Magal Security Systems receives $45 million in contracts

Published 31 January 2008

Israeli smart-fencing company receives contracts from several U.S. critical infrastructure operators; recent developments along the Gaza-Stip-Egypt border offer Magal new opportunities

Israeli company Magal Security Systems (NASDAQ GM: MAGS; TASE: MAGS) recently received a series of orders totaling approximately $45 million for a turnkey project to protect critical infrastructure facilities. The turnkey project incorporates fence perimeter protection systems, access control systems, and CCTV products. Magal’s management says it expects to recognize income from these orders over the next two years. Izhar Dekel, CEO of Magal, commented, “We are very pleased to report these substantial orders, providing us with a great start to 2008. The orders are an important milestone in the implementation of our growth strategy, which emphasizes the provision of turnkey solutions as a major growth driver. The project, which is for the protection of critical infrastructure, demonstrates once again our ability and strong experience in protecting these types of sites.”

Here is a thought: The Hamas faction now controls the Gaza Strip, and forces allied with it last week breached the border fence between the strip and Egypt in several places, allowing uncontrolled movement of people and vehicles in and out of the strip. There are two risks here for Israel: The first, more general threat is the Iranian intelligence operatives, Hezbollah fighters, and al Qaeda terrorists can now more freely enter to Gaza Strip to help Hamas in its war against Israel; the second, more specific threat is the terrorists from the strip would now be able to go into Egypt and then enter Israel through the long, and largely unguarded, Egyptian-Israeli border along the Negev desert (see map).

This brings it to Magal: In Israel they are already talking about building a defensive barrier system along the Egyptian-Israeli border — a system similar to the one being built along Israel’s border with the West Bank. Magal is involved in the latter, and would likely be involved in the former.