Ophir Optronics continues on growth path

Laser and thermal imaging manufacturer Ophir Optronics is on the expansion trail. With subsidiaries established in the United States, Germany, Japan and Israel, the company is ready to make further acquisitions, Ophir co-founder Ya'acov Zerem told The Jerusalem Post.

"We are seriously looking to make a purchase which will add new markets to our portfolio of services," Zerem said. "Our philosophy has always been not to base our business on a narrow line of products; to avoid risk through diversification."

Zerem puts down his glass and smiles. Almost 27 years later, his company is showing annual turnover of $26m. after years of slow but steady growth. "I didn't meet [the goal] precisely, but I was close," the former physics instructor says. For this reason, he added, Ophir is looking again to bring in new products and possibly enter new markets.

The Jerusalem-based company is also planning to increase its employee base. Having added 22 employees between September and March, Zerem said that by the end of the year it will have reached a global work force of 300, from the 250 it currently employs.

With its diversification evident in its product line, Ophir technology is used in the military sphere in applications including fire control systems, night- vision goggles and border patrol equipment.

Its non-military applications range from use in fire fighting, driver vision enhancement and facility protection, to SARS detectors and Unmanned Aerial Vehicles.

Founded in 1976, Ophir today operates in three lines of business including Laser and Photonics measurement, precision IR Optics, and 3D Non-Contact Measurements, all which contributed to a revenue growth of 26 percent in 2004 totalling NIS 154 million.

The sales increase helped move the company back into the black with a profit of NIS 9.2m. for the year, after recording a net loss of NIS 2.5m. in 2003.

While the 2003 loss came mainly as a result of expenses related to the establishment of its lens manufacturing facility in Massachusetts that year, Zerem said that the move was necessary in order to retain eligibility for US foreign aid programs, which require militaries to spend their defense grants within the country.

"Because their were no companies that suited our criteria for acquisition at the time, we had to start the plant from scratch," he explained, "but we see now that the facility is starting to bear fruit through orders we have received from the US military."

The company's focus on penetrating the US military market was a natural progression however, since, from its inception, Ophir has catered for the defense and security industries. Using its product applications for the IDF as a basis, the company grew into applications for the other markets in which it is active today, including the medical, telecom, industrial and scientific fields.

"It was the military's high level of requirements that enabled us later to develop the complete line of products that we now sell to the civilian sector," Zerem said. "The military's driving us to develop state-of-the-art equipment technology forced us to improve our R&D and production standards."

For Zerem, the company has moved at a healthy pace through the years, characterized by patience and caution, and has made key decisions which proved beneficial to the company.

Operating in combined markets valued at $1 billion and which are growing at a rate of 15% annually, Ophir made a decision six years ago, to change its strategy to penetrate the CO2 Optics and lens markets, to take full advantage of its flagship optics line.

Having seen significant success as a result, Zerem said that he is confident that Ophir will continue to increase its market share in both

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