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Leading Sectors for U.S. Export and Investment

Commercial Sectors

  • Travel & Tourism
  • Medical Equipment
  • Automotive Aftermarket Parts & Equipment
  • Intelligent Transportation Systems
  • Educational Services
  • Telecommunications
  • Electronic Components
  • Electricity
  • Homeland Security


Agricultural Sectors

Travel & Tourism

Overview

The Israel outbound travel market accounted for over 3.6 million departures by Israelis by air during 2012. The U.S. market share was only 8.5% with 309,000 departures. This market offers a considerable room for growth. To attract more Israeli travelers to the United States, U.S. destinations and travel service providers should engage in dedicated marketing and promotion of their products to local consumers. Israeli travelers to the United States spend an estimated $1.5 billion per year on travel-related services, not including airfare. The average expense per traveler per day in the United States is $250 including lodging, meals and shopping. The average length of stay is 12 days.

According to recent survey by the U.S. Department of Commerce, the majority of Israelis who travel to the United States are visiting family (44%). Business travelers account for 25%. Leisure, recreation and holiday travelers account for 25%. Conference attendees account for a small fraction of all arrivals from Israel. The most popular activity participation while in the Unites States are shopping and dining, followed by art gallery/museum, sightseeing in cities, visit historical places and amusement and theme parks. Only 20% of Israeli visitors to the United States stated they are interested in touring the countryside, visit national parks or nightclubs. At least 65% of Israeli travelers to the United States plan their trip weeks in advance. At least 50% of travelers still rely on a travel agency as a primary source of information for their trip planning.

El Al Airlines, United Airlines, U.S. Airways and Delta Airlines operate 10 daily, direct flights from Tel Aviv to New York, Philadelphia and Los Angeles. Most European airlines offer competitive prices and routes to the U.S. via Europe. Over 500 travel agents and about 20 wholesale tour operators work in the Israeli outbound travel market. Operators and airlines advertise special packages and seasonal deals on a daily basis. The high seasons for travel occur around the July-August summer vacation and the High Jewish holidays in September, October and April. Tour operators specialize in market segments rather than in specific destinations, and most operators are conservative in selecting new travel products.

Best Prospects/Services

The most popular activity participation while in the Unites States are shopping and dining. Israelis are also attracted to specialty accommodations such as boutique hotels and bed & breakfast in exotic sceneries. Wine tours that include specialized culinary experience, topped by outlet shopping would make a highlight of any trip.

Opportunities

Boutique hotels, culinary tours, outlet shopping, music festivals and family travel destinations may find opportunities in Israel, especially by offering new travel products and a high level of services. For promotion and market information please contact Commercial Specialist Yael Torres: email: yael.torres@trade.gov;

Web Resources

U.S. Dept. of Commerce Office of Travel & Tourism Industries; Israel Central Bureau of Statistics; Israel Ministry of Tourism

Healthcare Technologies

Overview

Israel is a lucrative market for advanced healthcare technologies. In 2011 Israeli distributors imported medical and pharmaceutical products in the amount of $2.2 billion. The U.S. share was only 14.5% at $318 million. Germany and other EU countries are the major competitors of total sales, however, U.S. products outranked the EU competition in medical imaging equipment (37% of total imports), in medical instruments (29% of total imports) and in clinical diagnostics (28% of total imports). Characterized by a technologically advanced market economy, Israel has a public healthcare system that ensures a universal healthcare coverage to its entire population via four health management organizations and a network of hospitals and doctors.

Israeli doctors and healthcare facilities are modern and quickly adopt to new, cost effective technologies and procedures. Many Israeli doctors received training in the United States and maintain personal and professional relationships with colleagues at major U.S. medical centers. In addition, easy market-entry conditions and receptiveness to buy U.S. technologies and services make Israel an ideal destination for U.S. healthcare exports.

U.S. medical device companies interested in exporting medical equipment to Israel need to appoint a local distributor, agent or other legal representative to register their products with the Israel Ministry of Health (MOH). The device registration should be accompanied by one of the following documents: 510(k), Pre-Market Approval (PMA) or an Investigational Device Exemption (IDE). Implantable medical devices require mandatory labeling in the patient’s file for tracking and surveillance purposes. Market access is fairly clear for U.S. FDA and CE Mark-approved medical products.

Sub-Sector Best Prospects

A growing awareness for preventive medicine during 2011 opened the market to advanced diagnostic procedures. This shift includes public campaigns for early detection of breast and colon cancer and inclusion of standard, age-based diagnostic procedures in the universal healthcare reimbursement list. Imports of diagnostic products to Israel increased by 15% between 2010-2011 (Table 1). Israel’s elderly population is growing and life expectancy is high among OECD countries. Therefore, demand for hospital beds, nursing aids and homecare products remains high. Wound care continues to be a high priority in preventive care. In addition, a well-developed private sector health care in the areas of dental, eye laser surgery and plastic/aesthetic surgery keep up the demand for advanced medical instruments and appliances.

Additional best sales prospects exist for U.S. manufacturers of FDA-approved, innovative technologies in many medical fields, including smart implants, medical imaging and minimally invasive image guided technologies, preventive medical treatments, cardiology equipment, equipment and supplies for plastic surgery, dental instruments, equipment and technologies for pain management, physiotherapy, ozone & oxygen therapy, OR equipment, point of care diagnostic kits and wound management technologies.

Table 1 Imports of Medical Equipment and Pharmaceutical Products to Israel, 2010-2011

Tariff Code

Description

Total imports in 2010

Imports from the U.S. & U.S. market share of total imports

Total imports in 2011

Imports from the U.S. &

U.S. market share of total imports in 2011

Major Competition

9018

Medical Instruments

$334 M

$108 M (32%)

$365 M

$107 M (29%)

Germany (16.5%)

9021

Orthopedic Appliances including implants

$127 M

$ 21 M (16.5%)

$158M

$21 M (13%)

Germany (23%)

9022

Imaging Equipment: Medical, Surgical and Dental

$129 M

$41 M (32%)

$151.5 M

$ 56.5 M (37%)

Japan (15%)

Germany (11%)

3003-3004

Medicaments

$1.2 B

$75 M (6%)

$1.35 B

$ 91 M (7%)

Switzerland (26%)

Germany (11%)

The U.K. (10%)

3005

Wadding, gauze, bandages and similar articles

$19.5 M

$3.9 M (20%)

$23 M

$4 M (19%)

China (33%)

3006

Pharmaceutical goods

$36 M

$6.9 M (19%)

$41 M

$6.3 M (15%)

Ireland (17%)

3822

Diagnostic or Laboratory Reagents

$103 M

$22 M (21%)

$115 M

$32.3 M (28%)

Germany (35%)

GRAND TOTAL

 

$1.9 B

$277.8 M (14%)

2.2 B

$318 M (14.5%)

 


Source: Israel Central Bureau of Statistics, Foreign Trade Data

Opportunities

The U.S. Commercial Service at the U.S. Embassy in Israel helps American exporters enter the market through partner search and trade promotion programs. For additional information, please contact Commercial Specialist Yael Torres: email: yael.torres@trade.gov;

Educational Services

Overview

At the end of the 2011/12 academic year, 257,365 Israeli students attended accredited universities and colleges. The growth rate has slowed down to less than 4% annually in the last decade, compared to 8% a year in the 1990s, when higher education became more accessible to the general public. There are 65 institutions of higher learning in Israel. Of the 257,365 students registered in state and public colleges, 194,020 (75.4%) were at the undergraduate level. Post-graduate students taking masters’ degrees numbered 52,730 (20.5%) of the student body. PhD students numbered 10,615 (4.1%) of the student body. The total excludes the 46,100 students studying at the Open University. The Council for Higher Education accredits all new institutions and programs and authorizes them to award academic degrees. The growing number of students entering private colleges has changed the landscape of the Israeli higher education system. The growth in the student population has led to the establishment of new colleges to meet the demand of qualified students. These colleges are accredited and must offer the same standard of education provided by state universities. Undergraduate students are entering these institutions in ever-increasing numbers (19.3% of all undergraduate students in 2011/12), thereby allowing the eight public universities to focus more on graduate and research level studies. Today, institutions of higher education in Israel number 8 universities, 8 regional colleges associated with universities, 23 other regional colleges, 22 teacher training colleges, 12 institutions that offer a diploma recognized by the Ministry of Education, 11 art schools, and 59 technological colleges and 1 Open University. In 2012, revenues of the top 20 local universities and community colleges exceeded $2 billion. Around thirty foreign universities run local campuses in Israel.

Best Prospects/Services

Courses of Study

Israeli students typically apply for law, psychology, medicine, and veterinary medicine, engineering-and fields that are not offered as BAs in Israel such as hotel administration, advertising, art and therapy. Short-term or non-degree study includes fields such as English language, culinary arts, sound engineering, jazz or acting, architecture and institutions offering sports scholarships. Popular majors include: business administration, law, clinical psychology, industrial/organizational psychology, culinary arts, film, music, video editing, advertising, East Asian studies, international relations, computer sciences, engineering, architecture, social work, mass communications, pre-med, and life sciences. Increasingly popular is ecology, environmental sciences, make-up artistry, image consulting, drug and substance abuse counseling, and various expressive therapies.

Exchange Programs and Cooperative Agreements

In recent years there has been a growing trend by US schools to sign cooperative agreements with selected Israeli universities and colleges in an effort to attract graduate and post doctoral students to their institutions and to work on collaborative research and development projects in areas of common interest.

Energy Sector Workforce Requirements for Israel

Israel’s offshore natural gas reserves are estimated around 30 trillion cubic feet, however the nation has little formal or vocational education programs to rapidly and efficiently develop this resource. This creates an opportunity for educators to train these individuals. Universities offering degree programs focused on hydrocarbon development at both the undergraduate and graduate level, can capitalize on this opportunity.

Opportunities

Today, attention in Israel has turned to secondary study and relevant accreditation, be it degree, diploma or certificate. Israelis are looking to broaden their horizons both professionally and personally and are investigating opportunities to study overseas. According to the Graduate Management Admission Council (GMAC), 2447 Israeli students took the GMAT in the academic year 2011-2012, more than double from 10 years ago. Even more impressively, Israel has the second highest number of GMAT takers per capita of any country in the world, and provides the seventh largest number of takers of any country in the world, ahead of France and Germany. Best prospects for U.S. educational institutions are to offer a degree integrated with practical work experience. According to 2012 statistics, a total of 25,000 Israelis requested information and showed interest in study programs in the States. In 2011/12 there were 2,490 Israeli students studying in the United States. (Breakdown: 760 under-graduate, 1,322 graduate and 140 non-degree, 268 OPT).

If you are interested in tapping into this market, you are welcome to participate in the annual recruiting fair organized by CS Israel. For additional information, please contact Commercial Specialist Alan Wielunski: email:alan.wielunski@trade.gov; Phone: +972-3-519-7390

Resources

Central Bureau of Statistics , Council for Higher Education

Automotive Aftermarket Parts & Equipment - Israel

Overview

The Israeli automotive industry is solely dependent on European and Asian imports having no manufacturing base of its own. Industry sources predicted that from 2011, the number of motor vehicle deliveries would average 240,000 units per annum, but this did not materialize. In 2012 only 204,939 units were delivered, a decrease of 9% over 2011. Of the 2.6 million cars on Israeli roads, U.S. market share has remained flat at 3.7%, but U.S. manufacturers are making serious inroads in the market place with the introduction of smaller more fuel efficient vehicles such as the Ford Focus. The balance of vehicle imports come from Europe (45.9%) and Asia (50.4%) - Japan 39.1% and South Korea 11.3%.The top four brands in Israel are Hyundai, Ford, Toyota and KIA. The average age of vehicles is 6.9 years and rate of motorization 342.4 vehicles per. 1,000 residents.

In April 2013, the GOI (Government of Israel) approved the Ministry of Transportation’s proposal, which is based on the Zelekha Committee recommendations from 2012. The bill sets out regulations governing the operation of parallel importers that are unassociated with the vehicle manufacturers, and the sale and trade of used vehicle parts. The new bill also allows personal importers the possibility of importing up to 20 vehicles a year including vehicles that have already been registered overseas, and temporary regulations (until 2015) which allows a business or individual to import two vehicles a year for business or personal use.

Despite the Ministry of Transportation’s efforts to reduce costs, the cost of car ownership has been steadily rising in Israel. It increased by an average of 0.5% every year between 1999 and 2009, and now averages NIS 1,458 ($394) a month. Part of the reason costs are so high, are the high taxes on vehicles and gasoline, and the high cost of replacement parts and repairs. Despite OECD directives, taxes on new cars in Israel are among the highest in the world (83%) and soon-to-be 18% VAT, which industry sources blame as the main factor preventing the car market from reaching its full potential. In 2011, the GOI introduced tax incentives on imports of electric vehicles and hybrids in order to help reduce carbon emission gases, but in a move to raise declining state revenues, the Ministry of Finance has "raised the bar" on discounts allowed for more fuel-efficient 'green cars', meaning cars that previously qualified will no longer qualify under the new regulations, further raising the price of cars.

Total imports of aftermarket products reached $445 million in 2012. The bulk of these imports came from Germany, Japan and Asia. Imports from the U.S are estimated at $25 million annually.

Access to the Israeli market by US exporters is best achieved through any of the 600–700 importers of aftermarket products. There are about 45 firms that produce and supply original equipment for global car manufacturers (GM, BMW) and subcontractors, and a further 20 that are involved in design and design development, measuring and diagnostic systems, and cutting and engraving that are used by the car industry.

Best Prospects/Services

  • Car security and anti-theft devices: anti-theft electronic systems, locking devices,
  • Car body: bumpers, radiator grills, hood and trunk lids, wings, front and rear lamps (i.e. the parts most vulnerable in car accidents).
  • Service parts: disc brake pads, shock absorbers, front suspension parts, filters for oil and lubrication, air conditioning parts,
  • Replacement service parts: tires, fan belts, water hoses, water pumps, brake components, engine and transmission components, electrical components, undercarriage items that need replacing at the end of the warranty period.
  • Vehicle accessories: car care products, polish, wax, upholstery spray
  • Water-coolants (Glycol) for radiators
  • Electronic accessories: TV screens for the rear seats, GPS systems, sound systems etc.
  • Universal lubricants: well-known brand names of high-grade oils, lubricating, glycol, wax. The market demands well-known brand names.

Opportunities

Israeli importers are always on the lookout for quality products at competitive prices – usually in that order. For additional information, please contact Commercial Specialist Alan Wielunski: email:alan.wielunski@trade.gov; Phone: +972-3-519-7390.

Resources

Central Bureau of Statistics; Industry Sources; Israel Vehicle Importers Association; Federation of Israeli Chamber of Commerce

Intelligent Transportation Systems

Overview

Intelligent Transportation Systems (ITS) is a broad-based term that describes a wide range of communication and computing technologies used to improve various transportation systems. Innovation in ITS is moving Israel towards an all-encompassing computer coordinated transportation system that will improve every source of transportation, from trains to roads, buses and even bike paths. Not only do these improvements make transportation more convenient and efficient, but also allow increased safety. Improvements in traffic management, driver assistance technologies, navigation aids, freight management dispatch systems, information for multi-modal transport users, rescue systems and environmental management provide users with significant reductions in total costs and travel time and increased safety.

In 2010, Israel adopted the US standard for ITS architecture which is expected to take 10 years to fully implement across all transit authorities operating in the country.

Total planned transportation infrastructure spending in Israel is planned to reach $16 billion in the medium term (2008-2015). Highway spending alone could reach approximately $6.4 billion over the next five years. In 2011-12, the Israel National Roads Company (INRC) will embark on the development, implementation and operation of a national traffic management system as part of its comprehensive traffic management program in order to proactively manage the road network, optimize existing capacity, reduce congestion, enhance safety and improve air quality. ITS spending by the Israel National Roads Company (INRC) may reach as high as $40 million.

Best Prospects/Services

Roughly 40% of the ITS budget is allocated to procuring hardware components such as; cameras, electronic signage and detectors. This product group alone is expected to reach $18.6 million in the next five years.

Opportunities

U.S. manufacturers of ITS products and services are encouraged to take advantage of the opportunities in the Israeli market. For additional information, please contact Commercial Specialist Alan Wielunski: email:alan.wielunski@trade.gov; Phone: +972-3-519-7390.

Resources

Israel National Roads Company; Ministry of Transport

Telecommunications

Overview

In 2012, the telecommunications sector in Israel had revenues of over US$ 6 billion,

representing about 4% of the GDP. Israel has the most competitive and dynamic telecommunications market with one of the highest mobile penetration rates in the world and one of the highest household broadband penetration rates. Growth in the market will rely on a combination of new services and networks rather than increasing number of subscribers. Over the next four years, the majority of growth in the Israeli telecom market will arise from fixed and mobile broadband, VoIP, and pay-TV. "As the ability to offer multiplay services becomes more important in the Israeli market, operators look for mergers or partnerships that will allow them to expand their product ranges. Looking forward, the market is expected to grow as a result of demand for data and data-related services. This trend will be driven by an increase in competitiveness in both the fixed and mobile segments following a number of government reforms, including LLU and the introduction of a number of new MNOs and MVNOs.

Over the next five years, the majority of growth in the Israeli telecom market will arise from fixed and mobile broadband, VoIP, and pay-TV. "As the ability to offer multiplay services becomes more important in the Israeli market, operators look for mergers or partnerships that will allow them to expand their product ranges. Differentiation through discounted bundles and value-added services becomes vital. With 85 percent of households having fixed broadband access and the proliferation of 3G networks by all mobile players, the market is ripe with opportunities for convergence and multiplay offers

ramid_Research_IL

Best Products/Services

Israel’s very high broadband penetration rate provides great potential for triple play and digital media technologies. Another area of development is the Fixed Mobile Convergence (FMC) market. A market survey conducted by BBDO Consulting shows that over 65% of fixed and mobile operators will have implemented FMC services into their products over the next three years. There are a number of Israeli companies offering FMC solutions allowing for dual-mode handset service.

In the fixed broadband market healthy infrastructure competition exists between DSL and cable. Bezeq announced in early 2013 it was brining fibre closer to customers, moving beyond Fibre-to-the-Curb (FttC) towards Fibre-to-the-Home (FttH). HOT has already implemented DOCSIS 3.0 technology to offer speeds of up to 100Mb/s. A proposal to introduce a new FttH fibre operator backed by the incumbent power utility, Israel Electric Corporation (IEC), is underway although the government has struggled to find willing investors.

The majority of Israeli households subscribes to cable or satellite TV, provided by HOT and YES TV respectively. Free-to-Air (FTA) programming is also available via a Digital terrestrial TV (DTTV) network. The Ministry of Communications is keen to break up the HOT/YES duopoly by introducing IPTV-based competition, with estimates that competition could reduce tariffs by over 60%.

Israel’s mobile communications market is served by five mobile network operators in a saturated market. Previous competition led the mobile network operators to engage in a round of merger and acquisition activity with fixed line players to offer integrated services. The established mobile network operators are building on these past developments by planning to diversify into the pay TV market as a revenue growth opportunity. Another growth opportunity is mobile broadband, with 3G/HSPA networks launched.

Competition in the mobile and internet markets has received a welcome boost following the licensing of two new 3G mobile network operators and a host of mobile virtual network operators. The existing players were cutting prices and unveiling 'unlimited call' schemes ahead of the May 2012 launches of HOT Mobile and Golan Telecom and this is reflected in lower ARPUs. While this move benefits consumers, operators' margins are under pressure and - in order to contain costs – operators such as Partner have begun laying off staff and streamlining their operations. Partner was itself put up for sale in 2012, but Hutchison Whampoa ultimately decided not to complete the deal based on Partner's current valuations. Regulatory moves to cut interconnection and roaming rates will further weigh on operators and consolidation remains a distinct possibility.

The five cellular operators in Israel who provide digital technology countrywide coverage and modern 3G (third generation) services. Pelephone, the oldest operator, has rolled out a UMTS network. The second operator, Cellcom, still operates the American IS- 136 TDMA technology as a legacy second-generation network, but uses European DCS 1800 and UMTS for third generation services. Orange (Partner Communications), the third operator, uses GSM technology DCS 1800 and UMTS. Two new operators entered the market in 2010: Hot mobile, which uses third-generation UMTS technology alongside a legacy iDen network acquired along with small operator Mirs Communications, while Golan Telecom uses UMTS technology exclusively. Both Golan Telecom and HOT mobile have concluded national roaming agreements which allow for nationwide coverage while they build their networks.

The mobile market continues to search for new and innovative applications such as value added services for its customers. Israel is a highly urbanized, technologically-literate society. Israelis are used to having world-leading technology in many fields, and mobile phones are no exception.

Opportunities

Growth in the market will rely on a combination of new services and networks rather than increasing number of subscribers. Over the next four years, the majority of growth in the Israeli telecom market will arise from fixed and mobile broadband, VoIP, and pay-TV.

The established mobile network operators are building on these past developments by planning to diversify into the pay TV market as a revenue growth opportunity. Another growth opportunity is mobile broadband, with 3G/HSPA networks launched. The Ministry of Communications and a number of mobile network operators are keen to break the current pay TV duopoly by launching IPTV-based services

The government of Israel seeks the establishment of a privately held third communication infrastructure company. On Jan. 2013 Minister of Finance Yuval Steinitz signed the permit for Israel Electric Corporation (IEC) (TASE: ELEC.B22) to engage in telecommunications and provide 1-Gbps Internet access speed. The permit, which will come into effect when Minister of Energy and Water Resources Uzi Landau also signs it, is the final step in the government's plan to establish a nationwide fiber optic network with unprecedented access and quality. Deployment of the fiber optic network is scheduled to begin in late 2013, when the ministries finish their work and the tender process is completed.

Also, the Ministry of Communications reached an agreement with the Ministry of Defense to vacate frequencies which mobile carriers will use for 4G networks. The mobile carriers will need to have 4G frequencies, as their networks are overloaded. Industry sources believe that within a year, some networks are liable to stop functioning because of the demand for mobile Internet.

Despite the agreement, 2013 is shaping up as another lost year for 4G in Israel, because of the time needed to prepare the tender and complete the discussions between the companies and the Ministry of Communications on the frequencies' allocation.

For additional information, please contact Commercial Specialist Sigal Mendelovich: email: sigal.mendelovich@trade.gov; Phone: +972-3-519-7491.

Resources

Ministry of Communication

Israel Association of Electronics & Software Industries

Electronic Components (ELC)

Overview

 

2009

2010

2011

2012 (-3%)

Est.

Total Market Size

656 (-21%)

997

1,1

1,0

Total Local Production

1,081

1,513

1,664

1,605

Total Exports

1,033

1,446

1,590

1534

Total Imports

608

930

1.0

965

Imports from the U.S.

169

250

275

265

Units: Millions of U.S. dollars. Source: www.technologies.co.il

Israel’s electronic components industry, valued at more than $1 billion, has been slightly affected by the global economic slowdown and estimated to decrease by approximately 3% in 2012. This market segment represents 14.7% of the Electronics & Information industry. Most components are imported, integrated into various types of systems or subsystems and generally exported. Israeli companies purchase electronic components from Europe (44%), the U.S.(44%) and Asia (22%). In 2012, imports from the U.S. alone reached more than $260 million. Companies outsource their purchasing activities using subcontractors for supplying them with the components they need.

Israel’s leading sectors remain the defense and medical industry, which showed stability even in difficult times. Sectors that are showing a healthy recovery are the solar energy and safety & security market. There is an increased demand for passive components and RF.

Israel is a major importer of electronic components. Total imports totaled $970 million, with nearly 30% coming from the U.S. Although the U.S. remains one of Israel’s main components suppliers, Asian companies are proving tough competitors. Numerous multinational corporations have also taken advantage of Israel’s technical expertise by establishing R&D facilities and manufacturing plants in the country. These include Applied Materials, General Electric, HP, IBM, Intel, Microsoft, National Semiconductor, Jabil and Vishay.

There are three key points that influence competition in the Israeli electronic components market:

§Product’s technical features - Demand for the most updated innovative technologies components is very high. Israeli companies always look for components that can enhance their products’ technical features.

§Technical support - Providing technical support is very important for the Israeli customer. Bad technical support assistance has negative influence on recurring purchasing decisions.

§Price - When quality is not an issue, Israeli companies prefer to purchase cheap components from Asian countries. That is the case of mass production. Prices of electronic components imported from the U.S. are more expensive and therefore local companies tend to purchase American components when they need to produce reliable systems for defense, safety and security systems.

Best Prospects/Services

As a developed technology market, Israel is always looking for innovative technologies and components to enhance product technical features. Developments in the Israeli telecom, defense and homeland security markets have had a positive effect on the increased demand for electronic components. Israel’s purchasing nature is based on two main factors, price and technical support.

Opportunities

Israel offers opportunities for U.S. exporters of active components, RF & microwave, power amplifiers and semiconductors. There are a large number of Israeli companies that represent U.S. firms in this sector, always looking for new-to-market U.S. companies with good service and competitive prices that they can represent. For additional information, please contact Commercial Specialist Sigal Mendelovich: email: sigal.mendelovich@trade.gov; Phone: +972-3-519-7491.

Web Resources

Israel Association of Electronics & Software Industries

Technologies Group

Electricity

Overview

Israel Electric Corporation (IEC)

IEC is Israel’s state-owned electricity utility company.  The company owns, maintains and operates 17 power stations sites, including 5 sites for steam driven power stations, and the national transmission and distribution systems.  At the end of 2012, Israel’s installed capacity was 13,750 MW of which IEC owned 13,250 MW, and private producers approximately 500 MW. IEC’s $14m 5-year investment plan for 2013-2017 will require significant procurements for upgrades and maintenance of its generation, transmission & transformation and distribution systems. The company plans to build an additional coal fire power station “project D” in Ashkelon in 2018-19. As a state-owned company, IEC is included in Israel's WTO/GPA agreement requiring it to use public tender procedures. While some projects are tendered out in open tender procedures, in most cases, a selective tendering process requires potential suppliers to pre-qualify to be included in IEC's approved suppliers' list.

Independent Power Producers (IPP) 


The Electricity Law provides the framework for the increase of IPPs from less than 0.5% to 20% of Israel’s installed generating capacity.  With the ongoing construction of the natural gas transmission and distribution networks, many major industries have been connected or will soon be connected to the gas supply. The Public Utility Authority for Electricity, has granted dozens of conditional generation licenses for stand-alone and combined cycle IPP’s to produce over 4,000 MW. Several stand-alone IPP’s are due to come on-line in the near future: the 140-megawatt OPC combined cycle power station in Rotem, the 840 MW Dorad plant near Ashkelon and the 880 MW Dalia Power Energies IPP at Tzafit.  The large number of projects in various planning stages offers good opportunities for U.S. manufacturers, in particular of cogeneration equipment. 

Renewable Energy

In 2009, the Israeli government determined a target for renewables to reach 10% of the country’s generating capacity by 2020 and the local industry, in particular the solar sector started to grow at a fast pace, focusing mainly on small and medium-size prospects.  However, by 2013, renewables have reached just over 200 MW, accounting for less than one percent of Israel’s electricity production. According to in Ernst & Young's most recent index rankings, Israel ranks 17th in solar energy attractiveness and 37th in overall renewable energy attractiveness, behind Chile and the UAE.

Israel has numerous technology firms developing renewable energy technologies. Many of these companies are active outside of Israel. There is room for cooperation and joint R&D. The BIRD Foundation provides a good platform for joint U.S.-Israel commercial R&D in renewable energy. The bi-annual Eilat Renewable Energy conference and exhibition offers an opportunity for U.S. renewable energy companies to present their technologies and network with Israeli companies and government officials.

Natural Gas Pipelines

The state owned Israel Natural Gas Lines company (INGL) has just awarded the last leg of the national pipeline transmission infrastructure to Italian company ENI. Last month, INGL awarded two franchises for the construction and operation of regional distribution networks. With extensive investment in pipeline construction, there are opportunities for U.S. equipment suppliers and engineering consultants.

Best Prospects/Services

Electrical Power Generation, Transmission and Distribution Equipment; Pipeline Equipment and Consulting Services

Opportunities

Israel Electric Corporation is operating under an emergency plan, making substantial investments in expansion and improvements to its generation, transmission and distribution systems. To meet projected future electricity demand, Israel Electric is investing almost $3 billion annually.   Good opportunities exist also in the IPP sector.  The Public Utility Authority for Electricity, the regulatory body has, over the past few years, issued numerous licenses for IPPs including to Dorad and Dalia and for combined cycle plants at major industries and desalination plants.  Israel remains a good market for U.S. suppliers of equipment and services to the energy sector.  With a favorable dollar exchange rate, U.S. equipment suppliers enjoy a price advantage over EU-based manufacturers. Opportunities also exist for pipeline engineering services to the recently awarded franchisees.

For additional information, please contact Commercial Specialist Irit van der Veur: email: irit.vanderveur@trade.gov; Phone: +972-3-519-7540.

Web Resources

Israel Electric Corp.

Ministry of Energy and Water Resources

Israel Natural Gas Lines company

BIRD Foundation

Homeland Security

Overview

Israel is a well-developed and sophisticated market for homeland security equipment and services.  Israel’s security-awareness and high level of preparedness are the driving forces for the development of the country’s cutting edge security industry.  This is one of Israel’s high-growth export industries.  Israel has over 400 exporters of security technologies and services, including many integrators and service providers.  The homeland security industry's annual sales are estimated at $4 billion, with exports accounting for approximately $2.5 billion.  Imports are an estimated $600 million, with 55% U.S. market share.  HLS is closely related to Israel’s successful defense sector that continues to grow its annual exports, reaching $7 billion in 2012.

Sub-Sector Best Prospects

CCTV, X-ray systems and screening systems using alternative technologies, non-lethal weapons, sensors, biometric solutions

Opportunities

Israel is an attractive market for U.S. manufacturers of high-end equipment and of components that can be integrated into Israeli systems.  Israeli manufacturers are important end-users of imported security equipment and components that are integrated into locally produced for-export security systems.  In addition, many of the homeland security systems are sold to the Israel Ministry of Defense.  These procurements are often made with Foreign Military Funding (FMF) or Foreign Military Sales (FMS), giving an advantage to U.S. manufacturers. U.S. suppliers dominate the imports with a 55% market share.

The total imports of homeland security equipment and services are estimated at $600 million. Good opportunities exist for sophisticated equipment used in homeland security applications.  U.S. security equipment, which enjoys an excellent reputation in Israel due to its high reliability, is often used for sensitive applications, by high-security industries and for key infrastructures and installations.  The market offers good opportunities for U.S. exporters of high quality and sophisticated detection and screening systems, CCTV, sensors, biometric solutions, x-ray systems, non-lethal weapons, etc. U.S. exporters should take into account that their products may be re-exported. U.S. companies that want to participate in this sector should be knowledgeable of U.S. export control regulations.  

For additional information, please contact Commercial Specialist Irit van der Veur: email: irit.vanderveur@trade.gov; Phone: +972-3-519-7540.

Web Resources

Israeli Export and International Cooperation Institute

U.S. Department of Commerce Export Control Regulations

U.S. Department of State Export Control Regulations