Israeli dairies expand overseas

Bat Yam-based Gad Dairies says he was in talks with a US dairy companies.

cow 88 (photo credit: )
cow 88
(photo credit: )
Already enjoying large success at home, two of Israel's leading dairies are undertaking plans to make an international splash. Bat Yam-based Gad Dairies said it was in talks with two unnamed US dairy companies to build a production facility in New Jersey, for an estimated investment of $4 million. Gad - Israel's fourth-largest dairy - specializes in labneh, bulgarit, fresh mozzarella, ricotta, among 70 other products. The US branch of the dairy initially would produce some 20 types of cheeses destined primarily for the country's Jewish and Israeli markets, before extending both the product range and customer base. The facility would produce roughly 300,000 units monthly. Gad made the decision following the success of trial exports over the past six months, according to Gad CEO Ezra Cohen. Separately, Tnuva said the construction of a planned dairy factory in Romania - at an investment of €44m. - was set to begin in August. The facility was expected to begin production in early 2007. Within seven years, sales to Romania's population of 22 million should reach €65m., with the initial facility and its 1,200 cows serving as a basis for the development of local milk sources, Tnuva said. Expected rises in the country's standard of living were seen likely boosting demand for dairy products and creating interest for a wider range of products. The European Bank for Reconstruction and Development (EBRD) has agreed to fund 35 percent of the project. Nonetheless, some within the cooperative remain opposed to the move. "It's a risky adventure," said Ziv Matalon, a dairy farmer for Tnuva. "In a period of change, it would have been better to invest in a more solid project." The cooperative has been gripped by internal conflict since management began efforts to issue its stock to the public in 1999. Tnuva - Israel's largest dairy producer - was founded to market the produce of the country's kibbutzim and moshavim. Opponents of the IPO - primarily within the moshavim - have been intensifying calls for the the removal of the cooperative's CEO, kibbutznik Arik Raichman, and included the planned Romanian expansion as an example of his mismanagement. Matalon stressed that the basic complaint on the part of the moshavim is the way the decision to establish the Romanian factory was taken. Tnuva management, led by Raichman, made the decision without seeking approval from neither the 61-person council that represents the dairy farmers who own the company, nor from the 610 member units who are represented directly through Tnuva's general assembly, Matalon charged. "Such a big move - both financially and in principal, since this is Tnuva's first expansion beyond Israel - should have received the owners' approval," Matalon said.