On Sunday, the 17th of February, 2019, the OPEC kingpin and the most prominent face among Gulf countries, Saudi Arabia had signed a multi-billion preliminary contract with France’s Naval Group to build navy warships in the country, a part of its program to flesh out fresh domestic manufacturing capabilities.
The announcement came early on Sunday (February 17th), at the IDEX Military Exhibition in Abu Dhabi, UAE, and the kingdom’s state defense company, Saudi Arabian Military Industries (SAMI) had made the declaration, saying that the latest agreement would include manufacturing of warships, frigates and other relevant items in Saudi Arabia.
Since Saudi Arabia had been fighting a costly war with Yemen since 2015 in the support of an internationally recognized government against an armed movement of Houthi, mostly backed by Iran, the Gulf crude oil kingpin had been amongst the top five defense spenders in the world.
After making the announcement of a joint venture with French Naval Group to build navy warfare, in a question and answer session with the reporters, the SAMI chief executive, Andreas Schwer had been quoted saying that the majority stake of this joint venture would be owned by Saudi’s SAMI, while the French firm would be holding 49 percent stakes.
In fact, the Naval Group is partly owned by the French government with a stake of 62 percent and by the Thales Group, having a stake of 35 percent. Citing the joint venture as a great opportunity for the Saudi Royal Navies to enhance their capabilities, Andres Schwer added, “Through design, construction, and maintenance activities the joint venture will contribute significantly to further enhance the capabilities and readiness of the Royal Saudi Naval Forces.