Kibbutz companies hit record, general industry lags

Sales generated by the 265 kibbutz factories rose by 9.4% in 2006 to NIS 27.2b.

September 11, 2007 08:02
2 minute read.
kibbutz biz 88 224

kibbutz biz 88 224. (photo credit: Courtesy photo)

The kibbutz and regional industry factories on Monday reported record sales of NIS 32.3 billion in 2006 on the back of strong growth in export sales while at the same time the country's general industrial sector growth reported tepid growth in the 5767 lunar year. According to figures collated by the economics division of the Kibbutz Industries Association, sales generated by the 265 kibbutz factories rose by 9.4 percent in 2006 to NIS 27.2b., of which 59% were exports. Sales from exports rose 14% during the same period. The majority of activity of about NIS 13b. was generated by the 25 largest corporations, which boasted revenues of over NIS 250 million in 2006. In addition the nine factories in the regional industry had sales of NIS 5.1b. At the same, operating profits increased by 15% to NIS 2.5b. The leading sectors in the kibbutz industry in 2006, which make up 73% of the total activity, were the plastics and rubber industry, which generated NIS 11.9b. in sales; the food industry with NIS 4.8b. in sales; and the metals industry with NIS 3.4b. in sales. In 2006, activity in the food, electronics, construction materials and glass sectors rose by over 10%. The Kibbutz Industries Association noted that the kibbutz industry employed 40,000 workers mainly located for production in the periphery. Meanwhile, as lunar year 5767 draws to a close, the Manufacturers Association of Israel reported that despite a year in which the country's industries produced $73.5 billion worth of sales as well as hired 14,000 new workers, economic growth in the industrial sector only reached 2.5% above last year's numbers, compared with growth of 9.5% last year and 4% two years ago. "Our challenge for the next year is to find a path to quick growth," said Robbie Ginel, the director of the economic branch of the Association. "We need to make a concentrated effort this year [5768] to improve the ability of Israeli manufacturers to be competitive and to help the local industry to continue to increase exports and to introduce their products into new markets." Ginel attributes the pace of growth this year to the slow - only 2% - growth in the hi-tech industries, a sector upon which the Israeli economy is notoriously dependent. According to numbers released by the Manufacturers, sales of total exports rose 12% to 31.8b. and the 14,000 new hirings represented growth of 4% in the country's manufacturing work force, bringing the total to 365,000. Last year, the industrial work force increased only 3%. Meanwhile, Uriel Lynn, president of the Federation of Israeli Chambers of Commerce told The Jerusalem Post that manufacturers must stop thinking of their sector as the beginning and end of the country's business sector. "Some industrialists think that if they have a good year, then it must mean that the entire Israeli economy is doing well - this isn't so. They don't realize that 64% of the economy is based on trade and services and that in the last three years over 243,000 new jobs have been created, with only a small portion coming from the manufacturing sector." Lynn, speaking at a gathering of various industry and economic leaders earlier this week, said that in order for the economy of Israel to continue to strengthen itself, priority must be given to the trade and services sectors, as they generate and dictate a majority of the country's economy.

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