PA manufacturers, kibbutz industries talk cooperation

Despite posting sales of NIS 27 billion in 2004, kibbutz representatives at Tuesday's meeting said the PA market potential remains largely untapped.

A historic gathering was held in a dimly lit room in the back of an east Jerusalem hotel on Tuesday as representatives from various kibbutz industries met Palestinian manufacturers in an effort to increase economic cooperation between the two sides. "Despite the geographical proximity between Israel and the Palestinian Authority, the two are very distant from each other in relation to economic cooperation," said Dr. Bassim Subhi Khoury, chairman of the Palestinian Federation of Industries. The meeting, a joint venture between Khoury and Amos Rabin, CEO of Kibbutz Industries Association, was hatched as a conduit through which Israeli and Palestinian manufacturers could get to know one another and possibly generate business or marketing ideas. "If nothing comes out of this meeting other than the exchanging of telephone numbers, then I will still classify it as a success," said Khoury. According to Rabin, Israel's kibbutz population comprises only two percent of the country's total population, yet its industries account for 10% of the total output of Israeli industry, while the plastics and rubber sectors of the kibbutz industries comprise more than 50% of the total Israeli production in these sectors. Exports from kibbutzim, said Rabin, make up more than 9% of the country's total exports (excluding diamonds), while the approximately 40,000 kibbutz industry employees represent 10% of the total number of Israel's workers in industry. Despite posting sales of NIS 27 billion in 2004, kibbutz representatives at Tuesday's meeting said the PA market potential remains largely untapped. "If we can establish customers or suppliers on the other side, we can definitely increase our business and we can help each other expand into some of the Gulf countries," said Shmuel Kritzer of Kibbutz Erez. Erez, which manufactures thermoplastic membranes for inflatable rescue equipment, had a turnover of some NIS 65 million last year. This sentiment was shared by Michel Knigsfeld, a representative from the brush company Hamivreshet. "We have sales of NIS 40m. a year, with 40% of our products going towards exports, but we had customers in the Gaza Strip that we lost and we have not succeeded in getting customers in the West Bank. We hope this meeting will allow us to establish customers in that area." Khoury, who is also the chairman of the Pharmica pharmaceutical company, reported that the vast majority, some 90%, of Palestinian industries are "micro-industries," employing 10 or fewer workers, while the other 10% are what can be classified as medium-sized industries. Despite their small size, however, he said, Palestinian industries overall contribute approximately 15% ($600m.) to the PA GDP a year, a number that could rise significantly through an increase in economic cooperation between Palestinian and Israeli industries. "I am firm believer in cooperation as the benefits would be great for both sides," he said. Amid the excited talk of increased economic cooperation between Israel and the PA, however, the harsh reality of the current security situation was brought to light by Rizkalla Emad, the manager of Rizk Alla Ltd. Greenhouses. "Before we can begin to think about cooperating, what everyone needs to realize is that for Palestinian businessmen, moving their goods out of the territories and into Israel is a daily struggle. There are certain checkpoints that are only open to the passage of our products two or three times a month - this needs to change before we can truly begin working together," he said. The meeting ended on a high-note, though, as participants promised that this would be the first of subsequent meetings Israeli and PA manufacturers will hold. "Let's build on this and do something with it," said Khoury.