Israeli defense companies are tightening their belts. Some companies will reduce the size of their delegations and pavilions at the Paris Air Show at Le Bourget in mid-June compared with two years ago. Sources inform ''Globes'' that some companies, which sent delegations of scores of sales reps and executives to previous air shows to promote future deals, are sending smaller delegations in an effort to cut costs.
At the 2011 Paris Air Show, the Ministry of Defense's SIBAT Defense Export and Defense Cooperation and Israel Export and International Cooperation Institute had a joint 1,000-square meter pavilion, which cost NIS 6 million. This year's participation will be much more modest. "What we'll see in two weeks in Paris is not divorced from what's happening in the market: cost-cutting and streamlining wherever possible. With many countries cutting their procurement budgets, and no certainty about procurements of new weapons and platforms, everyone is tightening their belts, and this is seen at exhibitions. Even the world's biggest companies are planning to reduce their delegations to the air show," said a source at a defense company.
Other sources told "Globes" that the decision not to set up a big pavilion this year was because many of the largest companies decided to reduce their share in the set-up costs. The big companies will set up their own pavilions, including Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), which will have a two-floor pavilion; Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1), which bought a pavilion at the air show ten years ago; and Rafael Advanced Defense Systems Ltd.
One Israeli defense company which will not have a pavilion at the upcoming Paris Air Show is Yavne-based Aeronautics Ltd., which will only send a five-man delegation for business meetings. Aeronautics CEO Sammy Totach said that the crisis at the UAV, radar systems, and fuses manufacturer in the past year caused it to miss the deadline to order a pavilion. "Six months ago, we didn’t order space at the air show. When we tried to do so, three months ago, we were told that there was no room. We'll hold business meetings at the pavilions of other companies, and I hope that at the next air show, in two years, when the company will be in better shape, we'll have our own pavilion," he told "Globes" today.
The Export Institute says that 14 Israeli companies will participate in the Paris Air Show, the world's premier defense exhibition. In response to the decision not to set up an Israeli pavilion, it said, "The Export Institute is ready to hold activity at the Air Show with the relevant companies in line with their demands and needs. This year, in consultation with the companies, it was decided that setting up a pavilion in the usual format was not relevant, and we chose the alternative of displays on external sites. At the same time, as has been done in the past, some companies will display their wares at the national pavilion at one of the air show's main halls."
Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2013
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