Saudi Arabia has signed an agreement with Hong Kong’s ASPACE allowing the company to operate in the kingdom’s aerospace sector.
The subsidiary of Hong Kong Aerospace Technology Group (HKATG) will be the first foreign company to do so in a pioneering initiative that will advance Saudi’s aerospace industry.
New investment era
In an endeavor to foster satellite development and manufacturing in the kingdom, ASPACE has committed an investment of $267 million. This partnership not only opens doors for ASPACE but also stands as a cornerstone for future investments in Saudi Arabia. Granting ASPACE the first investment license in the satellite field will reshape the country’s satellite industry and global competitiveness.
ASPACE’s CEO, Sun Fengquan, has outlined ambitious plans for the project. He emphasizes the ‘holistic development of making a satellite, including the launch of satellites, in Saudi Arabia’. This approach aligns with Saudi Arabia’s aim to grow its aerospace ambitions, with ASPACE at the forefront. The collaboration between ASPACE and the Saudi government is expected to play a crucial role in achieving this goal.
The agreement also carries significance for Hong Kong, which aims to showcase its potential as an aerospace hub. HKATG focused on satellite network engineering and precision satellite manufacturing. It aspires to play a key role in the global commercial satellite industry, valued at $281 billion.
ASPACE’s Advantage in Hong Kong
ASPACE’s choice of Hong Kong for satellite manufacturing is strategic. The cost of satellite production in Hong Kong is approximately 25 percent lower than in China due to zero industrial tariffs. This makes it a cost-effective location for ASPACE’s operations. As a separate territory of the World Trade Organization, it offers advantages with zero tariffs for imports and exports.
Saudi Arabia’s Vision for Aerospace
Saudi Arabia’s Vision 2030 centers on the development of a thriving aerospace industry. The country, in pursuit of this vision, has offered substantial incentives to ASPACE, including zero land costs and capital support. The partnership has garnered the attention of numerous investment banks, reflecting the growing interest and potential within the aerospace sector.
Therefore, this groundbreaking venture solidifies ASPACE’s presence in the global aerospace industry. Moreover, it paves the way for Saudi Arabia to achieve its aspirations in satellite manufacturing and development. Thus, this collaboration is expected to usher in a new era of innovation and growth for both parties involved.
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