The Year of the Israeli Defense Industries
The Israeli defense industries are concluding the year 2016 and preparing for the new developments and technologies of 2017. A summary of the success stories, the challenges and the statistics of the past year – facing the future
Dan Arkin
| 19/01/2017
At Elbit Systems, they are working on the instruction system for the F-35 'Adir' fighter. At the same time, they are developing a sophisticated vision system for bicycle riders.
At IMI Systems they are developing a protective system for the tanks of the US Army.
At Rafael Advanced Defense Systems they are establishing Israel's national cyber technology HQ.
At IAI they are discussing NGPs – Next Generation Products.
Aeronautics offers the future integrated solution for security, surveillance and intelligence gathering – a combination of UAVs, multirotor platforms and aerostats.
Here is a glimpse to the year that was at the Israeli defense industries – and a sneak peek into the future developments the industries are currently working on.
Over the course of 2016, the Israeli defense industries developed cutting-edge technologies. It was a year of intensive sales of systems to IDF, along with expansion of the export markets and a quest for new markets overseas, with a serious inclination toward civilian markets (HLS – Homeland Security), development of integrated solutions based on combined systems, increased interest in cyber technology and development of systems for the naval field, which may have been neglected in the past to some extent.
In 2017, we can expect further development and acceleration of these trends, with seniority status and respect awarded to the true hero of present-day technologies – the sensor. The sensor is a miniature component of every system. Without it – no modern technology will be successful.
Israel Military Industries in their modern version, known as IMI Systems, currently have a backlog of orders amounting to 7.1 billion ILS, a sales turnover of two billion ILS in 2016 and 2,100 employees. IMI Systems made progress in the field of development and won contracts and tenders in several key fields: accurate artillery rockets, protection for armored vehicles, bombs and assault bridging solutions, and entered a new field of activity: protection against multirotor platforms.
Avinoam Tzafir, VP Marketing at IMI Systems: "We had a few major wins this year in a field of activity that is highly important for us, the field of accurate artillery rockets – missiles to ranges of 30 to 320 kilometers, with an accuracy of 10 meters. These are mega-projects on the scale of hundreds of millions of US dollars for clients in Israel and overseas.
"Another field of activity that gained considerable momentum this year is lightweight active protection systems for armored vehicles, the system designated Iron Fist Light Configuration (IF-LC). In the future, this system will protect the Bradley tanks of the US Army (through a joint venture with General Dynamics). Additionally, IMI won a contract with a country in Eastern Asia involving hybrid protection systems for armored vehicles."
The new Anti-Drone project by IMI Systems (protection against multirotor platforms) has generated a lot of interest as well as significant demand. The small arms ammunition plant – a longstanding activity of IMI – is operating intensively in Nazareth and supplies small arms ammunition to the US civilian market (among others), for hunting, firing ranges and sport shooting, with orders amounting to 250 million ILS.
In 2017, IMI intend to intensify and expand various activities. The field of accurate rockets will be shifted from the ground to the sea with the development of sea-to-sea rockets, as well as from the sea to the air: many air forces already use IMI's Mark-82 500 Lbs. urban warfare bombs. IMI developed a new super high explosive shell that is 5 times more effective than existing shells, yet inflicts limited collateral damage.
Another major field of activity at IMI is the field of assault bridge launching. IMI signed a long-term contract for the manufacture of 273 assault bridge launching systems for US Abrams tanks, and next year the development, manufacture and supply of these systems will continue.
Winged Systems
While IMI Systems focuses on mega-projects, Sharli Ben-Chetrit, EVP marketing at IAI, draws a somewhat different picture of 2016: "In the past we relied on mega-projects. Over the last few years, things have changed. There are fewer flashy mega-deals, owing to the budget cuts, and we focus on small and medium scale projects." IAI established a business intelligence center that concentrates and focuses the marketing and sales efforts that produce deals amounting to tens of millions of US dollars: "In 2016 we doubled the number of intermediate-scale deals compared to the past," says Ben-Chetrit, "and that was how we maintained our revenue."
At the same time, IAI are working hard on Next Generation Products (NGPs) and future developments, and this effort takes place throughout the Company's plants and divisions. One mega-project will continue, naturally – the supply of 811 pairs of wings for the F-35 stealth fighters to Lockheed Martin.
In 2016 IAI has focused on the field of cyber technology and this trend will be intensified in the coming year. "We have had some major breakthroughs this year, with highly substantial contracts in that field," says Ben-Chetrit. That includes contracts in Asia and Latin America, along with contracts in the field of robotics, ranging from large unmanned aerial vehicles to unmanned ground robots that help soldiers carry loads in the field, as well as a robotic platform for towing large passenger aircraft in airports (Taxibot). IAI is currently developing some of the world's most advanced products in the field of ground and sea robotics, like their Catana autonomous patrol boat "which is currently being negotiated with clients," as IAI's EVP has revealed.
Other examples of activities where IAI, whose primary line of business involves aerial systems, has entered new fields: Personal Rapid Transport (PRT) and the SkyTrain elevated transport system.
IAI has specialized in aircraft conversions and upgrades for many years. This year and next year, many aircraft will land at Ben-Gurion Airport in order to undergo conversion at IAI: conversion of passenger and combined (combi) aircraft into cargo aircraft. Sharli Ben-Chetrit explains that clients currently demand proven and mature systems that were already tested, operated and proven operationally – in the context of either military or civilian applications. Another activity in the civilian field for next year: an innovative solution for crowded airspaces – the CWS system designed to prevent collisions between military and civilian aircraft.
The results of the third quarter of 2016 at IAI have shown a sales turnover of US$ 893 million, a net loss of US$ 94 million (mainly owing to provisions for the expected retirement of 800 employees), a backlog of orders of US$ 8.2 billion and 15,000 employees. In 2016, IAI experienced one major drawback: the loss of the Amos-5 satellite. While the missile carrying the satellite was being refueled by the launching company Spacex, an explosion occurred and the satellite over which the employees of IAI had toiled for four years was destroyed.
Smart Vision
At Elbit Systems, the results of the third quarter of 2016 have shown a backlog of orders of US$ 6.8 billion, US$ 780 million in revenue and R&D expenditure of US$ 65.6 million. Like IAI, Elbit Systems also demonstrated a similar trend of efforts aimed at entering new fields of activity (including civilian fields). One example is their Safe City system, which collects data for a municipal area using sensors and cameras in order to provide information to police forces, traffic management centers, advance collection of information regarding scenarios, and mainly for alerts regarding emergency situations.
At Elbit Systems they regard Israel and the USA as their primary target markets. At the same time, their sales figures for Europe have increased while their sales in Asia and Brazil have decreased. In the civilian field, they developed head-mounted systems for civilian pilots (a spinoff from a major specialization of the company – flight helmets for fighter pilots, which now includes the joint project with Rockwell Collins involving the pilot helmet for the F-35 fighter). Another civilian activity – UAV flights for agricultural use in the USA.
Next year, Elbit Systems will continue to train the pilots of IAF through their simulators installed at the IAF Flying School and squadrons. They will continue to work on the development of a simulator system for cyber warfare scenarios. Elbit Systems is also involved in activities concerning protection for critical infrastructures and various cyber technology activities in the defense sector.
"The last year was a peak year as far as the maturation of new systems was concerned, among other things – as a result of the investments in R&D," says a senior Elbit Systems executive, "There are many examples: new Radar systems by Elisra, The GroundEye and Supervisor surveillance systems, the Spectro payload by El-Op, and, naturally – EverySight, the modern and highly innovative smart vision system for bicycle riders, which is currently undergoing the final trial stages. The bicycle rider will see actual data in front of his or her eyes. This is yet another spinoff from Elbit Systems' flagship product category – pilot helmets.
At the end of the year, Elbit Systems announced that their US subsidiary, Elbit Systems of America, won a contract for the manufacture of mortar systems for the US Army.
Loitering Munitions
Aeronautics (800 employees) focuses on the development, manufacture and marketing of unmanned aerial platforms and their range of products is marketed to IDF as well as to overseas clients (Aeronautics did not provide any details regarding their sales to IDF). About 1,000 UAVs by Aeronautics are in use around the world, most of them, quite naturally, in conflict areas. One of their most common products is the Orbiter UAV – a well-established platform which had been used operationally in Afghanistan and on many other battlefields and is currently serving 35 clients worldwide. "The Orbiter-4 UAV is currently in the final development stages and will fly very soon," says Aeronautics' VP Marketing, Danny Eshkhar. "It is a 50kg tactical platform with an endurance of 24 hours and a range of 150 kilometers."
At Aeronautics they are particularly proud of their latest developments in the emerging field of loitering munitions. "This year we completed the development of the K-1 loitering munition and signed the first deal with a foreign country," says Aeronautics' VP Marketing. "It is a 10kg platform fitted with a warhead, launched from a launcher or from the roof of a vehicle. It loiters for up to two and a half hours within a range of dozens of kilometers, and when ordered, it dives toward the target and crashes onto it. There is also an option of getting the loitering munition back to base. This platform is already operational."
Aeronautics provides numerous clients with a range of surveillance aerostats. Some of these aerostats have been deployed for a number of years around the Gaza Strip. Aeronautics' range includes small, medium and large aerostats. The smaller models are man-portable and operate at an altitude of 100 meters. The medium-size models rise to an altitude of 300 meters and the large ones to 600 meters. The aerostats carry surveillance cameras and various other sensors. Eshkhar explains: "In fact, the aerostat is a static UAV that does not consume fuel. It can monitor an area cell continuously (persistent area surveillance); it operates 24/7 and carries a surveillance camera, communication relaying capabilities and ElInt and ComInt sensors. The aerostat is tethered to a fixed point, it dominates a large area and is particularly suitable to such tasks as base and border security."
Next year, Aeronautics intends to place the emphasis on multirotor platforms: the company has acquired an Israeli multirotor company, and in 2017 they will continue working on the development of small, medium and large multirotor platforms, including multirotor platforms for fuel, water and ammunition resupplying. A large multirotor platform will be able to carry a load of 75 kg to a distance of 10 kilometers, in the context of military and civilian applications. Multiple-motor multirotor platforms are currently under development.
Eshkhar had this to say regarding the UAV-Multirotor-Aerostat trinity: "We are the primary contractor of the ideal solution – a system made up of aerostats, multirotor platforms and UAVs, providing a comprehensive solution of several platforms whose integration offers intelligence and information collection, surveillance and logistic support capabilities to warfighters or civilians."
The National Cyber Project
Giora Katz, VP Marketing at Rafael Advanced Defense Systems, concludes the last year as "A very good year as far as orders and sales were concerned. We progressed nicely in such leading product categories as missiles, electro-optics, remote control systems and unmanned weapon stations. In the field of active protection, IDF have recently concluded the future purchase of Trophy systems in large numbers. Last year we had nice activity in the fields of surveillance and cyber technology, and we continue to deliver Iron Dome and David's Sling systems in Israel and overseas. Rafael today is one major start-up."
Rafael had a backlog of orders of 20 billion ILS (2015 data), 7,000 employees and a sales turnover (2015) on the scale of 7.8 billion ILS. Their investment in R&D amounts to about 8% of their sales turnover and their net profit for 2015 was 459 million ILS.
Last year, Rafael intensified their activity in the Asian, Latin American, European and Australian markets, including the field of homeland security: "In the military field we are facing fierce competition, but we won a tender for the supply of unmanned weapon stations for the armored vehicles of the Lithuanian Army." According to Katz, Rafael is a global leader, offering operational systems in active air-defense and protection for armored vehicles on the move. "There are developments overseas with regard to the supply of Iron Dome and David's Sling systems," said Katz.
Additionally, Rafael developed the Drone Dome system, intended primarily to provide protection against multirotor platforms.
One primary activity that will keep Rafael busy in the next year involves the national cyber project (CERT), in which Rafael was selected to serve as primary contractor for the supply of cutting-edge security capabilities and protection for national computer infrastructures against cyberattacks. For this purpose, a group of companies was established that includes EMC, IBM, Cisco and Matrix, and charged with the development of solutions "that would provide Israel with advanced capabilities in the field of defense and security against cyberattacks."
The Israeli defense industries are concluding the year 2016 and preparing for the new developments and technologies of 2017. A summary of the success stories, the challenges and the statistics of the past year – facing the future
At Elbit Systems, they are working on the instruction system for the F-35 'Adir' fighter. At the same time, they are developing a sophisticated vision system for bicycle riders.
At IMI Systems they are developing a protective system for the tanks of the US Army.
At Rafael Advanced Defense Systems they are establishing Israel's national cyber technology HQ.
At IAI they are discussing NGPs – Next Generation Products.
Aeronautics offers the future integrated solution for security, surveillance and intelligence gathering – a combination of UAVs, multirotor platforms and aerostats.
Here is a glimpse to the year that was at the Israeli defense industries – and a sneak peek into the future developments the industries are currently working on.
Over the course of 2016, the Israeli defense industries developed cutting-edge technologies. It was a year of intensive sales of systems to IDF, along with expansion of the export markets and a quest for new markets overseas, with a serious inclination toward civilian markets (HLS – Homeland Security), development of integrated solutions based on combined systems, increased interest in cyber technology and development of systems for the naval field, which may have been neglected in the past to some extent.
In 2017, we can expect further development and acceleration of these trends, with seniority status and respect awarded to the true hero of present-day technologies – the sensor. The sensor is a miniature component of every system. Without it – no modern technology will be successful.
Israel Military Industries in their modern version, known as IMI Systems, currently have a backlog of orders amounting to 7.1 billion ILS, a sales turnover of two billion ILS in 2016 and 2,100 employees. IMI Systems made progress in the field of development and won contracts and tenders in several key fields: accurate artillery rockets, protection for armored vehicles, bombs and assault bridging solutions, and entered a new field of activity: protection against multirotor platforms.
Avinoam Tzafir, VP Marketing at IMI Systems: "We had a few major wins this year in a field of activity that is highly important for us, the field of accurate artillery rockets – missiles to ranges of 30 to 320 kilometers, with an accuracy of 10 meters. These are mega-projects on the scale of hundreds of millions of US dollars for clients in Israel and overseas.
"Another field of activity that gained considerable momentum this year is lightweight active protection systems for armored vehicles, the system designated Iron Fist Light Configuration (IF-LC). In the future, this system will protect the Bradley tanks of the US Army (through a joint venture with General Dynamics). Additionally, IMI won a contract with a country in Eastern Asia involving hybrid protection systems for armored vehicles."
The new Anti-Drone project by IMI Systems (protection against multirotor platforms) has generated a lot of interest as well as significant demand. The small arms ammunition plant – a longstanding activity of IMI – is operating intensively in Nazareth and supplies small arms ammunition to the US civilian market (among others), for hunting, firing ranges and sport shooting, with orders amounting to 250 million ILS.
In 2017, IMI intend to intensify and expand various activities. The field of accurate rockets will be shifted from the ground to the sea with the development of sea-to-sea rockets, as well as from the sea to the air: many air forces already use IMI's Mark-82 500 Lbs. urban warfare bombs. IMI developed a new super high explosive shell that is 5 times more effective than existing shells, yet inflicts limited collateral damage.
Another major field of activity at IMI is the field of assault bridge launching. IMI signed a long-term contract for the manufacture of 273 assault bridge launching systems for US Abrams tanks, and next year the development, manufacture and supply of these systems will continue.
Winged Systems
While IMI Systems focuses on mega-projects, Sharli Ben-Chetrit, EVP marketing at IAI, draws a somewhat different picture of 2016: "In the past we relied on mega-projects. Over the last few years, things have changed. There are fewer flashy mega-deals, owing to the budget cuts, and we focus on small and medium scale projects." IAI established a business intelligence center that concentrates and focuses the marketing and sales efforts that produce deals amounting to tens of millions of US dollars: "In 2016 we doubled the number of intermediate-scale deals compared to the past," says Ben-Chetrit, "and that was how we maintained our revenue."
At the same time, IAI are working hard on Next Generation Products (NGPs) and future developments, and this effort takes place throughout the Company's plants and divisions. One mega-project will continue, naturally – the supply of 811 pairs of wings for the F-35 stealth fighters to Lockheed Martin.
In 2016 IAI has focused on the field of cyber technology and this trend will be intensified in the coming year. "We have had some major breakthroughs this year, with highly substantial contracts in that field," says Ben-Chetrit. That includes contracts in Asia and Latin America, along with contracts in the field of robotics, ranging from large unmanned aerial vehicles to unmanned ground robots that help soldiers carry loads in the field, as well as a robotic platform for towing large passenger aircraft in airports (Taxibot). IAI is currently developing some of the world's most advanced products in the field of ground and sea robotics, like their Catana autonomous patrol boat "which is currently being negotiated with clients," as IAI's EVP has revealed.
Other examples of activities where IAI, whose primary line of business involves aerial systems, has entered new fields: Personal Rapid Transport (PRT) and the SkyTrain elevated transport system.
IAI has specialized in aircraft conversions and upgrades for many years. This year and next year, many aircraft will land at Ben-Gurion Airport in order to undergo conversion at IAI: conversion of passenger and combined (combi) aircraft into cargo aircraft. Sharli Ben-Chetrit explains that clients currently demand proven and mature systems that were already tested, operated and proven operationally – in the context of either military or civilian applications. Another activity in the civilian field for next year: an innovative solution for crowded airspaces – the CWS system designed to prevent collisions between military and civilian aircraft.
The results of the third quarter of 2016 at IAI have shown a sales turnover of US$ 893 million, a net loss of US$ 94 million (mainly owing to provisions for the expected retirement of 800 employees), a backlog of orders of US$ 8.2 billion and 15,000 employees. In 2016, IAI experienced one major drawback: the loss of the Amos-5 satellite. While the missile carrying the satellite was being refueled by the launching company Spacex, an explosion occurred and the satellite over which the employees of IAI had toiled for four years was destroyed.
Smart Vision
At Elbit Systems, the results of the third quarter of 2016 have shown a backlog of orders of US$ 6.8 billion, US$ 780 million in revenue and R&D expenditure of US$ 65.6 million. Like IAI, Elbit Systems also demonstrated a similar trend of efforts aimed at entering new fields of activity (including civilian fields). One example is their Safe City system, which collects data for a municipal area using sensors and cameras in order to provide information to police forces, traffic management centers, advance collection of information regarding scenarios, and mainly for alerts regarding emergency situations.
At Elbit Systems they regard Israel and the USA as their primary target markets. At the same time, their sales figures for Europe have increased while their sales in Asia and Brazil have decreased. In the civilian field, they developed head-mounted systems for civilian pilots (a spinoff from a major specialization of the company – flight helmets for fighter pilots, which now includes the joint project with Rockwell Collins involving the pilot helmet for the F-35 fighter). Another civilian activity – UAV flights for agricultural use in the USA.
Next year, Elbit Systems will continue to train the pilots of IAF through their simulators installed at the IAF Flying School and squadrons. They will continue to work on the development of a simulator system for cyber warfare scenarios. Elbit Systems is also involved in activities concerning protection for critical infrastructures and various cyber technology activities in the defense sector.
"The last year was a peak year as far as the maturation of new systems was concerned, among other things – as a result of the investments in R&D," says a senior Elbit Systems executive, "There are many examples: new Radar systems by Elisra, The GroundEye and Supervisor surveillance systems, the Spectro payload by El-Op, and, naturally – EverySight, the modern and highly innovative smart vision system for bicycle riders, which is currently undergoing the final trial stages. The bicycle rider will see actual data in front of his or her eyes. This is yet another spinoff from Elbit Systems' flagship product category – pilot helmets.
At the end of the year, Elbit Systems announced that their US subsidiary, Elbit Systems of America, won a contract for the manufacture of mortar systems for the US Army.
Loitering Munitions
Aeronautics (800 employees) focuses on the development, manufacture and marketing of unmanned aerial platforms and their range of products is marketed to IDF as well as to overseas clients (Aeronautics did not provide any details regarding their sales to IDF). About 1,000 UAVs by Aeronautics are in use around the world, most of them, quite naturally, in conflict areas. One of their most common products is the Orbiter UAV – a well-established platform which had been used operationally in Afghanistan and on many other battlefields and is currently serving 35 clients worldwide. "The Orbiter-4 UAV is currently in the final development stages and will fly very soon," says Aeronautics' VP Marketing, Danny Eshkhar. "It is a 50kg tactical platform with an endurance of 24 hours and a range of 150 kilometers."
At Aeronautics they are particularly proud of their latest developments in the emerging field of loitering munitions. "This year we completed the development of the K-1 loitering munition and signed the first deal with a foreign country," says Aeronautics' VP Marketing. "It is a 10kg platform fitted with a warhead, launched from a launcher or from the roof of a vehicle. It loiters for up to two and a half hours within a range of dozens of kilometers, and when ordered, it dives toward the target and crashes onto it. There is also an option of getting the loitering munition back to base. This platform is already operational."
Aeronautics provides numerous clients with a range of surveillance aerostats. Some of these aerostats have been deployed for a number of years around the Gaza Strip. Aeronautics' range includes small, medium and large aerostats. The smaller models are man-portable and operate at an altitude of 100 meters. The medium-size models rise to an altitude of 300 meters and the large ones to 600 meters. The aerostats carry surveillance cameras and various other sensors. Eshkhar explains: "In fact, the aerostat is a static UAV that does not consume fuel. It can monitor an area cell continuously (persistent area surveillance); it operates 24/7 and carries a surveillance camera, communication relaying capabilities and ElInt and ComInt sensors. The aerostat is tethered to a fixed point, it dominates a large area and is particularly suitable to such tasks as base and border security."
Next year, Aeronautics intends to place the emphasis on multirotor platforms: the company has acquired an Israeli multirotor company, and in 2017 they will continue working on the development of small, medium and large multirotor platforms, including multirotor platforms for fuel, water and ammunition resupplying. A large multirotor platform will be able to carry a load of 75 kg to a distance of 10 kilometers, in the context of military and civilian applications. Multiple-motor multirotor platforms are currently under development.
Eshkhar had this to say regarding the UAV-Multirotor-Aerostat trinity: "We are the primary contractor of the ideal solution – a system made up of aerostats, multirotor platforms and UAVs, providing a comprehensive solution of several platforms whose integration offers intelligence and information collection, surveillance and logistic support capabilities to warfighters or civilians."
The National Cyber Project
Giora Katz, VP Marketing at Rafael Advanced Defense Systems, concludes the last year as "A very good year as far as orders and sales were concerned. We progressed nicely in such leading product categories as missiles, electro-optics, remote control systems and unmanned weapon stations. In the field of active protection, IDF have recently concluded the future purchase of Trophy systems in large numbers. Last year we had nice activity in the fields of surveillance and cyber technology, and we continue to deliver Iron Dome and David's Sling systems in Israel and overseas. Rafael today is one major start-up."
Rafael had a backlog of orders of 20 billion ILS (2015 data), 7,000 employees and a sales turnover (2015) on the scale of 7.8 billion ILS. Their investment in R&D amounts to about 8% of their sales turnover and their net profit for 2015 was 459 million ILS.
Last year, Rafael intensified their activity in the Asian, Latin American, European and Australian markets, including the field of homeland security: "In the military field we are facing fierce competition, but we won a tender for the supply of unmanned weapon stations for the armored vehicles of the Lithuanian Army." According to Katz, Rafael is a global leader, offering operational systems in active air-defense and protection for armored vehicles on the move. "There are developments overseas with regard to the supply of Iron Dome and David's Sling systems," said Katz.
Additionally, Rafael developed the Drone Dome system, intended primarily to provide protection against multirotor platforms.
One primary activity that will keep Rafael busy in the next year involves the national cyber project (CERT), in which Rafael was selected to serve as primary contractor for the supply of cutting-edge security capabilities and protection for national computer infrastructures against cyberattacks. For this purpose, a group of companies was established that includes EMC, IBM, Cisco and Matrix, and charged with the development of solutions "that would provide Israel with advanced capabilities in the field of defense and security against cyberattacks."
