10 Israeli defense companies will take part in the Paris Air Show scheduled to open tomorrow in Le Bourget, France. They will display their wares to armies, police forces, and security agencies.
The Israeli companies participating in the exhibition include Aeronautics, now in the midst of its IPO; Rafael Advanced Defense Systems Ltd.; Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1), Ashot Ashkelon Industries Ltd. (TASE: ASHO), Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), Beit Shemesh Engines, Controp, and BlueBird Aero Systems.
Some of the companies have announced that they will unveil new developments during the exhibition, together with more familiar systems. Some of these are being used by the IDF and the defense authorities in Israel, including the Iron Dome and David's Sling missile and rocket interception systems, a defense system for civilian airliners against shoulder-fired missiles, loitering munitions, unmanned aerial vehicles (UAVs), cyber systems and electronic warfare, etc.
Israeli defense exports to Europe totaled $1.8 billion in 2016, out of Israel's total of $6.5 billion in defense exports.
Ministry of Defense International Defense Cooperation Authority (SIBAT) head Brigadier General (res.) Michel Ben-Baruch said in advance of the air show's opening, "Europe is an important market for Israeli defense exports, and we are working to increase them." He added, "European countries are facing difficult security challenges, including murderous terrorist attacks, border defense, illegal immigration, and undermining of personal security. Israeli defense industries definitely have a great deal to offer against all of these threats.
The terrorism raising its head in European cities and the waves of refugees washing over the continent are not the only factors creating an opportunity for Israeli companies to sell weapons and defense systems for defending borders all over the continent. A defense source told "Globes" that the UK's exit from the European Union was also likely to provide an opportunity to grab a substantial market share. It will not happen overnight, but the exhibition is certainly an opportunity to start the process. The source said that the termination of the mutual obligations between the UK and European countries is likely to be translated into future defense deals and cooperation.
"There will be less dependence between the EU and the UK, and Israel can profit from the new situation. Last year, we saw the connection between the UK and Israel become deeper, as well as the connection between other European countries and Israel. This is happening between governments, and also between the companies themselves. European countries are increasing their defense budgets, so that Israeli companies have something to sell to them."
The Israeli companies are realizing the potential for expanding their business in Europe. Unusually, and in contrast to the other Israeli companies taking part in the air salon, IAI will not display products and developments this year. Nevertheless, a delegation of dozens of senior executives and division and plan managers will hold many business meetings over the coming week with representatives of countries from all over the world.
At the same time, IAI is expected to announce during the exhibition the opening of a new branch in Berlin, signaling closer ties between the company and the German authorities. "It will be our forward position in Germany, and in all of Europe," IAI executive VP marketing Eli Alfassi said.
The opening of a branch in Berlin is taking place with IAI's huge deal for leasing UAVs to the German air force, amounting to hundreds of millions of euros, following a prolonged legal battle that ended in recent weeks. The German Supreme Court dismissed a petition by US company General Atomics asserting that the German Ministry of Defense had preferred IAI's bid, even though the US bid was allegedly more attractive. Following the court ruling, the German parliament is expected to approve the deal with IAI at the end of the month.
"The existing dialogue between Israeli companies and defense conglomerates all over Europe is become warmer," says SIBAT European and North American Division director Amira Ilany. "Most of the dialogue is partnerships in plans involving missile systems, border defense, and smart cities. Last month, such contacts took place between Israeli companies and companies from Finland and the Czech Republic, and it was clear that defense spending in Europe is increasing. We are maintaining the pace of activity by Israeli companies in the market, and always take care to develop more such connections for the future."
Published by Globes [online], Israel Business News - www.globes-online.com - on June 18, 2017
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