Toner News Mobile › Forums › Latest Industry News › *NEWS*HP’S $60M INVESTEMENT IN ISRAEL ?
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AnonymousInactiveHewlett-Packard mulls $50-60m investment in Israel
HP will only invest if it obtains benefits under the strategic track in the new Investment Law.
Hewlett-Packard
is considering investing $50-60 million in Israel, Singapore, or China,
said HP-Indigo general manager Alon Bar-Shani, during a tour of the
company’s ink plant in Kiryat Gat.
If Hewlett-Packard picks Israel,
it will add 200 employees to its current workforce of 2,250
manufacturing, marketing and R&D staff.
Hewlett-Packard will
invest only if the government agrees to include the investment in the
strategic track in the Law for the Encouragement of Capital
Investments, which exempts foreign investment in preferential outlying
areas from taxes on dividends. To Hewlett-Packard’s displeasure, under
the new Capital Investments Law, Kiryat Gat is not eligible for
benefits. There is another, more significant, obstacle: the strategic
track applies only to investments of $150 million and up.
Bar-Shani
said, “In contrast to Intel, which demanded a huge grant from the
government, we’re not asking for contributions in tens of millions of
dollars in investments. However, we want to be sure that we’ll receive
at least as much support in Israel as for a new plant in Singapore or
the Scitex Vision plant in China. I’m sure we’ll reach an overall
investment of $150 million, but it will be gradual.”
Until now,
Hewlett-Packard has obtained approval for investment under the regular
tax break track, but it wants to be eligible for the strategic track,
which is designed to attract foreign investment.
Bar-Shani said
Hewlett-Packard had discussed the matter with former Minister of
Finance Benjamin Netanyahu, and later with Minister of Finance and
Minister of Industry, Trade and Labor Ehud Olmert, and that talks with
the Investment Promotion Center were continuing. However, the
Investment Center has taken no decision, and under the current
political uncertainty, it was not clear when a decision would be made.
Investment
Promotion Center director Hezi Zaieg CPA told “Globes” that HP-Indigo’s
investment would not be approved because it did not meet the mandated
$150 million threshold for a strategic investment. In order to meet the
threshold, Hewlett-Packard asked that its acquisition of Scitex Vision
for $220 million be taken into account. However, Zaieg said, “We won’t
begin considering acquisitions of Israeli companies as investments
eligible for benefits.”
Hewlett-Packard (Israel) managing director
Gil Rosenfeld said Hewlett-Packard was positioning Israel as the
capital of digital printing. The company’s activities in Israel total
$835 million, half of which is exported. 65% of domestic sales are to
business customers.
Hewlett-Packard invests $3.5 billion a year in
R&D, and developed 650 new products in 2004. $1 billion was
invested in digital printing, one tenth of which was invested in
Israel. Hewlett-Packard invested $100 million in HP-Indigo’s ink plant
in Kiryat Gat. The current investment is intended to expand this plant
to produce new products. Hewlett-Packard is also considering setting up
new plants to meet demand for digital printers.
Rosenfeld said
Hewlett-Packard Israel had signed a new kind of contract with Osem
Investments Ltd. , under which Hewlett-Packard provides infrastructure
and support for Osem’s Petah Tikva center, with payment on the basis of
actual use. He said contracts of this kind cut computer costs for large
customers by 20-25% under. -
AuthorDecember 1, 2005 at 10:18 AM
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