South African defense firm Denel is building a munitions factory in Saudi Arabia to produce artillery (60mm, 81mm and 120mm mortar and 105mm and 155mm howitzer) shells and aircraft bombs (of up to 909 kg/2,000 pounds). The new plant, financed by the Saudis and jointly run by them and Denel can produce up to 300 artillery and 600 mortar shells a day. Apparently most of the ammo is for the Saudi military although some may be exported.
The Saudis are following the example of the neighboring UAE ((United Arab Emirates). Since the 1990s the UAE has invested heavily in defense manufacturers inside the UAE and the Middle East. One of these firms is Adcom Systems United which has been around since the 1980s and produces a wide range of military equipment. It does this by licensing a lot of technology and forming partnerships with high-tech firms in the West. Adcom has been working on UAVs since 2003 and has delivered several models for both military, police and commercial use.
The UAE has been encouraging local companies to develop weapons for use by local forces and export markets. So far this has resulted in UAE firms manufacturing military trucks, guided missiles, and small arms. Despite this since 2008 UAE has become the third largest importer of weapons in the world and the largest in the Middle East. The other two big spenders worldwide are India and China. In the Middle East the UAE imports 50 percent more weapons than Israel.
The UAE is a confederation of small Arab states at the southern end of the Persian Gulf. With a population of only 5.5 million, and large oil and gas deposits, the emirates have a per-capita income of $43,000. Thus the UAE has a lot to defend and an increasingly belligerent neighbor just across the Gulf. The UAE controls one side entrance to the Gulf (the Straits of Hormuz). Iran is on the other end, and both nations dispute ownership of some islands in the middle.