(photo credit: Associated Press)
On his first visit to Israel, US investment guru Warren Buffett praised Iscar Metalworking, his first-ever acquisition outside the US, as a model enterprise, while declaring his commitment to Israel and his interest in making additional investments in the country.
"Iscar and the Tefen Industrial Park should be taken as an example... around the world of what can be done against all odds," Warren Buffett said after his visit to Iscar. He purchased an 80 percent stake in the firm for $4 billion four months ago. "I knew Iscar was a sensation but I had to see it with my own eyes, and I am looking forward to going back to the US to tell people about it."
Charlie Munger, Buffett's partner at the Berkshire Hathaway investment firm, accompanied him on the trip. He said Iscar was "one of the world's greatest companies."
"With this purchase, we are sending an indirect message to the world for foreign investors to make similar investments," he said.
Buffett said, "Berkshire Hathaway and Israel will be here forever, as Israel and the US will be here forever."
Buffet arrived on Sunday afternoon and flew to Iscar in the Galilee in a private jet along with the Wertheimer family. He purchased the company from them in May in the biggest ever buyout of an Israeli company.
"Two miracles happened here. The first is Iscar, which is a unique business combination of brains, talent and imagination, and the second is the Galilee and the Tefen Industrial Park, which is very much underappreciated," said Buffett. "Being in Israel has a major advantage of having the exposure to a fabulous pool of talent and brains. When we bought Iscar, we bet on brains."
Regarding the security risk involved in doing business in Israel, Buffett said, "When you invest in Israel you have to take into account a certain risk. We live in a dangerous world as it is and in the long-term, the risk premium in Israel will not be different from the US."
Buffett said he was interested in making additional investments in Israel over the next year.
"I don't think we will be able to find another company like Iscar, but if we can find a business 50% as good as Iscar, we would be pleased," said Buffett. "To my knowledge, we have not received offers from Israeli companies, but for the purchase of another stand-alone company, we would be seeking a fair-sized company."
Buffett said Berkshire Hathaway was interested in places and companies where they understood the culture, and where there was "an understanding of investment capital" and the rule of law.
Buffett was shown around the Tefen Industrial Park by Iscar-founder Stef Wertheimer. Buffett was briefed about the progress of the industrial park, from the 1980s to the late 1990s.
Buffett also visited the German Speaking Jewry Heritage Museum at Tefen.
Buffett was set to meet later with Prime Minister Ehud Olmert before delivering a lecture in Jerusalem in the evening. He plans to return to the US on Tuesday.