Nissan Medical to close Sderot plant

Terrorist rocket attacks, cheaper Asian imports spelled doom

August 9, 2010 05:44
1 minute read.

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Nissan Medical Industries Ltd, a medical-supplies company, said Sunday it will close its factory in Sderot and fire its 100 workers by the end of the year.

“As an industrialist, I make this decision with a heavy heart,” controlling shareholder Hezi Nissan said. “But I am confident that the company’s board of directors made the decision only after it was proven without any doubt that there was no business future in the present format.”

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Nissan Medical Industries makes surgical dressings and bandages out of cotton gauze and non-woven fabrics. It has become an established company in its sector, with growing exports throughout Europe. In Israel, it has maintained a dominant market share supplying medical centers, the army, and private hospitals and pharmacies.

Nissan said the company has incurred losses of more than NIS 10 million over the past four years because of terrorist rocket attacks that resulted in it losing customer orders from abroad.

Repercussions from the global economic crisis and the sharp appreciation of the shekel against the euro have erased the company’s profits from exports, Nissan said.

The decision to close the plant was made after prices for raw materials increased in the second quarter while cheaper imports from Asia entered the market.

In light of price competition and higher costs, keeping the factory open indefinitely would be unsustainable, Nissan said.

Nissan Medical Industries was found in 1984 and has been traded on the Tel Aviv Stock Exchange since 1993.

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