ECONOMIC NEWS SURVEY
December 12, 1996
KOREANS SEEK ISRAELI PARTNERS FROM 150 COMPANIES
(By David Harris, "The Jerusalem Post" Dec. 9, 1996)
Eleven senior executives from the Korean-based Hanwha Corp., including
group vice-president Jae-Won Kim, are meeting with 150 company
representatives during their first visit to Israel this week.
Hanwha is looking for Israeli partners in biotechnology, pharmaceuticals,
communications, banking and venture capital, according to Industry and
Trade Ministry Center for Business Promotion head Noah Shani.
Established in 1952, Hanwha, Korea's seventh largest conglomerate with $14
billion annual turnover, comprises companies in the chemicals, explosives,
energy and machinery manufacturing sectors.
Company representatives already have met Industry and Trade Minister Natan
Sharansky, Communications Ministry director-general Shlomo Waxe and senior
staff at Koor Industries Ltd., Clal Israel Ltd., and Israel Aircraft
Industries Ltd.
Hanwha is a key partner of the Korean government in its communications
satellite program.
In September, a team from Korea's Halla Group visited Haifa to discuss the
possible purchase of civilian satellite technology. Of particular interest
to Seoul is Israel's first communications satellite, Amos I, which was
launched in May.
Two senior Foreign Ministry officials made a trip to Korea last week for
talks on further economic cooperation between the two countries. In the
first nine months of the year, trade volume between Israel and Korea
totalled $551 million, a figure both sides said they want to increase.
Foreign Ministry sources said recently they expect Korea to be the first
Asian country to invest on a large scale in Israel.
While much hope has been placed on possible investments from Japan, these
have not yet come to fruition, with the Japanese saying they are waiting
for regional stability.
The Koreans, it is argued, are less cautious and will act when they are
confident of a transaction's future profitability.
THE ISRAELI TECHNOLOGICAL MARKET
("Yediot Aharonot", Dec. 9, 1996)
1. According to the Annual Survey of the information industry and hi-tech
enterprises in Israel, carried out by the Israeli branch of the consultant
firm Meta Group, the value of this industry in 1996 totalled $1.96
billion.
2. Exports of computer programs during the year will reach $240-million.
3. By categories, the activities in this industry are:
computer-programming and services, $883; communications systems and
infrastructure programs, $860-million; overall (material) equipment,
$115-million; and maintainance, $105-million.
4. Compared with last year, the quantity of deals in scientific branches
grew in 1996 by 5 percent; while the growth rate last year was 15 percent
higher than that in 1994.
5. Complaints by computer and programming companies in Israel are that,
despite the drop in the growth rate compared to 1995, there is still
mention of the individual sector in Israel, which grew by very large rates
"definitely not usual in the economy." One source said the main
explanation for the above-mentioned drop in the growth rate results from
internal movements within businesses from products to services. The price
of computer programs is falling, while the demand for support services has
risen. The combination of program services and maintenance in these
branches and the high growth rate explain the slowdown in the growth rate.
JOINT ISRAELI-JORDANIAN PROGRAMMING PROJECTS
("Ma'ariv" Business Section, Dec. 3, 1996)
Joint projects between Jordan, Israel and the U.S. in computer programming
have recently been made known in the framework of the recent Cairo
Economic Conference. These will be the first fruits of the "Triad" joint
investment fund of the three countries, set up some five months ago. The
fund is defined as a trial initiative designed to encourage cooperation in
developing and marketing hi-tech products. The confirmation of two
projects was announced yesterday, the first of their kind: investment in
both will be about $600,000 from the $1-million allocated to the trial
initiative plan.
The purpose of the Triad Fund is to advance industrial cooperation between
companies in the private sector in Israel, the U.S. and Jordan. The first
confirmed project will deal with developing programs to feed computers and
a computerized archive for documents in Arabic. It is a joint venture by
the Israeli "Shonot" concern and the Technology Group of Jordan, and the
American programming company Care. The second authorized project is for
developing learning material for technological education of Arabic
speakers and is a joint venture of the Ediosoft Co. of Israel, the
Computer and Communication Systems of Jordan, and the Learning Labs
concern in the U.S.
The Triad Fund is based on the model of the binational Israeli-U.S. Beard
Fund used as an "industrial marriage broker" and provides 50 percent of
the R & D expenditures of new hi-tech products. The fund has been
appointed to manage the trial stage of the Triad Fund.
ISRAEL WILL RAISE $200 MILLION IN 1997 JAPAN'S BOND MARKET
("Ha'aretz", Dec. 9, 1996)
The Finance Ministry has initiated steps to issue bonds of the Israel
Government in the Japanese market, according to the Accountant-General,
Shai Talmon. He said the Ministry had hired the services of a well-known
legal firm in Tokyo to deal with the business aspects of Israel operating
in the Japanese securities market. The intention is to issue the bonds in
1997, and the next issue abroad, under the guarantee of the Israel
government, will apparently be in the Japanese market.
At the end of last week, the State completed offering securities to the
tune of $200-million in the Euro-Bonds market in London. The securities
were sold for five years at interest higher by half of 1 percent than that
paid on U.S. government bonds.
A year ago, the government issued securities worth $250-million in the
American market; it is intended to raise a similar sum of between
$200-million to $250-million in the planned Samurai Stock Exchange offer
in Tokyo.
The ministry's director-general David Brodet and the accountant-general
Talmon visited Japan last week to meet with institutional investors, to
advance the Euro-Bonds share offer; one-third of that offer was bought up
by investors in Asia, mostly in Japan.
"We now have points of reference in the American and Euro-Bonds markets
and want to test the Samurai market," Talmon said. The State will seek
promoters in Japan before the expected launch. The account-general said a
program is now under way to raise foreign exchange for Israel in 1997.
Most of this will be done abroad, both in 1997 and 1998, and will be under
the sponsorship of the U.S. loan guarantee program; Israel has yet to to
raise a sum of $2.7-billion under these guarantees.