The surge in arms sales by Israel’s top three defense companies, one of the world’s top 10 defense exporters, comes amid a broad arms embargo against Israel, including from some of its allies. Other countries have also suspended acquisition of Israeli weapons over the Gaza war.
The success of Israeli air defense technology, such as the Iron Dome and Arrow systems, or tank defense systems in more than 15 months of war, has attracted foreign buyers who have seen how Israeli weapons have been tested on the battlefield. is attracting. .
Last month, the Slovak Ministry of Defense signed a 560 million euro (equivalent to $579.1 million) contract to acquire Israel Aerospace Industries’ Barak MX integrated air defense system. “It is very important that the selling country has experience in leveraging the capabilities it offers us,” the ministry said in a statement to the Wall Street Journal. “Israel’s extensive experience in the field of air defense leaves no room for doubt. No,” he said. It added that the system was offered at a “competitive price”.
According to the Israeli Ministry of Defense, Israel’s top defense companies Elbit Systems, Rafael Advanced Defense Systems and Israel Aerospace Industries account for about 70% of the country’s foreign defense exports. Representatives of these companies say they are on track to achieve record sales in both international and domestic markets.
Together, the three companies saw their total backlog, or orders to be fulfilled reflecting increased sales, increase by more than 25% month-on-month to amount to $63 billion in the first three quarters of 2024. did. A year ago. The backlog for all of 2023 increased by 23% year over year, which was a record at the time.
Escalating global conflicts, such as the war in Ukraine, have increased demand for weapons, causing major foreign suppliers in Europe and the United States to pull out because they can’t produce weapons fast enough.
That means many countries are increasingly relying on Israel for much-needed defense supplies, said Peter Wezeman, a senior researcher at the Stockholm International Peace Research Institute who tracks global arms sales. said.
“In many cases, European countries that are critical of Israel are still very keen on acquiring Israeli arms,” he said.
The biggest challenge for Israel’s defense industry now is to keep up with growing external demand while continuing to supply much-needed wartime weapons to the country’s armed forces.
Israeli manufacturers are already at full capacity and need to prioritize their own needs over those of foreign customers.
Boaz Levi, CEO of Israel Aerospace Industries, said the company was recruiting at the start of the war and added extra shifts to its production lines to meet demand, sometimes 24 hours a day, year-round. It is said that it sometimes operates non-stop. This includes Saturdays, which are traditionally required holidays due to the Jewish Sabbath.
“Due to increased demand in Israel and around the world, we had to work much more than before,” Levy said.
Ron Tomer, president of the Israel Manufacturers Association, said Israel needs to hire at least 6,000 more workers in the defense industry to meet future demand.
Tomer believes these goals are achievable as more high-tech workers begin to migrate to the defense industry. This emigration is the result of a decline in overseas high-tech funding and a global downturn in high-tech investment since the war began. As defense companies’ sales increase, salaries become more competitive, attracting new talent. Some private manufacturers are also shifting their focus to defense technology. For example, companies that once made medical devices are now working on radar, Tomer said.
Israel has come under global condemnation over the Gaza war, and the decision by some allies to withhold weapons has led the country to focus on strengthening its domestic defense production capabilities.
Israel’s Ministry of Defense announced on Tuesday that it had signed a contract worth $275 million with domestic arms manufacturer Elbit to build a new facility to produce heavy bombs and raw materials needed for defense.
This is part of a growing recognition within Israel that it needs to take a more aggressive military posture than it did before October. 7 A strategy to seek peace through deterrence. On Monday, an Israeli government committee chaired by a former Israeli national security adviser recommended an additional $30 billion increase in military spending over the next 10 years to prepare for Israel’s future security challenges. did.
Analysts say meeting the deadline will be critical for Israel because of its value proposition of being able to deliver the system faster than competitors.
Tom Karako, director of the Missile Defense Project at the Center for Strategy and Strategy, said Israel is not selling the most complex system, but a fully functional system with the shortest delivery time, so its air defense system He said that they are producing faster. International Studies, a US think tank.
“They are very clear on the fact that they are focused on capacity, schedule and sufficient content just because of the number of contracts they have received over the years,” he said. Said.
Elad Klaus, head of research at Maytab Brokerage, said Israel’s air defense system market is expected to expand as the country begins using a laser-powered system called Iron Beam.
Laser air defense has become something of a holy grail for the military, as typical air defense interceptors can cost anywhere from hundreds of thousands of dollars to millions of dollars each. The cost of the laser system is expected to be in the order of a few dollars per intercept.
The US military deployed laser air defense systems to the Middle East last year.
“Every country would want such a product. If there is a need, purchasing it should be a top priority for the defense minister,” Kraus said.
Contact Dov Lieber at dov.lieber@wsj.com.
