Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) is putting its RAMTA shipyard up for sale, sources inform "Globes." The Beersheva plant, which has 350 employees, previously manufactured the Dvora and Super Dvora boats for patrols and routine security missions by the Israeli navy and other navies.
IAI, which has been restructured in recent years in an attempt to focus on its profitable activities, until recently considered closing down its shipbuilding business, in which it has engaged in since the mid-1960s, and which constitutes an employment anchor in Beersheva. In late November, "Globes" reported that IAI was considering closing down the ship factory, plus other unprofitable activities. This aroused uncertainly and concern among hundreds of the company's workers in the south.
As part of IAI's efforts to dispose of its shipping activity, senior company executives recently initiated contacts aimed at selling RAMTA to Israel Shipyards, controlled by businesspersons Samy Katsav and Shlomi Fogel. Israel Shipyard produces Shaldag patrol boats at its facilities in Haifa. Defense sources said that the acquisition of IAI's shipping plant would make Israel Shipyards the sole shipping manufacturer in Israel, thereby guaranteeing the company future contracts from the Ministry of Defense to supply vessels for the Israel navy. Some of the sources said that the talks between Israel Shipyards and IAI had not resulted in any actual negotiations or made any real progress.
This is not the first time that talks between Katsav and IAI in the framework of Katsav's efforts to expand Israel Shipyards' activity have failed to achieve results. "The general feeling is that Katsav wants to acquire the RAMTA plant, but not at any price," a source involved in the matter told "Globes." "RAMTA has no special technology that can upgrade Israel Shipyards' existing activity. At the same time, the land that it occupies in Beer Sheva is worth a lot of money."
Concern about unrest among the workers
The volume of work at RAMTA has fallen substantially in recent years, following the supplying of ships like the Super Dvora, the most advanced version of the veteran Dvora patrol boats. At the same time, no orders for more ships have been forthcoming since the new boats were supplied to the Israeli navy.
Ships made at RAMTA were previously sold to the navies of other countries around the world, such as Gambia, Sri Lanka, Portugal, and India.
As a result of the absence of orders and the decline in the volume of work at the company, IAI sent non-ship-related work to RAMTA, such as building parts and chasses for the company's G-280 executive jets, which are also used in other aircraft. Including this activity, RAMTA's 2018 sales totaled $35 million.
In view of the uncertainty about RAMTA's future, shipbuilding activity, and the efforts by IAI management to dispose of it, sources inform "Globes" that IAI commissioned an external company in the past year. This company recommended developing the company's activity in Beersheva, with a focus on robotics and land systems.
Among other things, this recommendation was based on the transfer of IDF units to the south and the consolidation of other large defense companies, including Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) and Rafael Advanced Defense Systems Ltd.. Elbit Systems completed its acquisition of IMI Systems Ltd. (IMI) from the state in recent months, and is scheduled to move the company's activity to Ramat Beka in the Negev in the coming years.
IAI sources said today that the company would carry out some of the recommendations concerning the development of its activity in Beersheva after closing or selling RAMTA, measures that will result in unrest among hundreds of its workers.
Commenting on IAI's plans for future production of ships at RAMTA, Beersheva Mayor Ruvik Danilovich told "Globes" that he planned to meet with the CEO of RAMTA next week. "I'm in direct contact with IAI chairperson Harel Locker, and he told me other things about the company's plans for development of the plant in Beersheva," Danilovich said.
Published by Globes, Israel business news - en.globes.co.il - on February 19, 2019
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