Saudi ‘localisation’ in defence is powering a whole new ecosystem
THE SAUDI ARABIAN government’s plan to localise defence spending means that a whole ecosystem is growing up around the sector.
One man delivering his small part of that is Arno Luecke, born in Germany but now in Saudi Arabia for 10 years. His company – MEMR – provides maintenance, repair, and logistics support for maritime traffic, for both military and civilian clients. The firm is growing rapidly, providing expertise in Saudi and looking increasingly to turn its Saudi base into a global hub.
“I saw the opportunities coming up, the expertise that was missing in-country, what could be added to the eco-system,” he told Inside Saudi from the sidelines of the World Defence Forum.
Those opportunities have expanded over the past decade as Saudi Arabia has expanded its defence spending and its presence at sea. Vision 2030, however, will supercharge Saudi’s own drive towards localising spending.
“The government is supporting the local businesses, local companies, to a huge extent.”
The growth he now has in mind is in manufacturing. First, Leucke says, was a service business. Now he wants to start designing and building his own boats, from 10m to 30m boats.
“The challenge is to bring in the engineering know-how into the country,” he says, but he thinks that is soon to change. “We have focussed on building the right international set-up, but we can transport the information (from overseas) into the Kingdom. We now have five different boat designs, which will be built in Saudi Arabia, and that’s the next step.”
For Leucke, leaning into the Saudi business ecosystem has proved invaluable. He says many of his most positive relationships have come through the building up of mutual trust. Many businesspeople, Leucke says, are in Saudi only for a couple of years. His long-term commitment to the country, though, has been noted, and that’s in turn allowed him to turn his outlook into a Saudi outlook, not an expat one. That leaves him well positioned.
“I am amazed, on a daily basis, to see the government pushing and supporting the (localisation drive). They have support programmes on human resources, initiatives to send people abroad for training, initiatives in-country for businesses to employ Saudi citizens. It’s amazing the amount of support you receive here,” he says.
“Once we establish the capability in-country, I believe we’ll get the full support of the country to go abroad.”
Localising spending, then, is not just about manufacturing locally – but becoming an exporting hub, too. Leucke and others like him are on the cutting-edge of that push.