Israel eyes booming Asian aerospace mart
Israel eyes booming Asian aerospace mart
By Siti Rahil
SINGAPORE (Kyodo): Israel Aircraft Industries (IAI), Israel's largest aircraft manufacturer, is hoping to grab a bigger share of the booming Asian aerospace market, targeting in particular China and Moslem countries in the Middle East, as well as Indonesia and Malaysia.
Menashe Broder, IAI vice president for corporate marketing, who was in Singapore for the Asian Aerospace exhibition last week, projected that his company's exports to Asia this year will for the first time surpass its exports to the United States, which bought US$500 million worth of products from IAI last year.
Asia, which is now the world's fastest growing region in terms of air passenger traffic and defense spending, is an attractive market for IAI at a time when economic growth in Western countries is slowing and many are slashing their defense budgets.
The company is highly dependent on exports, which accounted for over 80 percent of the $1.5 billion worth of new contracts last year.
It aims to increase exports by expanding commercial production so that the ratio of commercial to defense products is about equal. Currently, putting aside the defense-based domestic market, 65 percent of IAI's market is for defense products and 35 percent for commercial.
In an interview with Kyodo News, Broder said the time has never been better for Israeli companies to enter the region, where it had been common for many countries to avoid trade with Israel for political reasons.
IAI is keen to cooperate with any country in the region, including Indonesia, in manufacturing commercial aircraft by supplying such high-tech components as landing systems and avionics as there is an enormous market in the region for IAI's range of executive jet aircraft, he said.
Eventually IAI aims to supply defense-based products such as signal and communication systems used for intelligence.
Broder believes the brighter prospect is due partly to the demise of the Soviet Union and the Warsaw Pact, which removed the ideological barrier that had hindered trade with Israel.
Other factors are the 1991 Gulf War, which somewhat shifted the Arab world's perception of threat away from Israel, and most recently the progress in the Middle East peace process.
He noted that Asia was almost a closed market to Israel for the past 15 to 20 years.
As a result of the "Arab boycott" whereby Arab countries, including the world's largest oil producers, threatened not to export oil to any country which has trade relations with Israel, even non-Moslem countries such as Japan, which had no hostility toward Israel, avoided trading.
But things have changed rapidly since the breakup of the Soviet Union and the Gulf War. Israel's recent signing of the peace agreements with the Palestinians and the peace treaty with Jordan have started to whittle away the remnants of the hostilities that the Arab and other Moslem countries have had toward Israel.
Taking the cue from Arab countries, the Malaysian government, for example, announced last month that it is reviewing its trade policy on Israel with a view to establishing trade ties with the country.