Finance Comm. approves $525m. grant for Intel plant

The Knesset's Finance Committee has unanimously approved providing global semiconductor company Intel with a grant of $525m. to build a new factory next to its plant in Kiryat Gat. Intel is planning to invest $4.4 billion on constructing the facility, called FAB 28, and on upgrading the existing one, called FAB 18, the Industry of Trade, Industry and Labor said on Monday after the vote took place. Intel Israel general manager Alex Kornhauser told the Finance Committee that work on the plant would begin within a few days and that the promise of state aid had helped Intel decide to build the plant in Israel rather than elsewhere. "Alex Kornhauser explained to the committee members that one of the proposals Intel was considering was building a new factory in India, but because the government wouldn't provide a grant, the management decided not to build a plant there," the Finance Committee said in a press release. Despite the announcements from the committee and from the Ministry of Industry, Trade and Labor, Intel Israel spokesman Koby Bahar declined to comment on the vote, saying that Intel hadn't officially confirmed it was building the plant in Kiryat Gat. In contrast, Finance Minister Ehud Olmert was more expansive and welcomed the cross-party vote. "This decision broadcasts to foreign investors stability in the government's economic policy and its support of foreign investment in Israel," said Olmert, who is also the Minster of Industry, Trade and Labor. "The nature of the Finance Committee's vote, despite all the existing political divisions, signals above everything else that there is a consensus in Israeli society regarding foreign investment in general and in Intel's investment in particular," he added. During its deliberations, the ministry told the Finance Committee that Intel expects to hire 4,400 workers at the new factory in Kiryat Gat, adding to the 3,500 workers already employed there and to the total of 5,400 people employed in Israel. Intel will look to hire engineers, scientists, financial advisors, skilled industrial production workers, cleaners and cooks. The ministry expects the new factory to inject $450m. into the economy, with Israeli law stipulating that the government receives 23.5% of the profits from the project. Intel first came to Israel in 1974, when it established a research and development center in Haifa, its first outside of the US. Since then, the company has added other R&D centers in Yakum, Jerusalem and Petah Tikva, as well as factories in Jerusalem and Kiryat Gat.