The Iraq War and subsequent terrorist attacks has created business opportunities for Rafael and Israel Military Industries in the US.
Executives of both companies met US officers in scores of meetings at the Association of the US Army (AUSA) Annual Conference in Washington last weekend. The meetings indicate great interest by the US military in the two company's products. IMI and Rafael expect to increase their US sales in the coming years.
IMI president and CEO Dr. Ehud Ganani told "Globes", "We're focusing on programs for the US Army ground forces following the lessons from the second Gulf war."
Ganani said the US was one of IMI's key markets. In order to improve the penetration of its products in this market, "We decided appoint Major General (Ret.) Michael W. Davidson as IMI marketing director in the US."
Ganani said the company's cluster bomb with a self-destruct mechanism was the focus of greatest interest in the US. The self-destruct mechanism is activated seconds after the bomb "senses" that it has missed its target.
IMI currently produces 60 million cluster bombs with self-destruct mechanisms, most of which are sold to European armies. IMI is offering the munitions to the US through a joint venture with Alliant Techsystems (NYSE:ATK).
IMI is also offering the US 120 mm mortar cluster bombs, that explode over the target, dispersing 20 bomblets. The US Army is also interested in 105 mm tank shells.
IMI is also promoting in the US its airburst ammunition, fired from rifles with special scopes that enable the fuses to be activated at the optimal distance above the target in order to maximize damage. Ganani says this is the first ammunition of its kind.
Rafael USA president and CEO Yigal Ben-Hanan told "Globes" that following the invasion of Iraq and the subsequent guerilla attacks on US troops, US Army demand for Rafael protective armor has surged. He said Rafael expects tens of millions of dollars in orders for its protective armor in the coming years.
The US Army is also greatly interested in helicopter air cushions, similar to car airbags, designed to prevent injury to the crew in a crash. If the helicopter suddenly loses altitude, sensors activate the air cushions one meter above the ground to absorb most of the shock of the crash.
The US Navy suffers 20 deaths a year from helicopter crashes. The US Congress has authorized a $2 million budget in 2003 and $3.5 million in 2004 for Rafael to develop the air cushions. Congress is expected to approve $20 million for procurements from Rafael in the 2004 fiscal year. Ben-Hanan said Rafael would probably receive $15-20 million in additional orders for its products in 2004-05.
Published by Globes [online] - www.globes.co.il - on October 16, 2003