(NSI News Source Info) RIO DE JANEIRO - April 17, 2009: Israeli Aerospace Industries (IAI) looked around the world for its future growth and signed up for Brazil and India, 
said Yair Shamir, chairman of the diversified aerospace and defense group.
That global strategy for growth was ratified by the IAI board, Shamir said April 16 at the Latin America Aerospace and Defense (LAAD) show.
To pursue the Brazilian market, IAI recently signed a 50/50 joint venture agreement with Synergy Group, an industrial and engineering group with large shipbuilding and aviation interests. IAI talked to a number of companies but opted for Synergy because it was looking for a partner that would allow diversification of activities.
The joint venture agreement was complicated and took some time to finalize. IAI settled on a joint venture rather than an outright acquisition, which was considered too risky.
IAI's approach will be "practical, not theoretical," Shamir said. The joint venture will seek out projects on which it can bid, applying the Israeli company's broad range of capabilities.
The president of Synergy, Germain Efromovich, said the agreement brings IAI technology into the joint venture company, which will bid for contracts with the Brazilian air force, army and navy.
Synergy submitted a bid in a tender that closed April 15 for four Brazilian coast guard cutters, Efromovich said.
Synergy owns two shipyards here, five commercial airlines including the Avianca carrier and a cargo operator, and an offshore helicopter fleet. The company is also involved in oil exploration and the medical field.
The Brazilian company plans to invest $800 million over three years in a new shipyard in the Rio state, Efromovich. Profit margins in the aircraft business are about 8 percent to 9 percent, shipbuilding up to 15 percent, and medical 20 percent to 25 percent, he said. Synergy had 2008 sales of $2.6 billion and expects to make $3 billion.
Each partner will initially inject a couple of hundred thousand dollars into the joint venture, but has capacity to put in hundreds of millions eventually.
The timing is right, Shamir said, as the Brazilian armed forces are pursuing a modernization.
Brazil is interested in assets such as UAVs, an early warning system and upgrades for its land, sea, air and, eventually, space capabilities, said Yair Ramati, IAI corporate vice president for marketing.
Some of the needs are a wish list, but IAI looks to the joint venture to win those deals which actually come to the market.
IAI is following Brazil's FX-2 combat aircraft tender, as the company has equipment, such as a radar targeting pod, electronically scanned radar, secure communications and electronic countermeasures, which could be fitted on the Saab Gripen aircraft if the Brazilian air force chooses it.
IAI makes the RF radar seeker for Rafael tactical missiles and builds laser guided bombs.
A win by Boeing's F/A-18 would secure business for American suppliers, while the Dassault Rafale is mainly equipped with Thales systems, leaving little room for IAI.
The Israeli company also has surveillance and communications satellites, which could feed into Brazil's space ambitions.
In India, IAI signed an agreement with the Tata conglomerate in the third quarter of last year.
said Yair Shamir, chairman of the diversified aerospace and defense group.
That global strategy for growth was ratified by the IAI board, Shamir said April 16 at the Latin America Aerospace and Defense (LAAD) show.
To pursue the Brazilian market, IAI recently signed a 50/50 joint venture agreement with Synergy Group, an industrial and engineering group with large shipbuilding and aviation interests. IAI talked to a number of companies but opted for Synergy because it was looking for a partner that would allow diversification of activities.
The joint venture agreement was complicated and took some time to finalize. IAI settled on a joint venture rather than an outright acquisition, which was considered too risky.
IAI's approach will be "practical, not theoretical," Shamir said. The joint venture will seek out projects on which it can bid, applying the Israeli company's broad range of capabilities.
The president of Synergy, Germain Efromovich, said the agreement brings IAI technology into the joint venture company, which will bid for contracts with the Brazilian air force, army and navy.
Synergy submitted a bid in a tender that closed April 15 for four Brazilian coast guard cutters, Efromovich said.
Synergy owns two shipyards here, five commercial airlines including the Avianca carrier and a cargo operator, and an offshore helicopter fleet. The company is also involved in oil exploration and the medical field.
The Brazilian company plans to invest $800 million over three years in a new shipyard in the Rio state, Efromovich. Profit margins in the aircraft business are about 8 percent to 9 percent, shipbuilding up to 15 percent, and medical 20 percent to 25 percent, he said. Synergy had 2008 sales of $2.6 billion and expects to make $3 billion.
Each partner will initially inject a couple of hundred thousand dollars into the joint venture, but has capacity to put in hundreds of millions eventually.
The timing is right, Shamir said, as the Brazilian armed forces are pursuing a modernization.
Brazil is interested in assets such as UAVs, an early warning system and upgrades for its land, sea, air and, eventually, space capabilities, said Yair Ramati, IAI corporate vice president for marketing.
Some of the needs are a wish list, but IAI looks to the joint venture to win those deals which actually come to the market.
IAI is following Brazil's FX-2 combat aircraft tender, as the company has equipment, such as a radar targeting pod, electronically scanned radar, secure communications and electronic countermeasures, which could be fitted on the Saab Gripen aircraft if the Brazilian air force chooses it.
IAI makes the RF radar seeker for Rafael tactical missiles and builds laser guided bombs.
A win by Boeing's F/A-18 would secure business for American suppliers, while the Dassault Rafale is mainly equipped with Thales systems, leaving little room for IAI.
The Israeli company also has surveillance and communications satellites, which could feed into Brazil's space ambitions.
In India, IAI signed an agreement with the Tata conglomerate in the third quarter of last year.
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