An industrial SOS

The company’s closure would be a bad sign for Israeli business and its burgeoning hi-tech industry.

August 3, 2017 22:28
3 minute read.
haifa ammonia tank

Haifa Chemicals' ammonia tank, Israel's largest ammonia tank, is seen in the Haifa bay area. (photo credit: REUTERS/BAZ RATNER)

Haifa Chemicals, a signature Israeli agro-tech industry and long one of the nation’s most lucrative businesses, has announced plans to shut its fertilizer plants, which would send some 800 employees packing – and by some media accounts, hundreds more.

The decision made by The Trump Group – no relation to the US president – follows a four-year battle to come up with a safe method of storage for the toxic ammonia it requires for production. A huge 10,000 liter tank of the chemical, located at the edge of Haifa, has been justifiably ruled as too hazardous. This is because it puts the lives of hundreds of thousands of citizens at risk in the event of war, natural disaster, or fire.

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Hezbollah leader Hassan Nasrallah drove home the plant’s vulnerability with a February 2016 threat to target it with missile fire, “the result of which would be like a nuclear bomb.” Hezbollah rockets had already struck as far as Haifa in the Second Lebanon War of 2006, with deadly results.

Haifa’s Municipality has been campaigning to dismantle the tank for years, and redoubled those efforts last year after Nasrallah’s remarks. Officials and environmentalists have since then dubbed the huge cement ammonia container as a “ticking time bomb.”

However, as a result of the court order and a lot of ensuing red tape, the owners of Haifa Chemicals face a September 18 deadline to close the giant ammonia tank, which company officials view as a death knell for their firm.

The decision to shut the plants follows failed efforts since April to implement alternative plans to move the ammonia tank to a more sparsely populated site in the Negev or even off-shore – a failure the company blames on regulators and a lack of government assistance.

Jules Trump, the controlling shareholder, told The Jerusalem Post on Wednesday that the company can no longer afford its monthly payroll, hence the choice to close shop.

Employees have responded swiftly and angrily, a bunch of them already barricading themselves inside the factory, camping out on the grounds in pup tents.

The sad scene is all too familiar and emblematic in a country where government has swung from the socialist extreme of propping up businesses for years at great public expense, to a more current government trend of displaying total indifference to the economic needs of its business community or citizens in need.

These may include anyone, from the social welfare case of an elderly Holocaust survivor living in dire conditions or a disabled citizen physically unable to work on full-time. Moreover, the Haifa Chemicals crisis threatens to widen unemployment in the already underdeveloped peripheral parts of the Negev and Galilee.

The move also closely follows recent layoffs of hundreds of personnel at Teva Pharmaceutical Industries. While vastly different businesses, both companies share a prominent status as front-line economic powerhouses. Both are listed on the Dun’s 100 Israeli companies.

Haifa Chemicals does business to the tune of $700 million a year. It has come a long way from its beginnings as a government-owned company in the late 1960s to a private international firm, its unique fertilizing technology a veritable fulfillment of the goals of Zionism.

The company’s closure would be a bad sign for Israeli business and its burgeoning hi-tech industry. It is high time Prime Minister Benjamin Netanyahu’s government display more involvement in solving such problems before such issues become full blown crises.

Haifa Chemicals needs to be rescued – not only for its own sake but also to set an example, and to stave off the risk that its closure could set off a chain reaction that kills other Israeli industries, even hi-tech startups, as well.

What kind of message would Israel be sending its business community if it fails to respond for months to entreaties for assistance from a flagship industry? The Histadrut is already threatening massive strikes in response to the layoffs at Haifa Chemicals. Who knows what further labor unrest is in store? The government should take steps before the court-ordered deadline to move the ammonia tank and to ensure that the firm survives.

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