German carmaker Volkswagen AG (XETRA: VOW) is tightening business relations with Israeli suppliers. The company has appointed Angie Handelsmann as its new Israel procurements manager to foster ties with current suppliers and find new ones.
The appointment comes after Volkswagen signed an offset agreement with the Ministry of Industry, Trade and Labor's Industrial Cooperation Authority. Over the next six years, Volkswagen will buy components from 15 Israeli companies, including Israel Chemicals Ltd. (TASE: ICL), Iscar Ltd., Eltam Ein Hashofet Ltd. Foamotive Ltd., Palziv Ltd., Raval Ltd. (TASE: RVL), and Tadir-Gan (Precision Products) Ltd's (TASE: TDGN).
The agreement came after the Ministry of Finance's Government Motor Vehicles Administration signed a deal with Volkswagen for cars for civil servants and the IDF.
Volkswagen's sales in Israel total $12-15 million a year. The Ministry of Industry says that the carmaker has made €150 million in reciprocal contracts to date, including €20 million in 2010, under previous agreements.
Industrial Cooperation Authority director general Bina Bar-On said that the Volkswagen deal creates opportunities for Israeli manufacturers of components for the car industry. "We've created a catalogue of 150 Israeli manufacturers of components which can be used in the production lines of the world's motor vehicles industry. In the case of Volkswagen, the company has been scrupulously making reciprocal procurements for years, while selling products to government ministries. Agreements of this kind strengthen Israeli industry, impart extensive know-how, and make it possible to establish itself in horizontal markets."
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2011
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