For the first time in Israel, the Ministry of Economy and Industry, through the Investment Authority and the Strategy Division, led a solution to a significant challenge in the field of startups – the “valley of death” – the intermediate stage between a startup and establishing a factory. In this framework, a new route was recently published to assist in the establishment of a center that will serve as an infrastructure for the production of innovative products in the field of food-tech. In this way, a response will be given to every startup in the field that is in the micro-industry stage and is required to produce initial and experimental products, before moving to the establishment of a factory.
The Investment Authority committee approved an investment plan of NIS 90 million, which includes investments in the establishment of a building, infrastructure and equipment for industrial production in the food-tech field. This program is a collaboration between the Sun Hi-Tech Company and the Margalit Start-Up City Fund. The amount of the grant approved for this program is 27 million NIS in the budget of the Investment Authority in the Ministry of Economy and Industry.
In the first phase, the activity of the partnership will be carried out in a rented building in the city of Kiryat Shmona, in order to provide an immediate response to the companies active in the field in the region. At the same time, an industrial building will be built with an area of approximately 3,000 square meters, which will be able to provide a flexible response to the diverse production needs of the companies.
The winning partners recognized that in the last two years there has been an increase in the demand of the companies in the food-tech industry for an initial scale-up. Answering this need will allow the food-tech companies to reach as quickly as possible the production of samples and even initial commercial production, when today, companies at this stage are forced to leave the northern region to other regions of the country where it is possible to advance at this stage, and thus the north lost many companies, or in many other cases, to go into production First abroad, which caused many companies to move to the production stage outside of Israel.
to give the infrastructure
From a study by the Strategy and Policy Planning Division at the Ministry of Economy, it emerged that there are barriers that prevent the startup development process (testing, model creation, approvals, etc.) and its arrival, at the end of the process, to the establishment of factories in Israel. One of the significant barriers is the lack of a production infrastructure supporting the innovative ventures in the food industry, which should actually provide primary industrial production services to the entrepreneurs.
Food-tech is a branch that deals with interfaces between food and advanced technological processes at the various stages of the food value chain. Israel is a world leader when it comes to research and development of advanced solutions and food products, but the significant potential – the establishment of factories and actual production in Israel – has not been manifested.
There are currently over 200 startups in the food-tech field in Israel, of which few have moved to the stage of commercial production and establishment of factories, some have moved to this stage outside of Israel. Among those who succeeded, we can mention Redifine Meat, Rimelik and others.
In recent years, Kiryat Shmona has become a significant center in the field of foodtech, advanced manufacturing and many other investments. Thus, over the past 5 years, the Investment Authority has approved 14 aid programs in the city that promoted investment in human capital, development of production infrastructure, reduction of pollutant emissions and construction of apartments for rent, with an investment amount of close to NIS 184 million and in terms of grants over NIS 35.7 million. Now, in the new aid track, as mentioned, the authority allocates up to 27 million additional shekels for the establishment of the production infrastructure in the field of food-tech within the city limits.
Shlomo Atias, Director of the Investment Authority: “We see impressive growth in the foodtech sector and are happy to give additional support and assistance to entrepreneurs who have chosen to establish a manufacturing infrastructure in the city of Kiryat Shmona. Creating the right ecosystem, investing in more innovative initiatives and establishing advanced production infrastructures will strengthen both the food industry and Kiryat Shmona – and especially the Israeli economy.”
Michal Fink, Vice President of Strategy and Policy Planning at the Ministry of Economy and Industry: “The new grant is another step in the implementation of the multi-year plan for the city of Kiryat Shmona and the Galilee, and part of the foodtech cluster established in Kiryat Shmona by a partnership of the Ministry of Economy and Industry alongside entities and authorities in the region. Together with an accelerator, a startup incubator, the food institute that is being established these days, the industrial park and other tools, the aggregate goal of which is to realize the economic potential of the Galilee and the State of Israel in the growth of the foodtech industry, from innovative ideas to micro-industry and the production of products and the establishment of complete companies, on the way to sustainable inclusive growth “.