Published On: Wed, Jul 16th, 2014

Security situation In Israel adds to exporters’ woes

 

Israel Export CEO: We’ll see deals lost if the Gaza operation continues.

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The incessant rocket fire from the Gaza Strip and frequent Red Alert alarms to the 50 employees of the Nechsaf factory on Kibbutz Nir Am have left CEO Tamir Kimchi without much choice. He will not open the factory tomorrow, because “There is no point in trying to produce in a situation like this. It’s an insane situation; it’s too dangerous. We will reassess the situation on Sunday, and see whether there’s any point in restarting the work. Right now, I’m not able to supply all the workers with a shelter they can reach within 15 seconds. It’s better for them to stay home, ” he told “Globes” today.

Figures compiled over the past day by the Israel Export and International Cooperation Institute and the Manufacturers Association of Israel, mainly from manufacturers in the south, show clearly that despite the ongoing warfare, routine activity in plants is being maintained. According to Manufacturers Association figures, at most of the plants in the south, 80-90% of the workers have shown up for work. “Most of the medium and large-size exporters know how and are prepared to cope with this exceptional situation, ” Export Institute CEO Ofer Sachs said today. “Meanwhile, it is clear that they are managing to meet the supply demands, even if somewhat slowly. As of now, the exporters are keeping their heads above water and coping with the fighting, while dealing with an even more difficult problem: the low shekel-dollar exchange rate.”

According to Sachs, if the fighting in the south goes on and on, the exporters will find it difficult to meet their commitments to their overseas customers. “They will have trouble meeting the timetables, because regular production is being frequently disrupted by alerts, and because our frontline warehouses are starting to run low. In a situation like this, it looks like the distress will get worse the longer the operation in Gaza lasts. We’ll see deals lost, and there is real concern that customers around the world will prefer suppliers who can operate in a quieter environment, and meet regular supply timetables, ” he predicted.

No delays expected

Given the fighting in Gaza, and in attempt to avoid uncertainty among Israeli companies’ overseas customers, the Export Institute has written a letter to customers explaining that all systems in Israel are working as usual: “The Israeli government authorities have taken all the measures required in order to ensure regular exports of goods and the continuation of business activity. We expect no delays or disruptions in the supply of goods, or breaching of commitments by Israeli exporters to their overseas customers, ” the letter signed by Sachs stated.

In a “Globes” interview, Sachs stated, “Israeli companies’ customers around the world are liable to change their attitude because of a fault or operational error in IDF operations in Gaza. Fortunately, so far this has not happened, and we hope it won’t happen, because such a situation is liable to expose Israeli companies to difficulties with their overseas clients around the world.”

About 335 companies in the south each account for over $50, 000 of exports, and exports by these companies totaled $7.45 billion in 2013. 304 of these companies each had between $50, 000 and $10 million in exports, with their aggregate exports totaling $320 million in 2013. 30 companies in the south exported over $10 million each, and their aggregate 2013 exports totaled $7.1 billion.

Published by Globes [online], Israel business news – www.globes-online.com 

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