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.