Milkor is firmly committed to establishing a local entity in Saudi Arabia and has reached a significant milestone in this process with the granting of an investment license that allows it to become a Saudi military equipment manufacturer.
During the World Defence Show in Riyadh in March, Milkor signed a Memorandum of Understanding with the Ministry of Investment of Saudi Arabia to establish a local entity inside the Kingdom. The investment license has been granted and registration is ongoing.
The inaugural World Defence Show is an indication of Saudi Arabia’s seriousness in becoming a leader within the defence technology sector, and provides a glimpse into the future of the country becoming self-sufficient and a powerhouse of manufacturing and development.
Milkor Saudi Arabia CEO MC de Beer said, “The investment license allows us as a foreign entity to continue with the legal registration of the new company, which will be a military equipment manufacturer and a considerable amount of vetting and trust building had to be done to achieve this milestone.”
The company believes the progress and support received from the Saudi government is a good indication on the future of the new entity.
“We are proud of the outcome and appreciate the support and modernised mechanisms put in place by the Saudi government to efficiently establish a foreign-owned entity; this only demonstrates their seriousness in making the industry thrive”, de Beer said.
Milkor is engaged in high level discussions with potential future equipment end users of its products, which range from armoured vehicles to patrol boats, multiple grenade launchers and unmanned aerial vehicles. “We respect the fact that procurements of these systems take time, however with the solid foundation that has been built throughout the years with current relationships and the driving ambitions of new relationships we are highly optimistic,” de Beer said.
Milkor is aligned with Saudi Arabia’s Vision 2030, which aims to reduce Saudi Arabia’s dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation, and tourism. Milkor’s contribution includes 100% indigenous manufacturing and Milkor will also involve local industry in the form of subcontracting and project-based cooperation.
Milkor aims to tap into Saudi Arabia’s substantial defence budget, which stands at $46 billion (R760 billion) this year, according to the Kingdom’s budget statement.
According to Armand Bodenstein, Business Development Director at Milkor, “This latest international expansion does not only present Milkor with the opportunity to tap into the local market within the Kingdom of Saudi Arabia in line with their localisation policy, but it also presents a new opportunity to share in the knowledge base available within the two countries and allows us to redirect resources back into the South African industry.”
Milkor’s Saudi office is its third internationally, after India and the United Arab Emirates. With the primary focus on localisation and the development of in-country capabilities, the establishment of international offices allows Milkor to develop new relations with local military markets and continue to be at the forefront of technological innovations.
Building on its reputation as the original manufacturer of the now widely popular 40 mm multiple grenade launcher, Milkor has become a specialist in the fields of Unmanned Aerial Vehicles (UAVs), armoured land vehicles, and naval vessels. Its diverse product portfolio now ranges from single shot and six-shot grenade launchers to armed and unarmed unmanned aerial vehicles, the Milkor IPC (Inshore Patrol Craft) and Milkor 4×4 Armoured Personnel Carrier.