As every month, VC Cafe is re-posting the “Invest in Israel” Newsletter, published by the investment promotion center of Israel’s Ministry of Industry, Trade and Labor, which offers many helpful tools for prospecting investors. See the January 2011 edition after the jump. For previous editions, click here. Bonus video: Israel is chairing Eureka this year, and have produced this video on advancing R&D in Europe.
NEW LAW FOR CAPITAL INVESTMENTS OFFERS LOWER TAXES, HIGHER GRANT
The Israel Parliament (“Knesset”) recently approved the new Law for the Encouragement of Capital Investments directed at supporting the industrial sector with a wide range of programs.
Under the new law, corporate tax will gradually be lowered so that by 2015 companies located in the center of the country will pay just 12%, while those located in the priority area, in Israel’s north or south, will pay 6%. The dividend tax for all eligible companies in all areas will be set at 15%.
Companies located in priority areas will also be eligible for investment grants of 20% of an approved investment plan. Any industrial company that exports part of its production automatically qualifies for benefits under the law.
Large corporations with a turnover of more than 1.5 billion shekels and a combined balance sheet of 20 billion shekels will be entitled to a company tax rate of 8% in the center of the country if they invest at least 800 million shekels in capital improvements. The rate drops to 5% in the Priority Area if they invest at least 400 million shekels for this purpose. These criteria can be interchanged with R&D investments or a large employment program by the company, as per the law.
ISRAEL 2010 GDP GROWTH WELL ABOVE OECD AVERAGE
Israel’s GDP rose 4.5% in fixed prices in 2010 according to preliminary estimates by the Central Bureau of Statistics, almost double the expected OECD average of 2.7% for the year. Israel’s GDP per capita rose by 2.7% in 2010, while the OECD average is seen at 2.3%.
Israel’s GDP was mainly supported by strong investment in fixed assets, including residential housing, which rose 10% in 2010, compared with an OECD average of 2.2%. Periods of rapid growth in exports and private consumption also helped underpin the rise in GDP.
Israel’s average unemployment rate of 6.7% in 2010 is also well below the OECD average of 8.3%.
MANPOWER STUDY SHOWS DEMAND FOR HI-TECH WORKERS IN ISRAEL UP 41%
According to research conducted by the personnel firm Manpower, the demand for high-tech workers rose 41.3% in 2010, and for employees in the banking, finance and insurance sectors 64%. The demand for all workers in Israel rose 16.6%.
Data from the Central Bureau of Statistics show that the number of vacancies in the business sector from December 2009 to December 2010 rose by 57% to 56,800 slots.
CHEMCHINA BUYS 60% OF MAKHTESHIM AGAN INDUSTRIES
China National Chemical Corp (ChemChina) is buying 60% of Israel’s MA Industries, the world’s largest maker of generic crop protection chemicals, in a deal which values the company at $2.4 billion.
MA, which competes with Monsanto, Bayer and Syngenta, ultimately will become private. Israel’s Koor Industries, an investment company with holdings in Israeli telecom, defense electronics, agro-chemicals and venture capital markets, will retain 40% of the maker of fungicides, pesticides and herbicides. Koor is controlled by Discount Investment Corp, a subsidiary of IDB Holding Corp. ChemChina, a state-owned company formed in 2004 from the former Ministry of Chemical Industry, had sales of $23 billion in 2010 and assets of $29 billion.
ChemChina is among the country’s largest industrial firms and is divided into six units, the largest of which are Advanced Materials & Specialty Chemicals, Chlor-alkali & Basic Chemical Products, and Agrochemicals. The Beijing based company also refines petroleum, manufactures rubber and silicone products, as well as specialty chemicals. It operates in 140 countries worldwide.
ISRAEL’S PERRIGO BUYS PADDOCK LABS
Perrigo, a maker of over-the-counter drugs and infant formulas, agreed to buy the assets of Minneapolis-based Paddock Laboratories for $540 million in cash.
Paddock Labs makes and markets 35 generic pharmaceuticals and boasts a pipeline of more than 25 experimental drugs currently pending approval by the U.S. Food and Drug Administration.
Perrigo, which recorded net sales of $2.7 billion in 2010, has made 14 acquisitions over the last six years, the largest of which was PBM Holdings Inc., which it bought last year for $808 million.
INTEL-ISRAEL DEVELOPS NEW CHIP “SANDY BRIDGE”
Intel Israel Ltd.’s Haifa R&D Center has developed a new microprocessor called Sandy Bridge, which is set to be launched in early 2011.
The chip combines graphic core processing (GPU) alongside a central processing unit (MPU) and includes a higher work speed as well as lower energy needs to help extend laptop battery life. Twenty-nine processors will rely on the Sandy Bridge architecture, including 15 processors for laptops and 14 processors for PCs. The new architecture will be installed in all standard computer products lines (i.e. Core i3/i5/i7), and, in the future, probably in servers as well.
Intel’s Israeli team has played a central part in the company’s growth since the establishment of the company’s first design and development center outside the U.S. in Haifa in 1974. Among others, the team was instrumental in the development of the Centrino processor, which changed the company’s strategic roadmap, in 2003, and the Duo Core 2 architecture in 2006.
INTEL-ISRAEL TO HIRE 1000 NEW WORKERS TO DEVELOP 22NM
Intel Israel plans to hire 1,000 new employees in 2011 to develop and produce 22 nanometer technology. The semiconductor giant intends to invest $2.7 billion in 22 nm technology over the next two years, and intends to upgrade and develop its Kiryat Gat factory in preparation for the planned production.
Intel Israel currently has 7,057 employees and is indirectly responsible for the employment of an additional 20,000 people countrywide.
Intel Israel exported $2.7 billion in 2010, down from $3.4 billion in 2009 but up from $1.39 billion in 2008, and $1.54 billion in 2007. Intel Corporation (Nasdaq: INTC) had revenue of $43.6 billion in 2010.
ISRAELI UNIVERSITIES RANKED HIGHLY IN SHANGHAI INDEX
Israeli universities were rated highly across a variety of academic fields in the Academic Ranking of World Universities issued by China’s Shanghai Jiao Tong University.
In the field of computer science, five Israeli universities were ranked in the top 100 with the Weizmann Institute of Science listed 12th, the Technion Israel Institute of Technology ranked at 15, the Hebrew University of Jerusalem ranked 21st, Tel Aviv University at 31, and Bar Ilan University at 76.
In mathematics, Tel Aviv was rated 26th and the Technion and Hebrew U were listed among the top 75; in physics, Hebrew U and Weizmann were listed in the top 75 and Tel Aviv University was listed in the top 100; in chemistry, the Technion and Weizmann were ranked in the top 75; and in economics and business Hebrew U was listed 44th and Tel Aviv was ranked among the top 100.
Every year, Shanghai Jiao Tong University evaluates more than 2,000 universities and ranks the top 500 among them. The rankings, which have achieved respected world recognition, are based on a combined scale of academic criteria that include awards won by alumni and staff, articles published in leading scientific journals, and the number of highly cited researchers.
POWERMAT LAUNCHES NEW WIRELESS CHARGER FOR CARS
Israeli start-up Powermat, a worldwide leader in wireless charging, recently launched new technology that allows drivers and passengers of General Motors vehicles to wirelessly recharge electronic devices.
The wireless recharging pallet that is affixed to the car’s dashboard recharges mobile phones, MP3 players as well as other electronics that are placed on the device. The pallet also heats and cools drinks.
Powermat was founded in 2007 and has sold in excess of 750,000 products since its launch, rapidly establishing its niche as an industry leader.
JASPER OPENS ISRAEL R&D CENTER
“Israel has the ideal mix of high-technology business, innovation and educational infrastructure, making it perfect for our needs,” – Ziyad Hanna, general manager of Jasper Israel.
Jasper Design Automation, a provider of advanced formal technology solutions, is opening an R&D Center in Haifa, Israel.
Focused on advanced product development and research, the Israel-based team will play a significant role in the technology and business advancement of the company’s industry-leading formal technologies.
“Jasper continues to invest heavily in R&D worldwide, and being in Israel places us close to leading-edge designers and additional great talent in software and hardware to continue our growth and innovation,” Hanna said.
Jasper Israel is located in the Matam Scientific Industries Center, one of the country’s largest high-tech parks and home to numerous multinational companies including Intel, Google, Microsoft, Philips, Zoran, and others.
Jasper also has R&D Centers in Brazil, Sweden and at its headquarters in Mountain View, California.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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