Ashkelon Desalination Plant

Ashkelon Desalination Plant is a high security facility because it provides a invaluable resource called water. Much as the developed world may not realize, water a strategic asset and an problem can cause considerable effect on Israel.

The Ashkelon Panlnat provides 15% of Israel’s requirement which is 120 million cubic meter of water (1 cubic meter = 1000 gallons). The plant is owned by two partners with equal shares Violia Environment and IDE Technologies. The plant is operated on BOT – Build, Operate and Transfer Contract. The private companies have a 25 years time to hold the plant and later it will be transferred to the Israeli government. After 45 years, the plant with many other like it would aim to produce 80% of water through Desalination for the Israel. The current price of water sold by the plant to the government is approximately 80cents per cubic meter.

Technology – The Desalination plant uses a advanced technique called Reverse Osmosis. Reverse Osmosis is the process of send water from high concentration side to low concentration side which are seperated by a membrane by applying immense amount of pressure.

Stages of Desalinization:

  1. Pumping sea water (intake)
  2. Pre-treatment
  3. High Pressure Boost
  4. Sea water Reverse Osmosis
  5. Post-treatment (Add some necessary minerals to water)

However the main ingenuity of the plant is in the use of the high pressure brine from the desalination filter to pump in more pressured water rather than using it for power generation with a turbine.

Chiasma with Medasense, Exalenz and Commwell

The CEO of Chiasma Fredric Price who had given our class a presentation of Entrepreneurship in general and Entrepreneurship in Israel had brought together a panel of CEO and Founders of entrepreneurial ventures in the Bio-Pharma industry.

The panel presentation started with the introduction from Dalia Megiddo MD, Managing Partner, Expedio Ventures. She spoke about the general entrepreneurial scene in Israel and the important attributes of entrepreneurs and what VCs expect from the entrepreneurs.

Later Ms. Galit Zuckerman, CEO Medasense Biometric Ltd., talked about her experience of being an entrepreneur. The two most fascinating parts of her presentation were:

  1. The cycles when she as an entrepreneur needed to raise money from the VCs and the concept of “Financeable Milestone”. In case of her business this milestone was to conduct clinical trials before entering the market.
  2. The product developed by her company Medasense which includes a device attached to the finger of the patient and is used to detect the degree of pain experienced by the patient. The whole logic behind the analysis was extremely fascinating.

The next presenter was Steven Eitan, CEO, Exalenz discussed about the innovative product “The BreathID” which can test disorders like H.pylori through non-invasive breath testing. The process of testing involved patients drinking a potion based on the earlier testing for a particular disease. The patient would then breath through tubes and a machine attached to the tube would analyze the particles in the breath to diagnose the disease.

Dana Gelbaum, VP Commercial Planning, Chiasma gave the next presentation regarding the innovative oral pill that Chiasma was developing to replace injectable drugs. Chiasma was performing cutting edge R&D in this field and had successfully tested most of its products and had won FDA approval.

The final presentation was from the Daniel David, Commwell Medical who discussed about the products of the company which could be used by patients remain in touch with the doctor for observation and also stay at comfort of their homes. The observation of the patient would be done through the device which are in the form of a hand glove called the Physio Glove and a chair Health-e-Care. These product send the necessary information to the doctor remotely located in a hospital.

Iscar

Mr. Stef Wertheiner greeted us at the massive Iscar R&D facility. Iscar makes cutting tools for the Metal industry. They believe in the Motto “Where Innovation never stops!”. Iscar believes in improving productivity through innovation. They innovate by bench marking their products with their current products and competitors’ products.  They follow the concept of Modularity which is to limit change in production & machine costs.

According to Mr. Stef Wertheiner, Iscar’s business model is like the razor blade model. Iscar is customer oriented business with the following principles:

  • Committment
  • Confidence
  • Cost Cutting
  • Customer Relationship
  • Improving productivity

One of the examples of customer oriented business is that Iscar demonstrates live action of the tools of the company at its R&D sites.

Mr. Wertheiner believes Mr. Warren Buffet who purchased the company for $4 billion was impressed by three aspects of Iscar:

  1. Level of innovation
  2. Human Factor
  3. Profit Margin

Itamar

Mr. Giora Yaron the Chairman and Founder of Itamar welcomed us to the company office. He had Engineering and management background with a PhD in Physics (Flash Memory). Mr. Yaron talked about the possible reasons for Israeli going hi-tech and sighted Israeli military as a primary reason. The companies which develop technologies for the Israeli military also look for ways to commercialize it. Thus he got the idea of the non-invasive “Pill cam”.

Mr. Yaron also pointed out to the importance of academic infrastructure as a launch pad for Israel hi-tech industry. He noted with satisfaction that the Government support through Yissum was important and massive. He also complemented the government in Israel for jump starting the Venture Capital (VC) industry. Government matched every dollar to dollar of VC investment with its own money.

There was one important deficiency in the Israeli and that was of management due to the commanding style of management gained by most of the Israelis from their military careers. This gap or deficiency was filled by the multinationals. Most of the Israeli companies are registered in Delaware because of similarities of law.

According to him, Israel main industry focus had changed several times over the years. In the 1980s, the main industry changed from Communications to Data Center. In the 1990s, the main industry was Internet Applications industry and 2000s the Software Industry. Some of the important outcomes were companies like Check Point and Galileo.

Finally, Mr. Yaron talked about the rise of Chindia (China & India) which provide low-cost highly educated work force. This brought a lot of competition to the Israeli companies but the high-end focus has helped Israel stay afloat and in some cases on top.

Liliyot Restaurant

Mr. Allan Barkat owns the Liliyot Restaurant which provides training to teenagers between 16 to 18 years of age. The training program is 2 – 3 weeks and its paid. Each program has 15 students and a social worker to manage their training. Nearly two-thirds of the students pass out successfully. These teenagers are mostly the ones who had a troubled life because of drugs and violence. This their second chance for a normal life. The restaurant functions as a Profit organization but spilts its 50% of its profits for Not-for-profit activities. The restaurant also provides software job oppportunities for disabled people. Liliyot has five restaurants in Tel Aviv. The management has a retail store in Jaffa with a girl who was a drop out. Mr. Barkat started of as a hi-tech entrepreneur and then became a Venture Capitalist and finally a Social Entrepreneur.

Better Place

Better Place is an amazing company which believes it will pioneer the transformation of transportation. They will replace the Internal combustion engines which run on petroleum products with electric motors which use green and sustainable energy.

The idea was first conceived by Shai Agassi who later founded Better Place. The company was supported by Shimon Peres in its initial fund-raising. The company has been able to gain close to $750 million is three fund-raisers.

The Better Place Visitors Center located at Pi Glilot compound Ramat Hasharon Tel Aviv, Israel. We were first greeted by the Global Business Development Manager Mr. Scott Mortman. Mr. Mortman also gave us an introduction about the history of Better Place followed by goals and challenges of the company.

According to the Better Place official website, the company offers several products & services along with the Electric Vehicle. Following are the products or services:

  1. Batteries
  2. Switch Stations
  3. Charging spots
  4. EV driver services
  5. EV Network Software

We were then showed a short movie on Better Place. The video described the way the Better Place switch stations and charging spots would work and how the driver services would help analyze the battery consumption and help the driver navigate to the nearest switch station.

Each of us was then give a chance to take a test drive of the Electric Vehicle (EV). We could see the amazing acceleration of the vehicle and a monitor indicating the consumption of the battery power as per the acceleration. When there is no acceleration and the vehicle is in motion then it produces electricity thus increasing the battery life.

After the test drive we met with Mr. Yariv Nornberg, Policy Manager, Better Place. Mr. Nornberg told us an interesting fact about the Visitors Center. The center is located on the top of what once was an oil reserve. He answered the questions of the team in detail.

Following are the major points based on his answers:

  1. The maintenance cost of the Electric Vehicle (EV) are low because there are less moving parts.
  2. The insurance costs are also low because the car cannot be stolen.
  3. Better Place is currently located in Israel, Denmark and Australia.
  4. China is also interested in studying the technnology and has partnered with Better Place
  5. Batteries will be used for other purposes after 5 years of battery life.
  6. Lithium Ion Battery is safe and can be manufactured easily about 3 billion units
  7. Nissan is first of its car manufacturer and Better Place is working with other car manufacturers for partnership.
  8. Target customers of Better Place are leased cars and taxies.

Tel Aviv Stock Exchange

The third day in Israel was the start of the course work. So I went out for walk along the beach in the morning just to freshen up before the long and exciting day ahead.

We first visited the Tel Aviv Stock Exchange. There was no one trading in the stock exchange. It was completely computerized and all we saw some monitors displaying the stock changes. The Tel Aviv Stock Exchange representative Mr. Kobi Avramov gave us an insightful presentation of the history of the Stock Exchange.

The Tel Aviv Stock Exchange was unofficial started in 1935 and which eventually became official in 1953.  In 1999, the stock exchange made all its transactions fully automated.

The trading system is also called TACT and has the following attributes:

  1. Fully Automated
  2. Order-driven
  3. Central order booth
  4. Price & time priority based
  5. Anonymous tracking

We also learned about the changes in the Capital Gains Tax in Israel. There was no Capital Gains tax prior to 2003. In 2003, the tax was introduced and set to 15% which was then increased to 20% in 2006 and recently was raised to 25%.

We also learned about the TASE Globalization in the last decade. From 2001 to 2007, Israel received significant investments. There was a major market crash in 2008 due to recession and a second crash in 2010. However despite these crashes, MSCI upgraded Israel from emerging to developed market in May 2010.