Israeli Aerospace Industries Create Brazilian Joint Venture

Israeli Aerospace Industries has decided to create a majority owned joint venture with Brazilian company Synergy Group. The new company would pursue various defense contracts, including for drones for the Brazilian military.

IAI is competing vigorously with Elbit Systems, also of Israel, and General Atomics for dominance in what it expect to be a large markets for drones in Brazil and Latin America.

Synergy is controlled by billionaire CEO German Efromovich. The joint venture will be called EAE Aerospace Engineering Ltd. With an initial capitalisation of just $1.5 million, it’s clear that the joint venture is likely just a shell company to link the technology and marketing efforts of each company.

Lately IAI has adopted the strategy of forming joint ventures with local companies, (thus exporting technology) rather than exporting phyical products. This helps to avoid export/import regulations and the political problems some countries have dealing with Israel.

Four Israeli arms companies eager to expand into the Brazilian market demonstrated their wares at the Latin American Aerospace and Defense trade show in Brazil in April 2009, to protests from local activists.

If Brazil’s dual policy of being favourable to Palestine causes while also developing ties with the Israeli arms industry seems confusing, perhaps the following passage from Revista Pangea will elucidate:

“But Lula´s skills to sew a broad political alliance and set up a new productive economic cycle, reducing Brazilian dependence toward international finance had seduced a good bunch of Jewish businessmen and professionals. Leading industrialists Ivo Rosset (textiles) and Eugenio Staub (electroelectronics) had openly left José Serra´s campaing for Lula, who also received a more discret support of steel magnate Benjamin Steinbruch. “Yes, I voted for Lula, since the last government drove our economy to a stalemate”, explains oil tycoon German Efromovich, owner of the Maritima Petroleum group. “We hope that the new government could promote changes for the best; otherwise, we´re sure that any change will be done inside democratic frames”, agrees Gerson Keila, chairman of the powerful Brazilian Franchising Association (ABF), who represents US$ 8 billions/year in business.

Even the traditional links between the PT and the PLO don´t seem to haunt Jewish leadership in Brazil. “Lula has clearly stressed his commitment both to a Palestinian State and to the safety of Israel”, grants Fisesp´s Jayme Blay. “There´re no expectations of a major change in Brazil´s international policy”, adds Claudio Camargo, Foreign Affairs analyst at IstoÉ weekly magazine. “The new government will try to increase dramatically the country´s exports, what could lead to new initiatives toward Arab markets.

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