Israeli water companies shoot for world market

By Ari Rabinovitch

JERUSALEM (Reuters) - After decades of developing water technologies aiming to "make the desert bloom", Israel has shifted focus to selling its products abroad with a goal of doubling exports in the sector to $2 billion by 2010.

From ultra-violet light technology to purify water to a recycling system using millions of small, plastic rings to breed bacteria and break down organic waste, Israeli innovations are finding buyers abroad. If a United Nations goal of improving sanitation by 2015 is to be achieved, the global market would be worth about $10 billion a year.

Daniel Wild, senior analyst at Zurich-based Sustainable Asset Management (SAM), an independent asset management group managing 8.5 billion Swiss francs ($8.3 billion) in assets, said Israeli technology is leading in two main segments -- irrigation and desalination -- because it was one of the first countries to develop efficient technologies.

"When it comes to water scarcity, Israel had to have a closer look very early," Wild said.

About two-thirds of Israel is desert, spurring it to become one of the world's leaders in water recycling. Seventy-five percent of waste water in Israel is re-used, mostly for agriculture, said Oded Distell, director of international investments at the Industry and Trade Ministry.

Soon after Israel's first prime minister, David Ben-Gurion, declared in the 1950s that the future of the Jewish state depended on "making the desert bloom", engineer Simcha Blass teamed up with a kibbutz farming collective in the Negev desert to form Netafim, a company that introduced to the world a water-sparing process known as drip irrigation.

Blass invented the system after he noticed a row of bushes in a field with one plant growing taller than the others. He found that a leaky underground pipe was accidentally supplying water to that one plant but not to others.

Today, Netafim has more than $450 million in annual sales, mostly exports. One of its newest products, a wireless crop monitoring system, uses underground sensors and radios to direct the right amount of water to each section of a field.