Israel sold some $7.5 billion in defense products in 2012 – a record high – the Defense Ministry revealed on Tuesday, but officials voiced concerns that the coming year could see a slump in sales.

Speaking to reporters at the Defense Ministry in Tel Aviv, Brig.-Gen. (res.) Shmaya Avieli, director of Defense Export and Defense Cooperation (known by its Hebrew acronym, “Sibat”), pointed to an ongoing economic downturn as one factor for decreased projected sales.

He added that with the conflicts in Afghanistan and Iraq coming to a close, decreased demand for military products by coalition members will have a significant impact on the global defense industry. Additionally, Europe has a stated policy of preferring its own defense suppliers.

“Israel is in the top 10 defense exporters in the world, if not the top five,” Avieli said. According to figures he unveiled, 25 percent of Israeli defense exports involve air defense systems, while sales of satellite platforms and radars collectively made up 24% of the revenue.

Defense exports constitute 10% of Israel’s total industrial exports, not including diamonds, and 75% of Israeli defense manufacturing is slated for export to foreign markets. Although there are fears of a drop, Avieli said he did not expect 2013 to fall short of defense sales in 2011, which recorded some $5.8b. of exports.

The most lucrative market, Avieli said, was the Asia and Pacific region, where states are preoccupied with building up their militaries, and where $4b. of Israeli defense products were purchased in 2012.

Israel recorded $1.64b. of defense sales to Europe, while US purchases totaled some $1.2b.

As a result of the decision to shut down an IAF squadron due to cuts in the defense budget, Israel has recently placed F-16 fighter jets on sale. The Iron Dome anti-rocket system is also on offer to foreign clients.

“Investment in defense research and development not only produces returns for Israel’s security and the IDF’s strength, but also provides a high economic yield, to the benefit of the Israeli market,” Avieli said. “All of the credit goes to the industries, to the Israeli mind, and to the good ties Israel has with many states in the world.”

Brig.-Gen. Eitan Eshel, head of research and development for the Defense Ministry’s Administration for the Development of Weapons and Technological Infrastructure (known as “Mapat“), said the IDF had access to technological solutions – both operational and under development – to the threat posed by the Russian S-300 air defense system. Moscow has vowed to complete the sale of the system to Damascus, which would threaten IAF activities in the region.

Eshel added that the US is weighing the purchase of Rafael Advanced Defense System’s Trophy tank protection platform, which offers 360- degree defense against incoming threats and was first used operationally in 2011 by an IDF tank crew near Gaza. The US is testing Trophy out on its Ground Combat Vehicle, an armored infantry platform under development. Trophy “also identifies the source of fire and enables the tank’s weapon systems to quickly take aim at the source,” Eshel said.

Israel Aerospace Industries’ subsidiary Elta Systems produces early warning and control planes; the US is the only other nation to offer such aircraft. Rafael’s SPICE guided missile system is being sold “around the world,” Eshel said. He added that Israel is second only to the US in drone production, noting the dozens of Israeli drone models on sale.

He also mentioned robotic warfare, including autonomous armored vehicles and small robots for counter-terrorism missions, as a breakthrough Israeli specialty.

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