Manufacturers: Gaza operation cost NIS 345m

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Factories between Tel Aviv and Haifa suffered NIS 170 million in damages.

The economic damage to industrial plants under missile fire during the first eight days of Operation Protective Edge totaled NIS 345 million, according to the Manufacturers Association of Israel Research Department.

According to the Association's statement, factories in southern Israel, including the area bordering the Gaza Strip, suffered NIS 145 million in damages, and factories in the area from Tel Aviv to Haifa suffered NIS 170 million in damages. Jerusalem plants suffered an estimated NIS 30 million in damage. The survey includes field reports from 90 industrial plants all over Israel, divided into districts.

Based on the survey findings, the Research Department estimated the economic damage to industry as a whole. The calculation took into account the daily loss in product according to the salary cost of the employees not coming to work, as well as the loss in profit and partial loss of fresh raw materials.

The survey shows that the fighting caused a 20-40% loss of profit, mainly in factories that work round the clock and food plants, in the southern region, compared with a 7% loss of profit in the central region. In addition, some of the plants report a loss of raw materials, especially round the clock plants and food plants, amounting to 2%.

The calculation indicates that 40% of the economic damage comes from damage to industrial plants in the south, which employ less than 20% of all industrial employees in Israel. Half of the damage was to factories in Tel Aviv, the central region, and Haifa, where almost 60% of industrial employees work. The remaining damage was to plants in the Jerusalem and northern districts.

The Manufacturers Association's estimate does not include monetary damage from direct hits on factories, or indirect damage, such as damage to reputation among overseas customers, cancelation of future deals, failure to meet deadlines, etc.

High proportion of employees come to work

According to Manufacturers Association figures, the average proportion of employees showing up for work in industrial plants during the Gaza campaign was 85%. The proportion was 80% in the southern district, 90% in the area from the central region to Haifa, and 95% in Jerusalem and northern Israel. Only a few plants in the south reported that 30-50% of their employees had come to work.

The Association believes that the proportion of employees present at work in the south is high, compared with previous campaigns (Operations Cast Lead and Pillar of Defense), thanks to the clear improvement over the past two years in preparation by the plants and other systems, the arrangements for making secure area accessible all over the south, and the protection afforded by Iron Dome.

Manufacturers Association and Federation of Israeli Economic Organizations President Zvika Oren said, "The fighting in the south and the missile barrages are disrupting the proper functioning of factories all over Israel. We are therefore taking steps now to reach a financial compensation arrangement with the Ministry of Finance as soon as possible for damage caused by the drop in activity. We are also taking joint action with the Histadrut (General Federation of Labor in Israel) to arrange compensation for employees whom the security situation has prevented from working."

Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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