Israel has fortified its defense procurement strategy by placing a substantial $760 million order for ammunition from domestic defense titan Elbit Systems throughout 2023. This transaction, announced in a company statement, underscores a significant push by the Israeli Ministry of Defense to bolster its military capabilities amidst ongoing hostilities.
The surge in procurement activity is a direct response to heightened security concerns following the Hamas attack on October 7, 2023. The Ministry of Defense has accelerated its acquisition timelines, reflecting the urgency of the situation. “As previously reported by the Company, since the beginning of the Swords of Iron war [the Gaza conflict], Elbit Systems has experienced a material increased demand for its products and solutions from the Israel Ministry of Defense compared to the demand levels prior to the war,” Elbit Systems stated.
Prior to the conflict escalation, the IDF had already commenced its procurement from Elbit Systems, placing a $60 million order for 155mm ammunition in August 2023. However, the recent conflict has catalyzed a broader procurement drive, with total purchases from local companies amounting to $1.64 billion by November 2023. This procurement surge reflects a strategic emphasis on supporting local industries, embodied in the government’s “Blue and White” policy.
The $760 million ammunition contracts encompass various types, though Elbit has not disclosed specific details. The contracts are set for execution over two years, indicating a sustained demand for munitions. Elbit’s acquisition of Israel’s government-owned IMI in 2018 has positioned the company as a key supplier of a wide range of ammunition, from small caliber rounds to tank and artillery shells.
In line with the increased operational tempo, the Ministry of Defense has also tendered for tens of thousands of small arms, including AR-type rifles and the Israeli Tavor rifle, reinforcing the tactical capabilities of the IDF.
Elbit Systems has acknowledged the unpredictability of future demand but remains prepared for potential surges. “Elbit noted that further developments were ‘difficult to predict’ but said that increased demand for Elbit’s products could continue to ‘generate material additional orders’.”
Relevant articles:
– Israel ordered $760M in ammunition from Elbit Systems in 2023, Breaking Defense, 05/23/2024
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