IAI’s Growth Engines Revving Up with Indian Partners

India has always marked cutting edge technologies as its main goal. India has unique, operational needs and we are committed to harness our best minds and technologies towards achieving the challenges set by India.

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Joseph Weiss, President & CEO, IAI
Joseph Weiss, President & CEO, IAI

As Israel’s largest aerospace and defense enterprise, Israel Aerospace Industries (IAI) is positioned as a leading player in the global defense, security, and commercial aerospace market. “The fusion between our military and commercial activities is one of the things that sets us apart from the competition, and I believe that the balance between these two fields will become more efficient in the future”. Joseph Weiss, President and CEO of IAI told Defense-Update.

“The Israeli market provides an excellent testing ground for the complex, cutting edge applications IAI develops” Weiss said. “Our customers and partners know that these operational solutions, developed for our own forces are critical for our national security; many of them are combat proven by the IDF. This gives us a clear advantage.” IAI unveiled its latest special mission maritime patrol aircraft (MPA) based on Bombardier Global 5000 just before Aero-India 2015. “Our new business-jet based MPA, in concert with UAS and shore-based systems will provide unmatched maritime domain superiority.”

In 5-6 years 20% of IAI sales will come from land-and maritime-related activities

“We are investing significant resources in research and development, particularly in areas we see as the company’s future growth engines. We place a strong emphasis on unmanned aerial systems, missile defense systems and intelligence systems as well as cyber security, robotics, and air-defense.” According to Weiss, IAI is constantly expanding its infrastructure and modes of operation to match the growing competition in global markets, strengthening its position in non-aerospace markets. In 5-6 years IAI expects to establish land-and maritime-related activities and represent around 20 percent of the company’s total sales.
In recent years the Asia-Pacific Aerospace & Defense market has experienced a period of strong growth. On the backdrop of declining defense budgets in Europe and North America, Asia-Pacific is becoming the world’s largest growth market for aerospace and defense systems.

As Israel’s largest defense exporter, IAI has been growing its business in Asia and particularly in India and is expected to continue expanding its activities here. Among the systems recently transferred or currently underway to India are Barak 8 that was co-developed with India, as part of the LRSAM naval air defense and MRSAM land-based air defense systems; the PHALCON Airborne Early Warning aircraft is now operational, as a large numbers of Heron unmanned aircraft systems and various types of radars.

IAI considers some of these local activities as ‘growth engines’ for the future, in particular, the unmanned systems, special mission aircraft and air defense. In addition, IAI is ready and prepared for broad industrial collaborations and cooperation in response to new Indian requirements. “I believe that partnering with defense companies abroad is a good way to maximize business potential, to enter new markets and to increase our operations in existing ones.” Weiss stated.

IAI already has various collaborations with different partners and organizations in India, mainly, in the air-defense and radar systems. The company is acting to expand its collaborations with government and private owned companies in India. Just before Aero India 2015 IAI and Alpha Design Technologies have signed a teaming agreement for the local production of IAI’s mini-UAVs in India. The purpose of this JV is to better position IAI’s mini-UAVs to potential customers in India, including security agencies, coast guards, defense organizations and border security forces.

“Technology transfer allows IAI to get acquainted and team up with new foreign companies”

“Mergers and acquisitions are important to us because, in the current climate, countries want to retain work in their domestic market, and therefore we should be able to function locally in the target market. IAI also sees offset as an enabler for success in international markets. Not only are offset obligations expected to reduce arms acquisition costs, they are also expected to stimulate economic development and employment within purchasing countries” Weiss said.

Technology transfer has also been an issue with previous Indian procurement deals. According to Weiss, IAI transfers technology within the boundaries of the appropriate licenses, as part of these offset programs. “Technology transfer allows IAI to get acquainted and team up with new foreign companies as partners on some occasions and as sub-contractors in others. Some of those new relationships grow into sustainable relationships independent of the original offset program”.

“The rules of operation in India are very clear, unique and organized, and place an emphasis on offset commitments. IAI respects these rules and operates by them. We do hope that some of the restrictions will be eased for the benefit of the entire industries and customers. “

“India’s technological and operational requirements are highly advanced. India has always marked cutting edge technologies as its main goal. In addition, India has unique, operational needs and we are committed to harness our best minds and technologies towards achieving the challenges set by India.” Weiss concluded.

IAI display at Aero India 2015 highlights the company's broad product line of UAVs, Radars and Missiles. Photo: Noam Eshel, Defense-Update.
IAI display at Aero India 2015 highlights the company’s broad product line of UAVs, Radars and Missiles. Photo: Noam Eshel, Defense-Update.