Carmit candy factory moving to Galilee

Carmit Photo: PR

The company will receive NIS 20 million in grants and a site twice as big as its current one in Rishon Lezion.

Israeli candy factory Carmit Candy Industries Ltd. (TASE: CMRT), controlled by businessperson Lenny Sackstein, is likely to move its business from Rishon Lezion to a site twice as large as its current one, sources inform "Globes." The company's current site in Rishon Lezion houses a plant, a distribution center, and the company's management offices. Carmit is now planning to move its center to the Galilee, a move that will cost an estimated NIS 80 million.

The move is scheduled within 3-4 years. Carmit's current plant, which is used to manufacture the company's products, covers 10,300 square meters, including production and storage space. The company's facilities contain 16,300 square meters in total space.

An appraisal by the Ahikam Bitan and Partners real estate firm attached to Carmit's financial statements states that the property is worth an estimated NIS 25 million. The area where the plant is currently located belongs mostly to Gemview, a company under South African ownership incorporated in the UK; only 4,312 square meters is owned by Carmit, which leases the rest from Gemview. The new area in the Galilee to which Carmit is likely to move has 25,000 square meters; the plant's size will increase to 12,500 square meters (from 12 dunam (three acres) to 24 dunam (six acres)).

Carmit will gain substantial financial benefits by moving to the Galilee. The Law for the Encouragement of Capital Investments gives export industries (industries exporting at least 25% of their sales turnover) grants of up to 20% of their capital investments, including construction of a building, machinery, production lines, etc. In certain areas, up to 10% more than that can be obtained, so that when it makes its investments, Carmit is likely to receive grants of up to 30% from the state, amounting to an estimated NIS 20 million (subject to the amount of the investment).

In addition, the company will be entitled to even more far-reaching tax benefits. Exporting companies in the highest national priority areas for exporters are entitled a reduced tax rate of only 7.5%, Companies are also entitled to pay only 20% tax on withdrawal of dividends, instead of 30%.

Published by Globes [online], Israel business news - www.globes-online.com - on April 15, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Carmit Photo: PR
Carmit Photo: PR
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