Dawn Of A New Era
Economic barriers between Israel and Japan and
South Korea are coming down.
NEIL COHEN AND RACHEL NEIMAN SPECIAL TO THE JEWISH NEWS
T
he timing was purely coin-
cidental. But while Israel
Prime Minister Yitzhak
Rabin was leading a dele-
gation of industrialists to Japan
and South Korea earlier this
month, Avner Rotman was sign-
ing his first major deal with a
Japanese company, a deal he
pursued for more than three
years.
Biodar, Mr. Rotman's small
but fast-growing specialty chem-
icals company in Rehovot, Israel,
had courted Takeda, the Japan-
ese chemicals and pharmaceuti-
cals giant.
"We wanted to buy raw mate-
rials from them, we suggested
joint ventures, we wanted to
work with their agents in the
United Kingdom and the United
States. Somehow, nothing ever
materialized," Mr. Rotman says.
Things have clearly changed:
"In the last year, relations sud-
denly warmed up very quickly,"
Mr. Rotman says.
Earlier this month, Takeda
agreed to distribute Biodar's
products alongside its own in the
United States, and the compa-
nies are negotiating expanding
their relationship.
Mr. Rotman is not the only one
to feel the change.
"Japan today represents Is-
rael's second most important eco-
nomic target after the United
States," said Elhanan Harel,
head of the Israel-Japan Cham-
ber of Commerce.
Israeli exports to Japan rose
18 percent in the first nine
months of 1994 to $681 million.
Imports fell 14 percent to $690
million, mainly because of the ex-
pensive yen, he said.
Israeli exports to South Korea,
mainly diamonds, machinery and
chemicals, surged in 1993 from
$89 million to $137 million, equal
to the amount of imports, said
-Marie-France Yitzhaki, deputy
director of the Asia division at the
Israel Industry and Trade Min-
istry.
Israeli exports to South Korea
for the first six months of 1994
were $87 million. Imports, pri-
marily cars, metal products, rub-
ber, chemicals, textiles and shoes,
grew significantly as well.
"There has been a great deal
of interaction with Japan and
South Korea over the past two
.years," says Arye Gabay of the Is-
rael Foreign Ministry's Asian
trade desk.
`There have been exchanges of
official and non-official delega-
tions from the Israel Manufac-
turers Association and the
chambers of commerce. What is
of particular importance is that
both countries are sources of in-
vestment in Israel."
The information division at the
Israel Chambers of Commerce
also reports an increase in
queries and contacts from Japan
and South Korea since the peace
Despite this rosy picture, offi-
cials say there are important dif-
ferences in Israel's business
relations with South Korea and
Japan.
"South Korean companies are
flocking to Israel. They are very
bold in their penetration of the
Israeli market," Mr. Harel said.
The Arab boycott is no longer
a barrier in doing business with
South Korea, which renewed
diplomatic relations with Israel
in 1992, Mr. Yitzhaki said.
But companies; in Japan are
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P.W.#
process began.
Over the past year, big South
Korean conglomerates Goldstar,
Samsung and Hyundai have sent
delegations, says Dani Amar,
who represents the South Kore-
an firm Hai Tai in Israel.
"They are visiting factories,
learning about our high-tech,
agriculture and chemical indus-
tries and looking at Isiael's po-
tential for joint ventures," Mr.
Amar said.
Hai Tai, which flouted the
Arab boycott by opening its Is-
raeli offices in 1993, was the first
large South Korean fum to enter
Israel.
Mr. Amar's operation, which
has been contracted to build the
new Dead Sea Works' power sta-
tion, "is also trying to interest
South Korea in Israeli software.
We see potential in expanding re-
gional trade with Jordan and
Egypt, as well as creating ties be-
tween companies."
still fearful —Japan depends on
the Arab world for 70 percent of
its oil.
"The Japanese government
has openly stated it is opposed to
the boycott. But some companies
are reluctant to change their tra-
ditional marketing policy," Mr.
Harel said.
Mr. Yitzhaki predicted Japan-
ese and South Korean trade
houses would open offices in Is-
rael in the near future.
Mr. Gabay says large Japan-
ese firms are also inquiring about
Israeli companies, albeit cau-
tiously and anonymously.
"In the past two years, many
Japanese multi-nationals which
had never been represented in Is-
rael have begun to visit," Mr.
Gabay said.
"Some have even opened of-
fices under false names in the
hope that as the peace process ad-
vances, those offices would begin
to operate." El
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