Ministries formulating rescue package for Phoenicia glassworks

The company's plant at the Tziporit industrial zone in Upper Nazareth employs 400 people.

A special team from the Ministry of Finance and Ministry of Industry, Trade and Labor, headed by Ministry of Industry director general Sharon Kedmi, will try to draw up a rescue package for troubled Phoenicia America-Israel (Flat Glass) Ltd. The company's plant at the Tziporit industrial zone in Upper Nazareth employs 400 people.

Earlier this month, The Nazareth District Court approved a stay of proceedings for the 78-year old company, because of its severe cash flow distress. Phoenicia Flat Glass owes NIS 320 million, mostly to banks and suppliers.

Phoenicia Flat Glass produces flat glass panels for the construction and solar panels industries. The company attributes most of its crisis to high energy costs, due to the delay in hooking the factory up to the natural gas pipeline from the Tamar field.

The company is only due to be hooked up to the gas pipeline in two years, and, in the meantime, it has to use expensive fuel, which it cannot afford. The factory has expanded its operations in recent years, and installed a large kiln on the assumption that it would use natural gas. "Unless a serious solution is found to enable Phoenicia to bridge this gap, until natural gas arrives, the plant will continue to slide into the abyss," said a source familiar with the company's financial shape.

A few months ago, Phoenicia Flat Glass's executives, including representatives of its US controlling shareholder Guardian Industries Inc., and chairman Oded Tyrah, asked the Ministry of Industry's Investments Promotion Center for a grant of at least NIS 100 million to keep the company going. Prime Minister's Office director general Harel Locker, who dealt with the government's handling of the request, rejected it.

Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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