Inside Israel's Industrial Backbone: Chemicals, Energy, Shipping, and the Conglomerate Layer

Inside Israel's Industrial Backbone

Israeli technology accounts for roughly one-fifth of Israeli GDP, per Central Bureau of Statistics aggregate data. The remainder is the broader real economy, and it receives a fraction of the structured English-language coverage.

Per CBS data, total Israeli GDP reached roughly $550 billion in 2024. Manufacturing contributed in the range of 11%; construction roughly 5%; financial services roughly 6%; trade and accommodation roughly 9%; transport, storage, and communications roughly 6%; and the broader services sector roughly 30%, alongside the technology sector and government. The composition reflects a more diversified industrial and services base than Israel's technology reputation alone would imply.

The chemicals and resources layer

ICL Group (NYSE: ICL; TASE: ICL) is the major globally significant Israeli chemicals producer. Per company filings, ICL operates as one of the world's larger potash and bromine producers, with operations spanning the Dead Sea works, European phosphate and specialty fertilizers operations, and global specialty operations. The company is majority-owned by Israel Corporation (TASE: ILCO).

Bazan Group (TASE: ORL), formerly Oil Refineries Ltd., operates the Haifa refinery and is a major participant in the Israeli energy distribution sector. The Dead Sea mineral extraction economy — long-anchored by ICL and a network of specialty producers — operates as a highly specialized mineral extraction economy tied to the geological characteristics of the Dead Sea basin.

Frutarom — acquired by International Flavors & Fragrances in 2018 for approximately $7.1 billion in one of the larger Israeli food-and-flavor transactions of the post-2010 period — operated as a specialty flavors and ingredients producer with substantial Israeli R&D operations that continue under IFF ownership.

The energy layer

The 2010 Tamar discovery (proven reserves estimated at more than 10 trillion cubic feet) and the 2013 Leviathan discovery (proven reserves estimated at more than 22 trillion cubic feet) restructured the Israeli energy economy. The Karish field, operated by Energean, added further capacity in 2022.

Combined Israeli proven natural gas reserves are generally estimated at more than 35 trillion cubic feet across Tamar, Leviathan, and adjacent fields. Per Israeli Ministry of Energy data, natural gas now meets the majority of Israeli electricity generation requirements, with coal-fired generation continuing to decline under Israel's long-term electricity transition plans.

Cross-border gas commerce. The 2018 cross-border pipeline agreement enabled Israeli natural gas exports to Egypt; subsequent expansions and the 2020-2025 Israeli-Jordanian gas supply arrangement extended Eastern Mediterranean gas commerce significantly. Per Ministry of Energy data, natural gas export revenues reached in the range of several billion dollars annually through 2024-2025.

Major operators. Chevron became the lead operator at Tamar and Leviathan following its 2020 acquisition of Noble Energy. Delek Drilling, Ratio Oil Exploration, and NewMed Energy (the renamed and restructured Delek-affiliated upstream entity) operate alongside as Israeli-domiciled equity participants.

Downstream. Israel Electric Corporation (IEC), the state-owned electricity utility that historically dominated generation and distribution, anchors generation, transmission, and distribution. Private independent power producers (IPPs) and the growing renewable sector — primarily solar — operate alongside under the regulatory architecture managed by the Electricity Authority.

The shipping and ports layer

ZIM Integrated Shipping Services (NYSE: ZIM) operates as one of the larger global container shipping carriers. Per company SEC filings, ZIM produced substantial 2021-2022 results during the post-pandemic shipping cycle — at peak, the company achieved 2021 net income exceeding $4.6 billion — before freight rates and earnings normalized through 2023-2024.

The Israeli port system handles substantial regional and global throughput. Haifa Port, privatized in 2021 to the Adani-Gadot consortium for approximately $1.18 billion, anchors the northern port economy. Ashdod Port anchors the southern. Eilat operates the Red Sea-Mediterranean trans-shipment link. The privately operated Bay Port (operated by SIPG-led consortium) and South Port have introduced competitive port capacity that substantially restructured the Israeli maritime logistics architecture from 2021 onward.

The food and beverage layer

Strauss Group (TASE: STRS) anchors the major Israeli food-and-beverage company position, with operations spanning coffee (the largest Israeli coffee position globally, including the Strauss Coffee international portfolio), dairy, prepared foods, water (the Strauss Water filtration position), and the broader portfolio. Annual revenue operates in the multi-billion-shekel range.

Osem-Nestlé operates the major Israeli prepared-foods position, majority-owned by Nestlé. Tnuva, privately held following Bright Food's 2014 acquisition and the 2021 management restructuring, operates the dominant Israeli dairy position with major market share in fluid milk and dairy products.

Tempo Beverages anchors the major Israeli beverage distribution position; the company holds long-standing distribution rights for major international brands alongside Israeli domestic brands.

The retail and consumer layer

Major Israeli retail chains operate at significant scale. Shufersal (TASE: SAE) operates as the largest Israeli food retailer by market share. Rami Levy (TASE: RMLI) operates the discount-focused major chain. Yochananof, Victory, and Mega anchor additional positions. Fashion retail concentrates around Fox Group, Castro-Hoodies, Golf, Renuar, and several others. The Israeli home and office retail segment is anchored by Home Center, Office Depot Israel, and IKEA Israel (operated locally under franchise structure).

The construction and real estate layer

Construction and real estate intersect with the trophy real estate dynamics covered in The Olam's Real Estate cluster, but the broader sector operates at substantially larger scale than the trophy tier alone.

Major publicly listed and major privately held construction companies include Shikun & Binui (TASE: SKBN), Ashtrom Group (TASE: ASGR), Electra Group (TASE: ELTR; broader portfolio extending beyond construction), Tidhar Group (privately held), Aviv & Co. (privately held), and Africa Israel Investments. The Tel Aviv Light Rail Red Line operational launch in 2023 and the substantial broader Tel Aviv Metro architecture (committed at $80+ billion over 20 years, covered separately in The Olam's broader infrastructure coverage) anchor the major civil-engineering procurement environment.

The banking sector

Five major Israeli banks anchor the domestic banking system. Combined Israeli banking sector assets exceed ₪2 trillion per Bank of Israel data.

• Bank Leumi (TASE: LUMI): one of the two largest Israeli banks by asset base
• Bank Hapoalim (TASE: POLI): operating alongside Leumi as one of the two largest banks in the system
• Mizrahi-Tefahot Bank (TASE: MZTF): third-largest, with the strongest historical mortgage market position
• Bank Discount (TASE: DSCT): fourth-largest, with substantial US operations through Israel Discount Bank of New York
• First International Bank of Israel (TASE: FIBI): fifth-largest, with the strongest private-banking concentration

The sector operates under Bank of Israel banking supervision. The Capital Market, Insurance and Savings Authority (CMISA) supervises the broader financial-services regulatory environment, including insurance, pensions, and provident funds. The Israel Securities Authority regulates capital markets.

The diversified conglomerate layer

A meaningful component of the Israeli industrial economy operates through diversified holding company structures.

Israel Corporation (TASE: ILCO) operates as one of the major publicly listed Israeli conglomerate structures, with substantial positions in ICL Group, Bazan, and the broader portfolio. The Idan Ofer-controlled entity is publicly disclosed in TASE filings.

Delek Group (TASE: DLEKG) operates as a major diversified entity, including historical and current positions across energy, fuel distribution, insurance, and infrastructure assets. Yitzhak Tshuva is the controlling shareholder.

Discount Investment Corporation, historically one of the larger Israeli conglomerate structures, has been substantially restructured through 2020-2024 following the financial difficulties at parent IDB Holdings. The Property and Building Corp., Cellcom Israel, and Shufersal exposures have been allocated through the restructuring process.

Several additional diversified holding structures operate alongside, including the publicly disclosed Azrieli Group (TASE: AZRG; major shopping center, office, and broader real estate position, alongside data center and senior housing operations), Property & Building Corporation, and a wider tier of mid-cap diversified positions.

What's next

Three structural dynamics shape the Israeli real economy through the coming years.

First — the natural gas export trajectory. The development of the broader Eastern Mediterranean gas market, the prospective Israeli-Greek-Cypriot subsea pipeline architecture, and the maturing Egyptian and Jordanian export volumes together could materially expand Israeli energy commerce over the coming decade.

Second — port competition and logistics restructuring. The post-privatization Israeli port environment is producing measurable efficiency improvements and cost reductions, with downstream implications for Israeli trade competitiveness.

Third — banking sector dynamics. Sustained low net interest margins, regulatory pressure on fee structures, and the slow growth of the Israeli population base relative to the existing five-bank structure may increase long-term consolidation pressure within the banking sector.

The Olam tracks the real economy as it evolves.

Source data: Israel Central Bureau of Statistics; Bank of Israel; Israel Ministry of Energy; Israel Ministry of Finance; TASE filings for publicly listed companies; SEC filings for US-listed Israeli issuers (ICL, ZIM, Teva, and others); Calcalist, Globes, TheMarker institutional coverage; Reuters and Bloomberg Israel coverage.