[Services] Localisation, an imperative for Naval Group Arabia

19 February 2024 International Fleet services

Naval Group is present in Saudi Arabia through its subsidiary Naval Group Arabia, established in Riyadh in 2013 and governed by Saudi Arabian law. A four-year support contract was concluded with the Saudi Ministry of Defence following an initial Technical Support Service contract for Sawari I and II frigates. In effect since June 2022, this support contract includes technical assistance, supply of spare parts and the implementation of upgrades on Sawari II frigates. This contract is built on localisation, an imperative for any foreign company working in Saudi Arabia.

The localisation of industrial production meets the objectives of the Saudi Vision 2030 development plan aimed at diversifying the kingdom’s economy. “As far as Naval Group Arabia goes, this is reflected in the growing proportion of local content and services. While this goes for all sectors of activity, it is particularly true for defence, which represents the kingdom’s first budget”, explains Alain Maurric, Program Director. Within this framework, it is the General Authority for Military Industries (GAMI) that verifies the localisation of resources for defence industries. “Practically speaking, more than half of the budget of the Saudi Ministry of Defence will have to be invested locally by end 2030”, explains Amin Temagoult, Purchasing and Localisation Manager for Saudi Arabia.

A multifaceted contract

As part of the “four-year” contract, Naval Group delivers technical assistance to the Saudi Navy’s logistic entities and provides spare parts for Sawari I and II frigates. A team of eighteen employees in Djeddah and four in Riyadh are engaged in this work.

Keeping the kingdom’s localisation objectives in mind, Naval Group Arabia, with a catalogue of over 8,000 references, is looking to qualify new local suppliers. In line with this endeavour, a local company capable of manufacturing seals for the Royal Saudi Navy is in the certification phase to guarantee their conformity. The subsidiary has also concluded an agreement with a French manufacturer based in Saudi Arabia for the assembly of Saudi made circuit-breakers onboard the ships. “We also provide for the Royal Saudi Navy’s engineering needs, jointly exploring unprecedented methods of repair, to give one such example”, adds Alain Maurric. 

The contract also includes upgrade operations for each of the three Al Riyadh class frigates (Al Riyadh, Makkah and Al Dammam). Naval Group is responsible for the whole value chain, from upstream studies undertaken in France right up to sea trials in Saudi Arabia.  

Teams and training

Naval Group’s localisation effort also involves delivering training, with more than 50 engineers and technicians to be trained over a three-year period. Another aspect includes recruiting around ten local employees including technicians and engineers who will be trained over a one to three-year period by French senior employees, with the ultimate aim of taking over down the line. “We will also be integrating four Saudi employees into program teams in the fields of purchasing, quality, supply chain and contract management”, adds Amin Temagoult. Naval Group will be training employees for these activities as well.