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As popular legend would have it, the founding of Israel's ostrich industry was a cloak-and-dagger affair. In 1982, the story goes, an Israeli made the trip to South Africa, the world's largest ostrich producer, and smuggled some eggs back into Israel.

The real story, however, is a little dull. True, the industry was founded when an Israeli brought back eggs from South Africa, but there was nothing illegal involved.

Fabricated though the story is, it imparts an important message: A potent mixture of Israeli chutzpah and initiative helped create what has turned into a highly successful industry within a very short time.

In less than 15 years, Israel has become the world's second largest producer of ostriches after South Africa and a leading pioneer in the field. Admittedly, compared to South Africa, which slaughters 200,000 ostriches a year for skins and meat, Israel, which killed 14,000 in 1996, seems to have its head buried in the sand. But Israel only began slaughtering birds in 1991.

There are now only two Israeli companies selling ostrich meat and skin commercially on the international market. These are the Israel Ostrich Company Ltd. (Os.Co.) in Ofakim and Zemach Ostriches Ltd. on the shores of the Sea of Galilee. Zemach is the largest.

Os.Co., the recipient of those South African eggs, was the first company to begin farming ostriches.

In 1984, Kibbutz Haon bought chicks from Os.Co. and set up a farm as a tourist attraction. Owners soon recognized the business potential; two years later Haon approached nine other kibbutzim in the area and together they set up a new company, Zemach.

In the early days of the Israeli ostrich industry, there was little information available on ostrich farming. There was also no possibility of cooperation with South Africa.

"Later on, when things opened up, we found South Africa couldn't help us anyway," says Yaakov Or, director of Zemach Ostriches. "They farm extensively, not intensively like us, and conditions are totally different. In South Africa, everything is based on cheap labor. We don't have that advantage. We taught ourselves."

It was a difficult process. When the farm first opened, only 60 percent of fertile eggs survived. Today, with the help of a computerized breeding facility, some 80 percent survive at Zemach.

Zemach has focused its efforts on two areas: skin and meat. Some 70 percent of a bird's total worth comes from its skin, which is used by high-fashion design houses. A small ostrich-skin handbag, for example, will cost more than $4,000.

In the field of meat, Zemach has helped revolutionize the industry. For years, South Africa considered ostrich meat merely a byproduct of the skins and sold it cheaply. Israeli researchers discovered, however, that unlike red meat, which ostrich meat closely resembles in taste and texture, ostrich is extremely low in fat and cholesterol.

Demand has grown quickly, particularly in Europe where Israel has now cornered 17 percent of the ostrich meat market.

Zemach, which employs 50 people, brought in sales of $6 million in 1996 and an estimated $8 million for 1997

Aside from some 20 restaurants in Israel that offer ostrich meat on their menus, all the meat and skin produced in Israel is for export. "The price is better abroad and ostrich isn't kashrut so we didn't want to fight with anyone," says Or.