ISRAEL AT WARAs war wages on, the local arms industry is booming
ISRAEL AT WAR
As war wages on, the local arms industry is booming
While many businesses are shut down due to the war with Hamas, the Israeli arms manufacturing industry has never been in such high demand. 190,000 new applications for weapons licenses were also added to the growing needs of the army and the new readiness teams, with tens of thousands of rifles and pistols already delivered to civilians. The price: loss of contracts abroad
A look around at the huge production hall of the pistol and rifle manufacturer IWI in Ramat Hasharon shows the unprecedented panic and pressure that are rising from all directions, on all fronts. All the production machines have been working here non-stop and around the clock for more than a month, even on weekends, providing hundreds of assault rifles every day to the IDF units fighting on the front and to the readiness teams that are arming themselves as well as personal pistols to the civilian market, which woke up frightened by the terror of the October 7 massacre in the south and jumped by hundreds of percent in the last month.
It’s not easy these days in the industry, and in the firearms factories that are urgently needed for both the front lines and on the home front, which is doubly difficult and complex. Many workers were recruited into the reserves by emergency call-ups, and at the same time, the demand from the field is soaring. About 40% of the employees of the arms manufacturer Ematan from Karmiel, owned by Reuven Zada, and about 20% of the employees of IWI, owned by the veteran arms manufacturer Samy Katsav, were drafted into the reserves last month. Both companies are trying to take in dozens of replacement workers to staff the production and assembly floors in order to be relevant to the Israeli arms race.
Already in the first week of fighting, Katsav recruited all his family members, including children and grandchildren, and put them on the assembly production lines. "Anyone who comes to help these days is welcome and blessed," he says. "This situation reminds me of the World War II movies of American citizens enlisting in the war effort to defend the home and working in weapons factories."
Chaya (75) has been working in the assembly workshop for a month with her friend Livna (72), and both roll up their sleeves and assemble guns with skilled fingers in an eight-hour shift. "Look, I already have the hands of a worker," she says. She is now assembling components for the Jericho pistols, a bit of variety after spending all of last week working on pickguards for Masada pistols.
This is the first time she has joined the effort on the production line, and this indicates the magnitude of the hour. "There has not yet been a situation where I had to come here to contribute to the general effort. During the coronavirus period, there was an extreme shortage of manpower and I wanted to come but they were afraid I would get infected so I stayed at home. My daughter and I are happy here. We feel that we are contributing something."
The opening shot of the Ministry of Defense
Had this war not broken out, IWI workers would have been busy these days moving their factory from the Elbit Systems complex in Ramat Hasharon to the industrial area in Kiryat Gat. The construction of their new complex, which measures approximately 23,000 square meters, was completed not long ago, and the complex adjustments to its workforce resulting from the dramatic change were also completed. Many dozens of workers from Netanya and northern communities have finished their work at the company in recent months and in their place about 200 workers from Kiryat Gat and the south have been recruited. This period when the demand for weapons soars daily is not the right time to move, and the workers from the Kiryat Gat area are transported daily to Ramat Hasharon.
The engineers of the development department also locked away plans for future products in the vault and left the laboratories to strengthen the production floor. "These are unusually busy weeks, guns are produced here endlessly," says Lior, head of the gun team at IWI. "We all understand that this is the order of the day. We all have a strong sense of mission, and what is most important to us is that our brothers in the south have reliable and good weapons to protect them."
But it is much more than "Brothers in the South". Many more sisters and brothers throughout the country are arming themselves with everything possible: pistols, long guns, short guns, and sights that improve accuracy. "All this demand expresses a very serious vacuum that was created in the field due to previous decisions by the government," says Ron Pollak, the VP of marketing for EMTAN, who lives in a kibbutz seven kilometers from the border with Lebanon. “In recent years we have gone down to nothing, to zero. Now there is panic and everyone wants to stock up and fill warehouses."
Since the beginning of the war, more than 190,000 applications for weapons licenses have been submitted to the Ministry of National Security, and in the first ten months of 2023, more than 210,000 applications have been submitted, and the year is not over yet. So far, about 31,000 licenses have been issued. For comparison, in 2022, 42,000 applications were submitted and approximately 13,000 licenses were granted. In 2021, about 20,000 applications were submitted and about 10,000 licenses were issued. This process of arming is dangerous for many reasons, but the manufacturers and dealers of weapons pull out their ready answers such as "it's not the gun that kills but the person who pulls the trigger", and "the licenses are issued selectively and in a professional and responsible process".
EMTAN's best-selling gun is the Ramon, named after the Israeli astronaut Ilan Ramon. About two years ago EMTAN signed a contract with the Spanish Federal Police for the supply of about 10,000 such pistols. It is sold in the same markets where IWI aims its best-selling pistol, the Masada, which was also developed in recent years and weighs significantly less than that of the old and well-known pistol, the Jericho. In both cases, the price of one gun ranges between NIS 3,000 and NIS 4,000 ($776-$1,000). Both companies clarified that they did not take advantage of the situation to raise prices.
The guns made in Israel are only a small part of the Israeli gun market, which is mostly made up of imported brands such as Glock, Sig Sauer, CZ, Beretta, Smith, and more. "98% of the guns in Israel are imported," says the chairman of the firearms division of the Association of Chambers of Commerce, Amos Golan. In the past, Golan was in command of the Counter-Terrorism School and the Duvdevan unit, and today he is the owner of Silver Shadow, which manufactures M4s and related weapon accessories. The focus on purchasing imported guns is mainly due to their international branding, personal taste, and convenience of the user, even though the price level is usually close to that of the local guns.
"There is a large aftermarket for all this equipment, and it can be a tremendous engine of growth. The reality on the ground justifies this. In all the terrorist incidents in recent years, we have seen that in places where there was intervention by armed civilians, the terrorists were neutralized. Even in the Hamas attack in the south, in places where the terrorists responded with fire there was less killing," says Golan.
A few weeks ago the head of the Samaria Council Yossi Dagan came to Katsav's factory and left an order for 200 Arad-type assault rifles. The Arad is based on the M4, went on the market last year, was quickly adopted by the Navy, and became the main service rifle of the special unit fighters. Now that the defense system has opened the budget dam, the demand for the Arad is also increasing from units in the Ministry of Defense and members of standby units, for whom the new standard is of a standard infantry fighter in the IDF.
At the beginning of the month, the Ministry of Defense's procurement administration ordered thousands of long-barreled M4 tools manufactured by their two companies from Mazada and Matsav, for more than NIS 100 million ($25 million). The Ministry of Defense's invitation is only an opening shot. The IDF intends to equip itself in the coming months with tens of thousands more M4 rifles, and the procurement administration of the Ministry of Defense intends to publish another tender. In the upcoming tender, a third Israeli manufacturer, Golan's Silver Shadow, which manufactures in Or Yehuda and is supposed to move the production to a new factory it has established in Modiin, will come into the picture in the coming months. He owns another factory in the USA. "It is important that the state purchases its assault rifles from Israeli companies," says Golan. He expects the Ministry of Defense to divide the procurement pie equally between the three manufacturers and prefer them over foreign manufacturers.
Katsav looks at the procurement fever, knows that this is only the beginning, and remembers the days that followed the Yom Kippur War. Katsav, 77 years old, is a veteran of Israel's defense industries. He founded the SK group of arms companies which, apart from IWI, includes Meprolight which develops and manufactures electro-optical sights for rifles and pistols, and Camero which deals with radar technology which detects and identifies happenings behind walls. In addition, he owns Israel Shipyards together with Shlomi Fogel and Asi Shmelzer.
The shock of the massacre in the south does not leave him. "They did things to us here that were not seen even in the Yom Kippur War," he says, "These are exactly the same stories I heard from my mother-in-law, may she rest in peace, a survivor of Auschwitz from the time of the Holocaust. How is it possible? How does the world not want to see we are right and understand us?"
"Abroad, they take advantage of the situation to steal contracts"
The war in Gaza has captured the entire Israeli arms industry, IWI, and its members within it, with the production floors busy with work against the background of the global armament fever created by the war between Russia and Ukraine. On the first day of the war, they quickly aligned with the Ministry of Defense's expectations, diverted all production to the needs of the IDF, and stopped exports, for all that this implies. “We immediately stopped the export work and diverted all activity to Israel without waiting to be told to do it,” Pollak says. “The very next day we sent out the first truck and in the first week of the war we supplied about 12,000 rifles to readiness teams and the army and thousands more guns to stores."
Katsav also understood very quickly the magnitude of the catastrophe: "First and foremost is the priority of the IDF, the police, and our security forces, there is no doubt at all. The needs of the Israeli security forces are at the forefront of our minds, and only then exports."
The VP of Marketing and Sales of SK Ronen Hamudot says that most customers abroad show empathy for the situation in Israel, but there are also those who are less patient and insist on receiving the goods on the specified date. "We do all we can to postpone delivery dates abroad. Most customers understand, but there are those who insist on receiving at the time we agreed on in advance. We understand that whoever buys something needs it and this situation requires us to make tremendous efforts because the country is also under a kind of siege. It is very difficult to fly in raw materials, the prices have soared and we are constantly looking for creative solutions." Katsav and Hamudot also recognize attempts by competitors in a world where contracts have been taken from us. "They understand that we are all here being recruited for war and are trying to steal contracts from us, turning to our customers with tempting offers," says Katsav.
Normally, about 90% of its produce is intended for export. However, against the background of the huge surge of manifestations of antisemitism that is sweeping the world, IWI canceled its participation in three defense exhibitions - in Thailand, France, and Colombia - in order to reduce prominence, also on the recommendation of security officials. "There aren't many flights anyway and most of our attention is directed to the IDF anyway," says Pollak.
The arms companies do not mourn the opportunities they are losing these days abroad. There they know that in the thick of the battles it will be very easy to sell to the world weapons that were used by the IDF's special units in the war in Gaza. "Sales to the IDF and the Israeli security forces are a sign of quality for any product in the arms sector," Hamudot says. "Sometimes the first question a potential customer asks us is whether the IDF and the police have been equipped with weapons. If the answer is positive, the chances are that we will move forward towards a deal."