Jabil Circuit Inc. (NYSE: JBL), the world's third largest electronics manufacturing services provider has opened an office in Tel Aviv's Ramat Hahayal high tech area in order to partner with start-up and emerging companies. Jabil has also signed a strategic cooperation agreement with electronics systems maker RH Technologies Ltd. (TASE: RHTCH) to use its plant in Nazareth Illit in the Galilee as Jabil’s Israeli manufacturing arm. Jabil cited that fact that Israel has the largest number of start-up companies in the world per capita, and its well-respected reputation for innovation and technology as its reason for the decisions.
Jabil’s Emerging Growth Team, which works with start-ups to bring new technologies to market and scale globally, is leading the Israeli operations, which will be headed by Tzipora (Tzipi) Landsman. Jabil, based in Saint Petersburg, Florida, has a market cap of $3.9 billion, and expects $17.4 billion in sales this year.
Jabil SVP Global Business Units Courtney Ryan said, “Jabil has a great reputation globally among entrepreneurial companies for our ability to help them grow as leaders in the market. We look forward to working with Israel’s innovative start-ups and to helping them succeed."
RH Technologies chairman Yaakov Rosenberg said that the collaboration with Jabil would bring foreign customers to Israel. He added that he expects to hire 60-70 employees over the coming year, boosting the company's workforce by 10%, to meet the expected increase in demand. As for additional capital investment, he said that the company's current investment in production lines was sufficient.
At a press conference, Ryan said, "We have no need to make investments, because we loved what we saw."
However, it is doubtful if Jabil will love RH Technologies' compensation to Rosenberg and CEO Gedalia Hammerman. RH's financial report for 2011 states that their salary cost was NIS 5 million each ($2.7 million altogether), despite heavy losses. In contrast, Jabil CEO Tim Main's basic salary was $1 million in 2011 - despite running a company 200 times larger than RH.
RH Technologies posted a net loss of $6.5 million on $154.5 million revenue in 2011, compared with a net profit of $3.8 million on $155.2 million revenue in 2010.
RH Technologies' share price rose 2.6% by midday today to NIS 4.66, after rising 5.6% yesterday, following the announcement of the collaboration with Jabil, giving a market cap of NIS 90 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2012
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