Kibbutz exporters claim currency-related losses, seek assistance

"Loss in revenues from exports is severely damaging the Kibbutzim's profits. Some companies might be forced to halt export production lines if they don't get the assistance needed."

By SHARON WROBEL
November 8, 2007 21:00
1 minute read.

The Kibbutz Industries Association on Thursday urged Finance Minister Ronnie Bar-On to implement the Artzi recommendations to help assist kibbutz exporters, who are estimated to bear a loss of NIS 900 million as a result of the continued weakness of the US currency. "Kibbutz factories and companies are expected to have a loss of NIS 900m. this year because of the weak US dollar," said Yonatan Melamed, chairman of the Kibbutz Industries Association. "The loss in revenues from exports is severely damaging the Kibbutzim's profits and some of the companies might be forced to halt their export production lines if they don't get the assistance needed." On Wednesday, the shekel rose to its highest against the dollar in nine years. Since January 2006, the shekel has appreciated more than 14 percent against the beleaguered dollar. Still, this year, the Kibbutz industry is estimated to generate over NIS 18 billion from export sales, representing an increase of 15% over 2006 levels. About 50% of the volume of exports is denominated in US dollars designated to the US and other countries. The Kibbutz Industries Association is the umbrella organization of more than 300 factories and companies across Israel. The leading sectors in the kibbutz industry are plastic and rubber generating 38% of total sales in the industry, food representing 18% of total sales and metal contributing 14% of total sales. Other sectors include optics and glass, textile and leather, medicine and chemicals, office supplies, quarries and building materials, toys, jewelry and musical instruments. Melamed urged the Finance Ministry to order the immediate implementation of an assistance program for industrial companies formulated by the Artzi Committee, which has presented a set of recommendations regarding measures tailored to assist, in particular, small- and medium-sized manufacturers who were suffering from the shekel-dollar exchange rate. The assistance program, which is budgeted to cost the government NIS 460m., includes a NIS 200m. emergency fund to assist small- and medium-sized companies, advisory services on how to insure against currency risk, a non-governmental fund for currency hedging and doubling credit lines for exports to high-risk markets. On Wednesday, Industry, Trade and Labor Minister Eli Yishai urged the government to swiftly implement the assistance program for industry. Last week, however, Bank of Israel Governor Stanley Fischer said the strong shekel was not hurting export growth.


Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS