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Report Date : |
26.07.2012 |
IDENTIFICATION DETAILS
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Name : |
FLEXTRONICS ( |
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Registered Office : |
P.O.
Box 867, Migdal Haemek (2310801), 1 Hata’asiya Street, Ramat Gavriel
Industrial Zone, Migdal Haemek 2307037
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Country : |
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Date of Incorporation : |
29.03.2000 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Electronics and mechanical contract manufacturing services ( |
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No. of Employees : |
3140 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2012
|
Country Name |
Previous Rating (31.12.2011) |
Current Rating (31.03.2012) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
FLEXTRONICS
(ISRAEL) LTD.
Telephone 972 4 644 82
00
Fax 972 4 604 08 50
P.O.
Box 867, Migdal Haemek (2310801)
1
Hata’asiya Street
Ramat Gavriel Industrial Zone
MIGDAL HAEMEK 2307037 ISRAEL
A private limited company, incorporated as
per file No. 51-293304-5 on the 29.03.2000.
Subject is continuing UNISKOR LTD’s
activities (established in 1997), which voluntarily ceased operations, and sold
all its activities to FLEXTRONICS on the 31.05.2000, for a sum of US$ 20
million.
Authorized share capital NIS 39,100.00,
divided into -
39,100
ordinary shares of NIS 1.00 each,
of which 3 shares amounting to NIS 3.00 were
issued.
Subject is a fully owned subsidiary of
FLEXTRONICS CENTRAL, of the Netherlands, controlled by FLEXTRONICS
1.
Yitzhak (Tzahi) Rodrig, Vice President FLEXTRONICS
INTL., Joint General Manager,
2.
Reuven (Ruvi) Shaibel, Vice President FLEXTRONICS
INTL., Joint General Manager,
3.
Uri Bechor, Joint General Manager,
4.
Ziv Sin Maliye,
5.
Francois Barbier,
6.
Fergus Andrew McKay, latter both of FLEXTRONICS
INTL.
Electronics and mechanical contract
manufacturing services (EMS), delivering complete design, engineering and
manufacturing services to the electronics and high-tech industries in Israel
and abroad.
Also operating "Flextronics
Mechanical" Div. for providing manufacturing and assembly services for
large and complex electro-mechanic machinery.
Almost all sales are to the local market.
Amongst clients are most of the leading
electronics industries, including: E.C.I. TELECOM, HP INDIGO, ORBOTECH, APPLIED
MATERIALS, AUDIOCODES, MOTOROLA ISRAEL, SANDISK ISRAEL, CERAGON NETWORKS,
DIALOGIC NETWORKS (ISRAEL), AVAYA COMMUNIC. ISRAEL, ALCATEL L
Among subject’s
foreign equipment and machinery suppliers: SIEMENS- Germany, HELLER- USA, DEK-
UK, SOLTEC- Scotland, etc.
Among local
suppliers: ARNIR A.T. COMMUNICATION, NOA COMPUTERS, BORAN TECHNOLOGIES,
TELESIS, EASTRONICS, C. R. G. ELECTRONICS, EL GEV ELECTRONICS, A.Y.
ELECTRONICS, MOTOROLA ISRAEL, ARROW/ ELECTRONICS, DATA J.C.E., AVIGDOR
INDUSTRIES, IES AGENCIES, CIDEV AGENCIES, BI TEL TECHNOLOGIES, C.V.S.
TECHNOLOGIES, AVIV P.C.B & TECHNOLOGIES, etc.
Operating from:
1. Rented premises, on an area
of 50,000 sq. meters (offices and plants), in 1 Hata’asiya Street, Ramat
Gavriel Industrial Zone, Migdal Haemek.
Subject is in the
process of expanding manufacturing space floor by over 20,000 sq. meters
structure adjacent to the existing one, which was of 12,400 sq. meters till
then (building contractor ORTAM-MALIBU).
2. Rented plant facilities, on
an area of 15,000 sq. meters, in Industrial Zone, Ofakim.
4. A plant, on an area of 10,000
sq. meters, in 16 Hakodchim Street, Industrial Zone, Arad (P.O. Box of 509).
5. Manufacturing facilities, on
an area of 10,000 sq. meters, in the Industrial Zone, Yavne, in No. 3 & in
No. 9 Nahal Snir Street.
(Note: Based on our, also operates from a
branch, rented, of 200 sq. meters, at ECI TELECOM premises in 43 Hasivim
Street, Kiryat Matalon Industrial Zone, Petach Tikva).
Also operating from a plant in the Ukraine.
Having some 3,140 employees.
The price of the transaction of acquiring BORSUK
activities in mid 2011 was not reported, but subject's joint General Manager Uri Bechor was quoted to say in June 2011 that FLEXTRONICS
invested over US$ 50 million in Israel over the last 3 years.
Annual raw
materials purchasing reported to be US$ 260 million (in 2007).
Subject's other
financial details not forthcoming, however known to be financially solid, also
enjoying the backing of parent company FLEXTRONICS INTERNATIONAL, with total
B/S (total assets) as of 30.03.2012 of US$ 11,033.8 million and equity US$
2,284 million. Current market value US$ 4.13 billion.
Subject is an
“Approved Enterprise” and as such, enjoys tax benefits and State incentives. In
March 2002, the Investment Center Authority approved the expansion plan of
subject’s plant, for a sum of US$ 7.8 million.
There
2005 sales claimed to be US$ 210,000,000,
20% for export.
2006 sales reported to be US$ 280,000,000.
2007 sales reported to be over US$
300,000,000.
2008 sales reported to be over US$
400,000,000.
2009 sales reported to be circa NIS
2,000,000,000.
2010 sales reported to be over NIS
2,000,000,000.
2011 sales reported to be over NIS
2,000,000,000.
In June 2011 it was reported that annual
sales are over US$ 500,000,000.
FLEXTRONICS INTERNATIONAL LTD., parent
company,
FLEXTRONICS O.T.M LTD.
FLEXTRONICS SEMIC
Bank Hapoalim Ltd., Hadar Yossef Branch (No.
610), Tel Aviv.
City Bank N.A, Tel Aviv Branch (No. 001),
Tel Aviv.
Note: Since we could
not speak to subject's officials, we could not confirm the above data.
Nothing unfavorable learned.
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We left messages which so far remain
unanswered.
Subject is a leading player in the EMS
outsourcing services in Israel.
FLEXTRONICS INTERNATIONAL is a leading,
Fortune 500 EMS provider offering solutions for the various industries. It
operates from 30 countries, with over 200,000 employees and sales: US$ 29,387.6
million for Fiscal Year 2012 (ending 30.12.2012), making a net profit of US$
488.8 million.
Subject meets ISO 9001:2000, ISO 14001:2004
and other international quality standards.
Subject, like vast majority of the local
electronics industry, was adversely hit by the effects of the global economic
crisis. During the 2009 1st quarter there were several reports on massive lay-offs in
subject’s plant, as part of a global policy by its parent company to confront
the crisis, including of (temporary) employees. According to a report from
September 2010, 400 employees were laid-off all together. Nevertheless, since
mid 2009, like other companies in the field, subject benefited from the
improvement in global electronics industry.
In April 2000 FLEXTRONICS INTERNATIONAL
acquired UNISKOR LTD. from the NISKO Group, in consideration of US$ 20 million.
Subject took over UNISKOR LTD’s name, business and reputation.
In 2005, FLEXTRONICS INTERNATIONAL acquired
an electronics plant in the Ukraine and moved it to the management and
responsibility of subject. The plant has 850 employees.
In the beginning of 2008 subject acquired
the Ofakim plant of ECI TELECOM, a local leading telecommunications
manufacturer, including hiring some of the plant’s 650 - 700 employees who
worked in ECI. According to reports, subject paid US$ 270 million for the
plant. ECI also decided to shift employees in its supply chain positions to
subject that will perform the work in outsourcing, as part of its cost-saving
scheme.
In September 2011 it was reported that ECI
is contemplating the termination of the contract with subject, and opening
their own manufacturing facilities centers in China, India or even in Israel,
or moving to a new EMS firm.
In September 2008
it was reported that subject is suing GO NETWORKS for NIS 8.1 million on the
charges of not paying subject for services it provided for GO NETWORKS (now
NextWave).
In March 2010 it was reported that subject
signed a deal with local solar panels developer SOLAREDGE. Subject will manufacture
electronic systems for SolarEdge in annual volume of US$ 20 million, and
reportedly, actual manufacturing has already started in early 2010, employing
100 workers in Migdal Ha’emek plant and expected to employ 350 within the next
2 years. According to the agreement, subject purchases the raw materials and
electronic components, manufactures the systems and SolarEdge purchases the
systems and sells to their clients (GE, B.P. SOLAR and SCHOTT SOLAR).
In July 2010 it was reported that subject
will acquire the assets and activities of NEPCON MANUFACTURING TECHNOLOGIES
LTD. (as well as other companies of the NEPCON Group, including BASEON) for NIS
28 million. NEPCON established 1979, is an outsourcing company,
providing manufacturing services to the high-tech industry, including design,
engineering, assembly, integration, logistics, etc., after NEPCON
encountered financial difficulties and went into freezing procedures. In
October 2010 the Authorities approval received.
During 2011 subject completed the acquisition and
integration of the plant of MOTOROLA ISRAEL in Arad including the 400 employees
into subject's activities. The transaction also included the obligation by
MOTOROLA to purchase products from subject for the next several years. Price of
deal not forthcoming.
In July 2011 subject completed the acquisition of all
BORSUK Group activities, including stock, employees, agencies, goodwill, etc.
The acquired Group, with 2010 sales circa NIS 200 million, includes its main
company BORSUK COMPUTER CONTROLLED PUNCHING LTD., manufacturers and
assemblers of electronic equipping and packing,
as well as BORSUK METAL TECHNOLOGIES LTD.,
BORSUK LTD. and more). In March 2011 subject received the Anti-trust Authority
approval for the said acquisition.
BORSUK's activities and 200 employees were merged into
subject's new "Flextronics Mechanical" Div. The division was established in
view of expanding subject's operations, and jointly with the 300 employees of
NEPCON they will provide manufacturing and assembly services for large and
complex electro-mechanic machinery with. Most of
these activities would be with large foreign manufacturers (as the local market
is limited in scope)
The global economic crisis which erupted in the last third of 2008
adversely affected the global electronics and hi-tech markets and in-turn, hit
the local electronics industry. Nevertheless, local
companies in the Electronics and Software branches in general have proven
ability to withstand light of the crisis, much given the fact that global
electronics sector begun recovery since mid 2009. According to the Israel
Association of Electronics & Software, hi-tech industries sales in 2011
reached around US$ 25 billion, up from US$ 23.5 billion in 2010, US$ 22.85
billion in 2009 and US$ 21.3 billion in 2008.
2010
sales divided into export of US$ 19.9 billion (US$ 19.45 billion and US$ 18
billion in 2009 and 2008, respectively) and US$ 3.6 billion sales to the local
market. Division of export: 32% to North America, 28% - Europe, 27% - Asia.
Export
of electronic products in 2011 kept rising and reached US$ 21 million: 3.4%
increase in Electronic Components & Computers, and 3.9% increase in
Communications, Medical & Scientific Equipment.
The division of companies by production within the
branches is as follows: 22% Software, 23% Civilian Communications &
Telecommunications, 18% Industrial Equipment, 19% Defense Systems, 14%
Components and 7% Medical Systems.
68,000 employees were serving in the Electronics sectors, and 83,000 in
the software sectors.
According
to the Central Bureau of Statistics (CBS), import of raw materials
for the local Machine and Electronics Manufacturing rose in 2010 by 19.8% from
2009, reaching US$ 7,817 million, after a 18.2% decrease in 2009 (from 2008),
which was due to the global economic crisis. The trend continued in 2011 –11.9%
rise from 2010, totaling US$ 8,743.7 million.
Investments
(capital formation) by the hi-tech industries in machinery and equipment from
import in 2011 rose by 190% from 2010 (when it rose 11.6% from 2009, after
61%plunge from 2008) and summed up to NIS 9,117 million. The remarkable
increase is attributed to the sharp jump-off in the Electronic Components
segment of 742%(!) summing up to NIS 6,366 million (after a 15% decrease in
2010) on the background of the massive investment by INTEL ISREL in upgrade of
their machinery and equipment. Other segments also remarked a growth, albeit
much moderate: Investment in the equipment for Industrial Control reached NIS
1,376 million – 11.5% increase after 33% increase in 2010); Electronic
Communications equipment - NIS 1,262 million (19% increase after 16% increase
in 2010); and Office & Computing equipment marked a 13.5% rise (after 12.5%
rise in 2009), reaching NIS 113 million.
Notwithstanding
the lack of updated data from subject's officials, considered good for trade
engagements.
Note: Since the beginning of 2012 Israel Post
started using a new area code method of 7 digits (the old method of 5 digits
will still be valid till end of 2012).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.56.37 |
|
UK Pound |
1 |
Rs.87.44 |
|
Euro |
1 |
Rs.68.04 |
INFORMATION DETAILS
|
Report Prepared
by : |
NLM |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.