Ahava seeks to move production out of West Bank

Ahava

Under pressure from the BDS movement, the Israeli cosmetics company is considering opening a plant inside the Green Line.

Ahava, the Israeli cosmetics company that bases its products on Dead Sea minerals, and is controlled by Kibbutz Mitzpe Shalem, is expected to transfer its manufacturing activities away from the kibbutz, which is in the West Bank, sources inform "Globes." The kibbutz will invest NIS 10 million in the new production plant in the nearby Tamar Regional Council to the south, which is inside the "Green Line."

Ahava has come under enormous pressure from pro-Palestinian and BDS groups in recent years. Three years ago it was forced to close down a retail outlet in London after it became a focus of demonstrations because its production facility was in land captured by Israel in 1967.

Ahava will not be the first Israeli company to move its production facilities out of the West Bank. Sodastream International Ltd. (Nasdaq: SODA) moved its production facilities from Maaleh Adumim, and Bagel Bagel and Mul-T-Lock moved out of the Barkan Industrial Zone.

Ahava's factory on Mizpeh Shalem in the Judean Desert in the Megillot Regional Council is 13 kilometers north of Ein Gedi. The kibbutz was founded by the IDF's nahal unit in the early 70s through an agreement with the World Zionist Organization (WZO).

In October 2008, Ahava leased 6,000 square meters from the kibbutz for 10 years, with an option for an additional 10 years. The annual rental payment was NIS 530,000. The firm's offices are in Airport City by Ben Gurion Airport.

In addition to Kibbutz Mitzpeh Shalem, the company's shareholders include B. Gaon Holdings Ltd. (TASE: GAON), the Livnat family and Shamrock Holdings. In 2014, Ahava had revenue of NIS 183 million. The workforce was cut from 299 in 2013 to 225 at the end of 2014. Sales were hit by fall in tourism due to Operation Protective Edge and the economic crisis in Russia.

Ahava said in response, "Due to expanding production needs and changes in regulations for manufacturing cosmetics products in certain Western countries, Ahava is examining the option of setting up another factory. One of the possibilities is the Tamar Regional Council. Other alternatives are being investigated. No decision has yet been taken to open the additional plant."

Published by Globes [online], Israel business news - www.globes-online.com - on June 8, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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