just 15 years.
Saudi Arabia’s nascent aerospace industry will play a vital part in Vision 2030, building on the foundations laid by King Fahd and, subsequently, by Prince Khalid bin Sultan bin Abdulaziz’s reforms in the first half of the decade.
In 1985, King Fahd issued the royal decree that led to the creation of the General Organisation of Military Industries to oversee and coordinate the kingdom’s existing indigenous defence programmes, acting as an overarching body for long-term defence planning.
In 2011, Prince Khalid bin Sultan bin Abdulaziz announced the creation of a new Saudi Armed Forces Command department, which would oversee local industrialisation and the transfer of military technology.
Probably the best-known military MRO in Saudi Arabia is Alsalam Aerospace Industries, previously known as the Alsalam Aircraft Company.
Created as part of the offset programme that accompanied Boeing’s sale of the E-3 Sentry airborne warning and control system (AWACS) to the Royal Saudi Air Force (RSAF), Alsalam was a joint venture 50% owned by Boeing Industrial Technology Group, 25% by Saudi Arabian Airlines, 10% by Saudi Advanced Industries Company, 10% by Gulf Investment Corporation, and 5% by the National Industrialisation Company.
The company has always operated as an MRO provider for the operators of Boeing commercial airliners and military aircraft, but has progressively expanded, providing in-depth aircraft maintenance and modification and all kinds of technical support services for airliners, military aircraft and business jets.
The company subsequently became a highly regarded VIP completions centre, and offered cargo conversions of a variety of airliners, while also providing MRO services for non-Boeing aircraft types.
It began to perform programmed depot maintenance (PDM) on RSAF Tornados in 1997, and started major checks on Saudi Arabian Airlines’ Airbus A300-600s from December 2001.
A marker of the company’s capability lies in the fact that Alsalam is, today, the only designated warranty centre for Boeing Business Jets (BBJ) in the MENA region.
More recently, since 2008, the company has established a number of specialised workshops for the design and manufacture of some aircraft parts and components, using locally and globally sourced raw materials, and working with aluminium alloys, carbon fibre composites, fibreglass and plastics.
The company’s manufacturing centre is licenced by the Saudi Civil Aviation Authority, and certified by the US Federal Aviation Administration and the British Civil Aviation Authority.
The F-15SR is probably Alsalam’s most ambitious programme to date. This designation covers the in-kingdom conversion of 68 existing surviving F-15S aircraft to the same standards as 84 new-build F-15SAs being produced by Boeing at St Louis, as well as the conversion of the second of two ‘prototype’ conversions in St Louis by an Alsalam team.
The first F-15S-to-SA conversion was undertaken by Boeing. These two conversions, together with two new-build F-15SAs, were delivered to Saudi Arabia on December 13, transiting via RAF Lakenheath in Suffolk on January 10.
The converted aircraft receive a new forward fuselage, new wings, and new outboard under-wing pylons, all of which are being manufactured by Alsalam.
The company has already achieved a Saudisation rate of 56% and is working hard to increase the proportion of local employees, with a target of 60% Saudi nationals for all new programmes.
Though it enjoys an enviable reputation and a leading position, Alsalam does not have a monopoly in providing MRO services to the aviation elements of the Royal Saudi Armed Forces.
BAE Systems has helped the RSAF to establish facilities (including a dedicated Typhoon technical zone originally intended for local final assembly) at King Abdulaziz Air Base at Dhahran, and some expect the RSAF to take back Tornado work from both Alsalam and BAE Systems.
The Riyadh-based Al-Raha Group for Technical Services (RGTS) is to provide integrated support services to Saudi Arabia’s fleet of F-15S and F-15SA Strike Eagles and will manage unclassified aircraft spares and support equipment, as well as supporting RSAF base stand-ups and F-15 and F-15SA flight operations under a $355.9 million foreign military sales (FMS) contract placed by the US Air Force in 2016.
The Mohawarean International Group (MIG) and subsidiary, the Saudi Aerospace Company (SAC), are increasingly entering the expanding defence, aviation, security, logistics and communication markets, providing professional services for domestic and international clients in both civilian and military sectors.
The company was shortlisted to provide MRO services to support the RSAF’s Cougar and Super Puma helicopters at King Khalid Air Base, and is heavily involved in providing training for the RSAF’s F-15 force, as well as employing contiguous United States (CONUS)-based pilots for the F-15SA programme.
Though best known as the leading Saudi civilian MRO operation, having been reconstituted as a full-service MRO under the 2009 Saudi Arabian Airlines privatisation programme, Saudia Aerospace Engineering Industries (SAEI) serves both civil and military customers. Its new $1 billion, 1,000,000sqm facility at King Abdul-Aziz Airport in Jeddah will compete with other Saudi MROs for military work.
Interestingly, SAEI is working together with Boeing and Alsalam to create the new Saudi Rotorcraft Support Centre, which will support military and commercial rotorcraft platforms in Saudi Arabia, including Boeing’s AH-64 Apache, CH-47 Chinook and AH-6i Little Bird.
Other companies concentrate on providing more specialised support for particular aircraft systems or sub-systems.
The Middle East Propulsion Company (MEPC), in Riyadh, is the sole military engine MRO provider in the kingdom and provides support for the Pratt & Whitney F100 engines used by the RSAF’s Boeing F-15 fighter aircraft.
Other specialised equipment support providers include the Advanced Electronics Company, which has teamed up with Lockheed to sustain the Sniper advanced targeting pods, the low altitude navigation and targeting infrared for night (LANTIRN) extended range navigation pods, and the infrared search and track (IRST) systems used on the RSAF’s F-15 fleet.
The company also licence-built the Thales Damocles pods used by the RSAF’s Tornado and Typhoon fighter-bombers.
As time goes by, many expect an ever-greater domination of the Saudi MRO market by local companies, with an ever-greater proportion of Saudi engineers and technicians. If the Alsalam Aerospace Industries experience is anything to go by, progressively greater local manufacturing capabilities are also likely to emerge.

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