Years of developing weaponry and defence systems for Israel's armed forces have left Rafael with a powerful armoury of products

There is not another defence company in the world with 5,000 employees that offers our level of variety of capabilities," says Ilan Biran, chairman of Rafael Advanced Defence Systems. The state-owned entity has been developing technology for the Israeli ministry of defence since the birth of the nation and produces a suite of missile componentry, electro-optics, electronic warfare systems and communications networks - some of which it offers for export while others are classified.

Research and development

Biran says Haifa-based Rafael's main strength is the "unique capability and devotion of its scientists and engineers" - almost 60% of its employees are science graduates and a tenth of these hold PhDs. It also invests between 7-9% of its revenues back into research and development. Years of experience providing an across-the-board service to the Israeli defence forces have left it with one of the widest portfolios in the industry. Product areas include: seekers and electro-optic payloads, guidance and navigation systems, image processors, rocket motors, space propulsion, warheads and explosives, thermal batteries, pyrotechnic components, antennas and radomes and secure data links. Products include the Python and Derby air-to-air missiles, Spyder air defence system, SkyLite tactical unmanned air vehicle and Protector naval unmanned surface vehicle. It is also involved as a partner with Israeli and international companies in a number of programmes.

In addition, the company co-owns (with Elron) Rafael Development Corporation, an organisation that incubates start-up businesses developing commercial spin-offs from Rafael proprietory technologies, in everything from medical equipment to computer game visuals (see previous story).

Although still effectively an arm of government, Rafael has been progressively independently run for the past decade, allowing it to more aggressively pursue export markets. It finished 2006 with an order backlog of $2 billion and revenues of $973 million, a 12% increase in the previous year, around three fifths of which was from exports.

Its biggest markets are Europe and Asia, with only around a fifth of its overseas sales to North America, where it is keen to establish more partnerships with domestic primes. "We need to try harder. My dream is to do better in the US," says Biran.

He is a government appointee, but believes passionately that Israel's three big state-owned defence companies - Israel Aerospace Industries, Israel Military Industries and Rafael - should be fully privatised and allowed to merge individual businesses or raise funds to expand their footprint abroad. At the moment, nationalised defence firms are hamstrung by the need to seek "the approval of a government committee if you want to raise equity or buy another company" he says, adding: "I was addressing the issue of consolidation 10 years ago. It is the only way to develop the unique capability the government needs."

Source: Flight International