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Major Contracts, Deals on Day Two of Saudi World Defense Show

At the exhibition in Riyadh, KAI is showcasing advanced air combat systems like the FA-50 and KF-21 fighter jets, along with the Advanced Airborne Vehicle (AAV).
At the exhibition in Riyadh, KAI is showcasing advanced air combat systems like the FA-50 and KF-21 fighter jets, along with the Advanced Airborne Vehicle (AAV).
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Major Contracts, Deals on Day Two of Saudi World Defense Show

At the exhibition in Riyadh, KAI is showcasing advanced air combat systems like the FA-50 and KF-21 fighter jets, along with the Advanced Airborne Vehicle (AAV).
At the exhibition in Riyadh, KAI is showcasing advanced air combat systems like the FA-50 and KF-21 fighter jets, along with the Advanced Airborne Vehicle (AAV).

The second day of the World Defense Show, founded by Saudi Arabia’s General Authority for Military Industries (GAMI), saw a flurry of deals and contracts announced by local, regional, and international defense companies.
These deals included agreements for manufacturing and localizing defense systems, joint manufacturing ventures, and various partnerships in the defense sector.
These agreements align with Riyadh’s efforts to strengthen military industries by localizing defense manufacturing.
At the exhibition, which concludes on Feb.8, the Saudi Ministry of Investment and the GAMI revealed signing 11 partnership agreements with private companies.
Notable partners include Airbus, Lockheed Martin, Leonardo from Italy, IBM from the US for information technology, and Türkiye’s Rocketsan for weapons manufacturing.
These agreements aim to fulfill strategic objectives for Saudi Arabia’s military industries, such as localizing defense manufacturing, enhancing military readiness, boosting industrial participation, and creating promising investment opportunities.
They also support the goals of the Kingdom’s national transformation plan, “Vision 2030,” aiming to localize 50% of military expenditure by 2030 and increase investment contributions to the gross domestic product.
Under the oversight of Saudi Investment Minister Engineer Khalid Al-Falih and GAMI Governor Engineer Ahmed Al-Ohali, a set of agreements were signed.
These agreements cover important areas like boosting technology transfer, setting up local production lines, and training local talent in the defense sector.
GAMI highlighted that the focus of the exhibition is on showcasing the latest advancements across various defense sectors like land, sea, air, space, and security.
These agreements align with GAMI’s strategy to develop investment in the sector by supporting local content and expanding opportunities for skilled national workers.
The aim is to strengthen Saudi Arabia’s defense capabilities and establish the kingdom as a regional and global hub for defense industries.
On his part, Al-Ohali emphasized that these agreements result from ongoing efforts to develop and localize the military industries, enhancing their competitiveness and workforce confidence.
According to the governor, partnerships with the Saudi Investment Ministry and collaborating companies will contribute to strengthening Saudi Arabia’s military industrial capabilities, promoting strategic independence, and optimizing expenditure efficiency.
Moreover, US weapon maker Lockheed Martin has signed agreements for Saudi Arabian companies to manufacture parts of its Terminal High Altitude Area Defense (THAAD) system.
A statement by Lockheed Martin revealed that these sub-contracts will enhance manufacturing capabilities in Saudi Arabia and transfer expertise to strengthen the country’s defense industry.
The main terms of the THAAD defense system procurement contracts stipulate the localization of work in Saudi Arabia, in line with the priorities of Vision 2030 to develop and localize its military industries.
Saudi Arabia is poised to take advantage of these strategies through qualitative international defense partnerships with Lockheed Martin and other major companies, which are manufacturers of innovative equipment that brings mutual benefits to all the parties involved.
Additionally, state-owned Saudi Arabian Military Industries (SAMI) signed a preliminary agreement with Qatar’s Barzan Holdings.
Barzan explained that the initial agreement with SAMI focuses on joint investment and development.
The deal aims to explore shared interests in defense industries, with both sides committed to boosting their collaboration in the future, sources told Asharq Al-Awsat.
Also at the World Defense Show, Airbus restated its commitment to boosting local skills and expertise in Saudi Arabia and the wider region.
Mikail Houari, President of Airbus in Africa and the Middle East, emphasized that their engagement goes beyond just selling products.
They aim to provide guidance, training, and support, contributing to job creation and sustainable economic growth in the area.
The Korean Aerospace Industries (KAI) plans to expand its presence in the Middle East and Africa.
KAI’s CEO stressed the importance of participating in exhibitions like the World Defense Show to boost the company’s business in these regions.

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Business

Precious Metals Fall again, Asian Stocks Swing as Traders Wind Down

Gold and silver prices have fallen from record highs this week. DAVID GRAY / AFP/File
Gold and silver prices have fallen from record highs this week. DAVID GRAY / AFP/File
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Precious Metals Fall again, Asian Stocks Swing as Traders Wind Down

Gold and silver prices have fallen from record highs this week. DAVID GRAY / AFP/File
Gold and silver prices have fallen from record highs this week. DAVID GRAY / AFP/File

Precious metals extended losses Tuesday on profit-taking after hitting recent records, while equities fluctuated in quiet trade as investors wound down ahead of the New Year break.

Traders were taking it easy in the last few days of 2025 following a stellar 12 months that have seen tech firms push several stock markets to all-time highs, while bitcoin, gold and silver have also enjoyed multiple peaks, said AFP.

Minutes from the Federal Reserve's most recent policy meeting -- at which it cut interest rates a third straight time -- are due to be released later in the day and will be scanned for an idea about whether a fourth can be expected in January.

The US central bank's monetary easing in the back end of this year has been a key driver of the markets' rally, compounding a surge in the tech sector on the back of the vast amounts of cash pumped into all things AI.

It has also helped offset recent worries about a possible tech bubble and warnings that traders might not see a return on their investments in artificial intelligence for some time.

Still, Asian markets have enjoyed a healthy year, with Seoul's Kospi piling on more than 75 percent and Tokyo's Nikkei 225 more than 25 percent -- both having hit records earlier in the year.

Still, both edged down Tuesday, with Shanghai, Sydney and Taipei also lower. Hong Kong, Singapore, Wellington and Jakarta rose.

The mixed performance followed losses for all three main indexes on Wall Street.

The big moves of late have been seen in precious metals, with gold hitting a record just shy of $4,550. Silver, meanwhile, topped out at $84 after soaring around 150 percent this year.

Investors have been piling into the commodities on bets for more US rate cuts, a weaker dollar and geopolitical tensions.

Silver has also been boosted by increased central bank purchases and supply concerns.

However, both metals have pulled back sharply this week on profit-taking, with gold now around $4,340 and silver at $73.50.

Oil dipped, having jumped more than two percent Monday when investors rowed back bets on peace talks to end Russia's war with Ukraine as a meeting between US President Donald Trump and Ukrainian counterpart Volodymyr Zelensky ended with little progress.

That surge followed Friday's similar-sized rally on optimism for a breakthrough to end the nearly four-year conflict.

An end to the war could see sanctions on Russian oil removed, which would see a huge fresh supply hit the market.

Bitcoin, which has tumbled since spiking above $126,000 in October, was stabilizing just below $90,000 after a shaky end to the year.

Business

Quality of Life Program Center Launches 'Smart Cities' Report

The Quality of Life Program Center has launched its new report on "Smart Cities". (SPA)
The Quality of Life Program Center has launched its new report on "Smart Cities". (SPA)
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Quality of Life Program Center Launches 'Smart Cities' Report

The Quality of Life Program Center has launched its new report on "Smart Cities". (SPA)
The Quality of Life Program Center has launched its new report on "Smart Cities". (SPA)

The Quality of Life Program Center has launched its new report on "Smart Cities," highlighting key global trends in the development of smart cities and their role in improving quality of life and enhancing urban sustainability.

This launch aims to promote human-centered cities and advance smart urban development, in line with Saudi Vision 2030 objectives, the Saudi Press Agency reported on Tuesday.

The report notes that smart cities are among the most important pillars of modern urban development, as they rely on the use of advanced technologies, data analytics, and the Internet of Things to improve service efficiency, enhance quality of life, and address growing urban challenges such as traffic congestion, pollution, and resource management.

It also reviews several global indicators demonstrating the ability of smart solutions to reduce emergency response times, improve educational outcomes, increase residents' satisfaction with public services, and reduce energy consumption and carbon emissions through smart grids and advanced transportation systems.

The report emphasizes that adopting smart city concepts constitutes a fundamental pillar for achieving sustainable urban development, improving quality of life, and building more resilient and prosperous communities, thereby enhancing the competitiveness of Saudi cities at the regional and global levels.

Business

Saudi Arabia Turns Potato Farming Challenge into Export Opportunity

Saudi Arabia Turns Potato Farming Challenge into Export Opportunity
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Saudi Arabia Turns Potato Farming Challenge into Export Opportunity

Saudi Arabia Turns Potato Farming Challenge into Export Opportunity

In the deserts of Hail in northern Saudi Arabia, where rugged mountains border a climate that turns mild in summer and biting in winter, an unlikely agricultural success story has emerged.

From sandy soil that appears unforgiving at first glance, uniform potatoes are harvested to meet the exacting standards of local and international markets, supplying global food companies and contributing to the growth of a thriving export industry.

Grown not on traditional farmland but in a desert landscape long constrained by water and energy shortages, the crop has become a case study in how agricultural innovation and industrial sustainability can converge, positioning Saudi Arabia among the world's exporters of potatoes and processed potato products.

Potatoes in Hail are cultivated in sandy soil that gives the crop sufficient room to grow without deformities, setting it apart from harder soils that reduce quality and market acceptance. The main challenge, however, was not the soil but groundwater scarcity, making the search for innovative irrigation solutions a necessity rather than a choice.

That marked the start of a shift. Farmers have adopted drip irrigation systems powered by solar energy to reduce consumption and increase productivity, transforming Hail into a strategic production hub that contributes to self-sufficiency and exports to global markets.

According to previous remarks by Saudi Industry Minister Bandar Alkhorayef, the kingdom developed an irrigation model tailored to potatoes grown for potato chip manufacturing and export.

Alkhorayef said at the time that PepsiCo, which produces the well-known Lay’s brand, faced difficulties exporting potatoes grown in the kingdom. He stated that the government had collaborated with the Ministry of Agriculture to address the issue.

“They had a valid concern related to water scarcity, so we developed an appropriate irrigation model, which was approved by the agriculture ministry, resolving the export problem,” he said.

According to the Ministry of Environment, Water, and Agriculture, Saudi Arabia experienced a significant increase in potato production in 2023, with output rising by 47 percent to exceed 621,750 tonnes. The self-sufficiency rate reached 86.8 percent, according to the latest officially announced figures.

Hamoud Al Saleh, founder and chairman of Lahaa Agricultural Production, one of the Saudi suppliers to PepsiCo, said the kingdom had exported potatoes to Russia for six consecutive years, in addition to other countries including Norway, Lebanon, Syria and Jordan, while also supplying local factories.

Challenges

Some European markets still face hurdles in importing Saudi potatoes due to the absence of trade protocols, while Norway has proven more flexible, continuing imports over recent years, Al Saleh said.

He said groundwater remains the biggest challenge for farmers. Speaking to Asharq Al Awsat, Al Saleh said PepsiCo supported the company in implementing drip irrigation, covering part of the cost for three years and providing experts to help design and approve the system, which significantly increased productivity.

He said yields per hectare rose to between 50 and 60 tonnes in some fields, alongside a notable reduction in water consumption. He added that Saudi potatoes show high resilience to environmental conditions.

Energy has also been a challenge, with agricultural equipment relying heavily on diesel. This has prompted many farmers to adopt solar power, thereby easing operating costs for both farmers and the state.

Al Saleh unveiled a new project costing 15 million riyals, approximately $4 million, spanning 700 hectares and utilizing a combination of diesel and solar energy, describing it as a long-term investment aimed at enhancing sustainability and reducing consumption.

Resource efficiency

PepsiCo said resource efficiency has become a central pillar of its regional strategy. Ahmed El Sheikh, president and general manager for the Middle East, North Africa and Pakistan, said the company had adopted advanced drip irrigation systems in cooperation with specialized firms and the agriculture and industry ministries.

He said this helped cut water use by around 30 percent compared to traditional irrigation, alongside a shift toward solar energy instead of diesel, which reduced fuel and energy consumption.

Regarding exports, El Sheikh stated that most products are shipped to Gulf states and Jordan, with efforts underway to explore exports to Syria from plants within the kingdom.

In terms of investments linked to Vision 2030, he stated that the company has invested 300 million riyals, approximately $80 million, in new production lines targeting both local and export markets.

He stated that local content reached 95 percent for certain packaging materials that were previously imported, while locally sourced potatoes also achieved 95 percent, with ongoing efforts to reach 100 percent.

Local content refers to the share of raw materials, manufactured inputs, or extracted resources produced inside Saudi Arabia, whether agricultural, industrial, or packaging-related.

Regarding workforce localization, El Sheikh stated that some plants, including the Dammam factory, have achieved Saudization rates of 80 percent, with the appointment of the first Saudi female plant manager.

In research and development, the company stated that it has established an R&D center with investments exceeding 30 million riyals, approximately $8 million, thereby localizing operations within the kingdom instead of relying on overseas centers.

El Sheikh said the company has reached full operational capacity in working with farmers on potato crops, calling it a major achievement that it hopes to replicate with other crops in the future.

Water scarcity by the numbers

This agricultural experience comes amid mounting challenges to water resources. The National Water Strategy says Saudi Arabia has a limited stock of exploitable non-renewable groundwater, with low recharge rates not exceeding 2.8 billion cubic meters annually.

Total water demand is estimated at approximately 24.8 billion cubic meters, with an annual growth rate of around 7 percent.

The strategy states that agriculture is the largest consumer of water in the kingdom, accounting for approximately 84 percent of total demand, and relies heavily on non-renewable resources that make up nearly 90 percent of agricultural water use.

Agriculture ministry data show irrigation efficiency does not exceed 50 percent, compared with more than 75 percent under global best practices. Fodder cultivation alone consumes about 67 percent of agricultural water, according to the latest available figures.

Government role

This shift in potato farming would not have been completed without government support. The kingdom developed and approved an irrigation model suited to potatoes grown for chips and export as the preferred method, prompting PepsiCo to expand its factories in the Eastern Province with investments exceeding 300 million riyals.

This helped make Saudi Arabia the world’s second-largest hub for potato chip manufacturing, according to previous remarks by the industry minister.

Beyond exports, the model strengthens self-sufficiency. Under this approach, Saudi potatoes have become more than just an ingredient in chips, turning into a symbol of integration between agriculture and industry and evidence of the kingdom’s ability to transform environmental challenges into global economic and investment opportunities, in line with the ambitions of Vision 2030.