Raytheon commits to Israeli reciprocal procurements

David's Sling  picture: Rafael
David's Sling picture: Rafael

Raytheon and Rafael jointly developed the David's Sling system for defense against heavy rockets and missiles.

US arms manufacturer Raytheon (NYSE: RTN) will make $9.5 million in reciprocal procurement in Israel over the next five years. The agreement was signed yesterday in the US by senior company officials and Ministry of Economy and Industry Division for Foreign Investment and Industrial Cooperation director Ziva Eger.

The agreement was sparked by cooperation between Raytheon and Rafael Advanced Defense Systems Ltd. in the development and production of the new David's Sling defense system against rockets and missiles. The two companies have equal shares in the venture: Rafael makes the interceptor missile for the system, while Raytheon produces the launchers, chassis, and other accessories for it.

In recent weeks, Rafael and Raytheon have begun delivery of the first parts of the system to the Israel air force aerial defense command, ahead of its approaching operational deployment. The system is designed to meet the threat of advanced heavy rockets and missiles that Iron Dome cannot intercept.

Raytheon, one of the world's largest arms manufacturers, is committing itself to reciprocal procurement in Israel for the first time. Under the new agreement, its procurement in Israel will focus on electronics and semiconductor enterprises, many of which are already subcontractors for Rafael in the various ventures in which it is involved.

The Division for Foreign Investment and Industrial Cooperation said that a large proportion of these companies were active in northern Israel. "The agreement with Raytheon constitutes a significant vote of confidence in the Israeli economy's ability to develop and promote products and cooperation with foreign companies that are leading international companies in their fields," Eger remarked.

Since 2007, when the program for joint development of David's Sling began, the US administration has allocated $800 million in special aid for it. US aid for this program, and for the Arrow 3 defense missile program, is slated to continue in the coming years.

Published by Globes [online], Israel business news - www.globes-online.com - on March 31, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

David's Sling  picture: Rafael
David's Sling picture: Rafael
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