Recently, I was asked to look into the potential of a national study to measure the economic impact of Israeli company activity in the United States. Massachusetts is the only state I know that has done such a study, and not surprisingly, it documented the enormous benefits there in terms of capital investment, tax collections, and job creation. After all, Boston—one of our nation’s top cities—is widely known to be a magnet for Israeli companies along with New York and and the Bay area.
If a national study were to be commissioned, I’m sure we would also find Israel-based economic activity and benefits accruing to smaller cities currently not on the Israeli radar screen. Akron, Ohio has done a great job of attracting interest in Israel, and Savannah, Georgia would be one of those places already benefiting from and with enormous potential for even more business development with Israel.
Why Savannah? And what can other small U.S. cities learn from their experience?
Full disclosure: In 1979, I started my chamber of commerce professional career in Savannah, and having retired a year ago as president of the Atlanta-based American-Israel Chamber of Commerce, Southeast Region, now known as Conexx—America Israel Business Connector, I am moving back to Savannah to enjoy the next phase of our life. So I have a natural interest in promoting one of America’s favorite and most beautiful small cities and sharing why Savannah is a prime location for Israeli companies.
Logically, the Israeli business activity in Savannah parallels the local economic drivers. As one of the major shipping areas in the United States, it is the fastest growing east coast port for container traffic. ZIM–Israel’s national shipping line–has been one of the top customers of the Georgia Ports Authority for over 30 years. According to Brian Black, VP for ZIM’s South Atlantic District, “Savannah’s port continues to be very important to ZIM where we are currently the third or fourth largest carrier. On the east coast, Savannah is second only to New York as ZIM’s most important port.”
Aerospace is a key sector, and the long time joint venture of Savannah-based Gulfstream Aerospace and Ben-Gurion Airport-based Israel Aerospace Industries exemplifies the beneficial synergies. Beginning in 1999, the two companies have collaborated on producing small jet planes primarily for business but including some military use. Starting with the Galaxy that was acquired by Gulfstream from IAI in 2001 and renamed the G200, the two companies since 2011 have jointly produced the G280 super mid-sized business jet where Gulfstream holds the design certificate and IAI the production certificate. IAI builds the fuselage, empennage and landing gear in Israel, and assembly is done by Gulfstream in the U.S.
Manufacturing has been another important economic driver in Savannah, particularly where the port is an advantage. Two recent announcements by Israeli manufacturers are eagerly anticipated by economic developers, governments, employees, and the local Jewish community.
Sdot Yam-based Caesarstone is investing up to $100 million to build a manufacturing plant in nearby Richmond Hill, Georgia that will employ 180 people and be operational in early 2015. Caesarstone makes engineered quartz surfaces that are used as countertops, vanities, wall cladding floors, and other interior surfaces. Among their new employees are 16 Israeli families (total of 46 new Israelis including their children). According Adam Solander, executive director of the Savannah Jewish Federation and Jewish Educational Alliance, their arrival will be “transformative” for the local Jewish community that cares about Israel but is not as knowledgeable as it should be. The December 21st annual Chanukah torch run will be celebrated this year in their honor as a way to welcome the new Israeli families to the community.
During last June’s state trade mission to Israel led by Georgia Governor Nathan Deal, the Haifa Group, a leading global supplier of potassium nitrate for agriculture and industry, announced plans to build a new Controlled Release Fertilizer plant in Savannah. The project represents a $12 million investment that will create nearly 30 jobs, and the groundbreaking ceremony was held in September. Expected to become operational by the first quarter of 2015, the facility will enable Haifa Group to effectively serve the North American market, bringing both production capabilities and the supply chain closer to its business partners.
Renée Rosenheck, senior project manager for the Georgia Department of Economic Development, was the lead staff professional on both projects. She points out that 2014 marks the 20th year of Georgia’s representation in Israel. In the past, the department’s focus has been on exports to Israel, but now it is more on foreign direct investment (FDI) prospects, specifically manufacturing and kibbutz companies such as Caesarstone.
Along with the state’s representative in Israel, Ronen Kenan, who contacts these prospects on a regular basis, the department has sent several key staff executives to Israel in the last year, and Renée visits Israel at least twice annually. Israel is one of the department’s key markets for 2015, and in addition to Haifa Group and Caesarstone, the department also landed innoBots in Gainesville, Georgia. Rosenheck enjoys her role as the GDEcD’s primary leader for Israel projects, working closely with Ronen and Conexx, and feels her facility in Hebrew and understanding of the Israeli culture has been an important asset. “This year, Georgia was recognized as the #1 state for business by CNBC and Site Selection magazine. The Israelis are seeing potential in Georgia, and appreciate the ongoing support they receive from the state. There are currently a handful of Israeli manufacturing prospects in plastics, food processing, and headquarters,” she says.
Renée also sees Israeli Logistics technology companies as a good fit for the Savannah area. Conexx and the Israel Economic Office to the U.S. South have partnered with the Georgia Department of Economic Development for the past two years on bringing delegations of Israeli companies to the Georgia Logistics Summit with side trips to Savannah to meet with the Georgia Ports Authority and logistics companies there as well as the Home Depot, UPS, and The Coca-Cola Company among others located in Atlanta.
The City of Savannah government and the area’s economic development agency SEDA are also keen to promote and nurture business activity with Israel. Mayor Edna Jackson is a particularly outspoken advocate, citing her close interaction with the Jewish community as an inspiration. Jews have been an integral part of Savannah since 1733 when the British colony of Georgia was founded there by General Oglethorpe. During the civil rights movement, the Savannah Jewish community was at the forefront with African Americans in leading and lending their support, and Jewish merchants on West Broad Street (now MLK Boulevard) hired blacks in their stores. “They understood that we had to be a diverse community”, says the mayor.
In 2012, the Savannah Jewish Federation continued this long time collaboration and leadership by underwriting the flights for Mayor Jackson’s trip to Israel where she attended an international conference of mayors. This 10-day visit, also strongly supported by the Consulate General of Israel to the Southeast, gave the mayor an opportunity to see the country in unique ways beyond what the other mayors experienced. In Jerusalem, she visited Bezalel Academy of Arts & Design and met with former MK Yuli Tamir, the art school’s president. Dr. Tamir reciprocated by coming to Savannah to visit Savannah College of Art & Design, the world’s largest private art college, and some exchanges between the two schools have resulted. Mayor Jackson and local economic developers see the potential for leveraging SCAD’s leadership in Digital Media as a way to attract Israeli start-ups seeking to penetrate the U.S. market.
While Savannah is already benefitting by the Israel economic relationship, I believe the best is yet to come. The lesson for other small U.S. cities is to leverage their natural strengths and make connections for Israeli companies with their most important economic drivers. They will find willing partners in their state economic development agencies and regional organizations such as the America-Israel chambers, the Israeli Consulates, and Israel Economic missions. If they follow this game plan, we may find in the next 10 years that the powerful impact of Israeli economic activity will have spread throughout the United States and not be concentrated in just a few major cities.