United World
Israel's 60th anniversary is approaching this coming May. Today Israel is known for its entrepreneurship, innovation high concentration of start-ups, thus forging a new future for the country as a center for rich new ideas. As a man who has transitioned from the military to entrepreneurship in Israel, what does anniversary symbolize to you?

Mr. Giora Inbar

As an Israeli who spent most of his adult life in uniform serving the security needs of Israel and as the CEO of KMN Holdings, I feel very proud celebrating our 60th anniversary.
Israel, contrary to the Middle East region, is a vital democracy that has succeeded in transforming a desert into a prosperous economy with hi-tech companies, many R&D centers that provide innovative technologies and products for computers, electronics system, agriculture and many more technologies and products that are utilized all over the world.
In addition, Israel has very strong financial institutions and a strong Stock Exchange market.

Although, we are forced to live in a hostile environment Israel understands the need for providing our neighbors with a chance for a normal sense of life. I believe that this should remain our goal for years to come and I am proud that Israel is striving to proceed in this direction. Israel has succeeded in signing peace agreements and has achieved normal relations with Egypt and Jordan. We are following this line of thought and hopefully in the future, we'll achieve some results with the Palestinian and the Syrian nations as well. When everyone enjoys prosperity, people behave normally and focus on preserving this way of life instead of inflicting damage and pain.

Another issue that is symbolic of the great achievements that Israel reached in her 60th anniversary is that in the last decade or so, the Israeli economy has succeeded in becoming global. Government regulations have been amended to suit international business needs (although, always there is room for further improvements in the regulations aspects). These regulations enable our economy to go global without difficulty. Today, it is not complicated for an Israeli business entity to conduct business worldwide. A good example of the international business expansion of Israeli companies is the international side of KMN Holdings. As a CEO of KMN, I fly every month to visit our companies in the US, China, and Germany. Israel, as a nation that has no natural resources and endures some political issues, understands that one of her strongest qualities is the people / workforce. We have a very capable and devoted workforce. Professionalism, innovating thinking and dedication are a few of the qualities you can find within our workforce. Although we are celebrating our 60th anniversary we are still as motivated as the founders of Israel for success and achievements.

A few examples that make me proud and are a demonstration of our unique business strength are the following business transactions that have taken place in Israel in the last couple of years:

On 2006, Warren Buffet (Berkshire Hathaway) acquired ISCAR which is located in the northern part of Israel near the Lebanese border (the announcement was made on May 06).

In an interview with the Israeli financial daily," The Marker" , Warren Buffett said ;

"We are investing $ 4 billion in an amazing band of people from Israel,"

Another example is the decision made by INTEL to invest in a new Semiconductor Foundry in a location next to the Gaza Strip. This current investment is much greater then the previous investments that have been made by INTEL in Israel in the past, emphasizing INTEL's confidence in the state of Israel and the people of Israel.

Last, on a personal note, in the middle of the second Lebanon war during July 2006 Shamrock Holdings which is own by the Disney family, invested in one of KMN's companies. At that time, I asked them why they chose to invest in an unstable place such as Israel, they answered that in Israel, there are management teams that they trust will give them the right results they would like to see.

These examples above of Warren Buffet (Berkshire Hathaway), INTEL and Shamrock Holdings clearly emphasis my thoughts on Israel as a whole and the Israeli workforce in particular.

United World
Despite global economic trends today on the decline, Israel's economy continues to hold strong. FDI top $10 billion last year. Companies like Intel, for example, continue to invest further in Israel demonstrating their confidence in the market. In your opinion why is Israel just a great investment destination?

Mr. Giora Inbar

As we discussed before, I believe that the main strength of Israel resides in its workforce.
If you explore the number of international firms that have R&D centers and production sites in Israel, you'll find that most of the leading companies worldwide have some kind of presence in Israel. This is simply due to the creative way of thinking, the management skills and the loyalty of the Israeli workforce. In Israel, the business pace is the same as the general pace and it is different then any other places in the world. The combination of this pace with the level of education, the unique people and the creative way of thinking, give a dynamic place for international investments.

United World
KMN Holdings has a widespread portfolio of investment across the Trade Industry, Retail, Real Estate, Technology…exemplifying the age old "Don't put all your eggs in one basket". As one of the most successful Holdings in Israel, which segment has proven to be the most profitable and successful for KMN? How have you utilized the international network, you mentioned earlier, to your advantage?
Mr. Giora Inbar

You are correct " Don't put all your eggs in one basket" is a valid way of thinking that I am promoting at KMN Holdings.

Regarding profitability, I don't think we should look at KMN Holdings in terms of what is the most profitable segment. As our financial statements strongly demonstrate, KMN Holdings is a very profitable company.

The international network has more to do with having the same business culture. As I mentioned before, we are very comfortable working with individuals that have the same point of views on business as we do and therefore, if we meet an Israeli that runs a company abroad that fits our portfolio, most likely we'll welcome negotiations with him. This is very logical and I think it is no different in other society.

However, we do feel very close to our U.S. colleagues and we truly appreciate the U.S. business arena. Although, currently the U.S. economy is suffering, I am a great believer in the U.S. system, economy and way of life. We have invested in the U.S. in the last few years and we aim to invest more in the U.S. market in the coming years. The U.S. business arena is interesting to us and will always be valuable to our business.

If the owner or management of a company happens to be an Israeli it will be nice. However, this is not a prerequisite. The English language is not a barrier and U.S. companies together with their management teams are always welcome at KMN Holding.

United World
Israel and the USA continue to have strong economic, ties amongst many other mutual interests. In 2006 bilateral trade totaled more $30 billion and the USA continues to be the largest export market for Israel. KMN has a number of investments in the US with Dobson and Frankenstein. How important is the America market for KMN Holding?

Mr. Giora Inbar

The U.S. market is very important for KMN Holdings. We prefer to do business in the U.S. than to sell to new and so called promising markets. We at KMN Holdings prefer to deal with the U.S. market, since we feel very safe with the system. We have learned to understand it and to appreciate it. When you penetrate new developing markets, you meet great opportunities. In terms of profit, there is good chances profitability will "sky rocket" however, there is also the possibility that you may face a very high risks factor as well.
In conclusion, we at KMN Holdings feel comfortable with the U.S. system and their business culture. We have several companies working in different segments of the U.S. market. We are very diversified with our U.S. investments portfolio. Our U.S. portfolio holds very strong firms that have been around for a long time and grow rapidly with the years. We own companies that distribute pipes, industrial valves etc. side by side, with industrial companies who develop and manufacturer products for the aerospace industry. We also own companies that specialize in investments, finance Real-Estate etc.

Due to the strength of the Israeli currency (New Israeli Shekel NIS) against the U.S. dollar, we have been able to acquired few businesses at very attractive cost and we look forward to expend our company portfolio in the U.S. in the near future.
We assess, that due to the subprime mortgage crisis in the U.S. that reflect very strongly on the overall U.S. economy business, in the U.S. may encounter difficulties raising capital from financial institutions. In this case, the financial strength of KMN Holdings will play a role and we'll be able to seek opportunities and acquire more companies.

United World
How do you go about looking for new investors and how do you increase the visibility of KMN Holdings to investors?

Mr. Giora Inbar

Although, KMN Holding is a young company (established on 2004) we rapidly grow in Israel and worldwide. Currently, we own 30 companies which their overall turnover is approx. 3 billion NIS (approx US $ 850 millions).
KMN Holdings is a public company traded in the Tel-Aviv Stock Exchange. Business articles about the company were published many times during the years in leading financial magazines.
During the years we went public with eight of our companies. These IPO's were very successful and generated substantial funding for future activities. At the same time, each IPO has generated a lot of media coverage for KMN Holdings.
With the business exposure that KMN Holdings enjoys, a vast number of investors groups and financial institutions are calling us to look for future opportunities and cooperation.

In addition, throughout our diversified company's portfolio, we have very good relations with many other companies and management figures worldwide. This network of connections provides us with current business information that could possibly result in future business transactions.

United World
As you are well aware, USA TODAY is the Number One newspaper in the United States, 70% of the readers are actually investors themselves. If you had the chance to send out a direct message to the readers of USA TODAY, what would you like to tell to them?

Mr. Giora Inbar

First, I would like to thank them for taking the time to read this interview. Second, I would like to welcome them to get in touch with us if they have any idea for an investment that can fit our business portfolio. We at KMN Holdings are looking for mature companies with tradition, business reputation, a proven track record and a strong management team that will stay on board and run the company for years to come. I can honestly say, that we at KMN simplify the ways of doing business and I guarantee that only good will come out of these relationships for every company that will be open minded and join us.

Looking at the U.S. as a very important market for us, we have decided to open in the near future, an office in the U.S. that will focus on acquiring new businesses that may fit our business portfolio.
Following the same business strategy from day one, of acquiring mature private companies with steady sales and profit and that have a positive cash flow. We are very confident that some of our companies will be listed in the NASDAQ in the near future.

The U.S. and Israel enjoys a very good relationship for many years. I don't think that the state of Israel can possibly find a better friend then the United State and vice versa, the U.S. can't find a better friend than the state of Israel. The same is applicable business wise. We, along with the U.S. share the same business culture and business orientation that can bring our two countries together.

I wish all of us good health and many productive business ventures for years to come.

United World
Thank you very much for taking the time for this interview!