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Security – SNP ADVISORS

Security

Saudi Arabia, which enjoys strong security partnership with the United States, has by far the largest military expenditures (including military aircraft) among the GCC nations. Industry experts estimate that total Saudi defense expenses to reach $83.5 billion (SR313.13 billion) in 2016-2017. U.S. arms sales to Saudi Arabia, which including 84 new F-15SA fighters, 70 Apache helicopters, 36 Little Birds, and 72 Black Hawks, represents a considerable improvement in the Saudi offensive capabilities and will result in increased interoperability with U.S. forces.
Defense and security received $50.9 billion (SR191 billion), the second highest allocation in the SAG’s 2016 budget.  These funds are used to purchase equipment, weapons, ammunition, installations, and facilities to boost capabilities. The United States remained the top defense exporter in 2016, ahead of Russia, France, Britain and Germany.
Due to current threats and conflicts in the region and ongoing hostilities in Yemen, defense and security spending in Saudi Arabia has risen dramatically and is unlikely to slow in the near term. With the increase in military aircraft purchases comes an increase in demand for equipment maintenance, repair and overhaul (MRO) services, and training. The United States remained the top defense exporter in 2016, ahead of Russia, France, Britain and Germany.
Sustained low oil prices and the imposition of government-led economic transformation and austerity measures are having adverse impacts on some civilian and military projects. However, due to current threats and conflicts in the region and ongoing hostilities in Yemen, defense and security spending in Saudi Arabia has risen dramatically and is unlikely to slow in the near term.

Opportunities

Despite sustained low oil prices, Saudi Arabia still enjoys a strong economy. It has built advanced and strategic infrastructure that must be safeguarded, requiring sophisticated security systems. In addition to major downstream petroleum facilities and desalination plants, the Kingdom must secure eight major seaports, four international airports, and more than 25 domestic airports.
The security market in Saudi Arabia continues to develop rapidly. With the sustained slump in oil prices since 2015, the government has embarked on an economic reform agenda that includes privatization of government-owned and operated entities in various sectors. Thegovernment’s privatization plan is expected to entail security upgrades within the electricity,telecommunications, air-travel, water, oil and gas, railways and petrochemical sectors. The Kingdom is forecasted to procure $14 billion worth of security systems and services over thenext three years.

Sub-Sector Best Prospects

Some of the best prospects in the homeland safety and security market include:

  • Surveillance, detection, and communication equipment and systems;
  • Perimeter security and access control systems;
  • Security check point equipment (fences, crash barriers, cameras, access points);
  • Contraband detection systems, including scanning systems;
  • Consulting services in security planning and human resource development;
  • Cyber security software, services and equipment; Emergency response systems and equipment; and
  • Command and control equipment and systems.

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