|
Report Date : |
04.04.2013 |
IDENTIFICATION DETAILS
|
Name : |
HAIFA CHEMICALS LTD |
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Registered Office : |
P.O. Box 15011,
M.T.M Compound, Build. No. 30, Haifa 3190502 |
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Country : |
Israel |
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Date of Incorporation : |
16.03.1966 |
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Legal Form : |
Public Limited Liability Company |
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Line of Business : |
Developers, manufacturers, exporters and marketers
of specialty fertilizers for agriculture and horticulture |
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No. of Employees : |
Having 550 employees in
subject’s Group in Israel (similar to 2011 and the beginning of 2010, had 500
employees in 2008), and 700 employees in HAIFA CHEMICALS Group globally, as
of mid 2012. |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Unknown |
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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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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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 |
israel - ECONOMIC OVERVIEW
Israel has a technologically advanced
market economy. It depends on imports of crude oil, grains, raw materials, and
military equipment. Cut diamonds, high-technology equipment, and agricultural
products (fruits and vegetables) are the leading exports. Israel usually posts
sizable trade deficits, which are covered by tourism and other service exports,
as well as significant foreign investment inflows. The global financial crisis
of 2008-09 spurred a brief recession in Israel, but the country entered the
crisis with solid fundamentals - following years of prudent fiscal policy and a
resilient banking sector. The economy has recovered better than most advanced,
comparably sized economies. In 2010, Israel formally acceded to the OECD.
Natural gasfields discovered off Israel's coast during the past two years have
brightened Israel's energy security outlook. The Leviathan field was one of the
world's largest offshore natural gas finds this past decade. In mid-2011,
public protests arose around income inequality and rising housing and commodity
prices. The government formed committees to address some of the grievances but
has maintained that it will not engage in deficit spending to satisfy populist
demands.
|
Source
: CIA |
HAIFA CHEMICALS LTD.
Telephone 972 74 737 37 37
Fax 972 74 737 36 48
P.O. Box 15011
M.T.M Compound, Build. No.
30
HAIFA 3190502 ISRAEL
Originally incorporated as a public limited company and registered as such
as per file No. 52-002721-0 on the 16.03.1966.
Converted into a private limited company and registered as such as per file
No. 51-136932-4 on the 28.02.1989.
Re-converted into a public limited liability company and registered as per
file
No. 52-003945-4 on the 02.06.1993.
Later, after a change in subject's statute, subject became again a private
limited company (same registration number).
Authorized share
capital NIS 100,000,000.00, divided into -
100,000,000 ordinary shares of NIS 1.00 each,
of which 55,032,581
shares amounting to NIS 55,032,581.00 were issued.
Subject is fully owned
by TRI-HF INC of the USA, of TRANS-RESOURCES INC (TRI), part of TRUMP Group,
owned by Jules Trump and his brother Eddie Trump.
In 1986, TRI acquired its shares in subject from the State of Israel.
The Trump Bros. reached control in TRI at the end of September 2008 (circa
66%), after they purchased some 19% from Sagi Genger, son of Arie Genger. Until
then, Arie Genger was the dominant figure and controlled HAIFA CHEMICALS since
1986 (now holds the reminder 34%, with his daughter).
Reportedly, this was a hostile takeover, after Sagi Genger sold most of his
shares without his father’s consent.
1. Nadav Shachar, General Manager,
2. Jules Tramp, of the USA.
Developers, manufacturers, exporters and marketers of specialty fertilizers
for agriculture and horticulture, mainly (some two thirds of turnover)
potassium nitrate (KNO3), and others (e.g. phosphoric acid, sodium
tri-polyphosphate, special NPK fertilizers, magnesium nitrate), food additives,
as well as industrial chemicals.
95% of sales are
exports to more than 100 countries worldwide.
Among local customers: AMGAL CHEMICALS PRODUCTS, HAGARIN, GALIL CHEMICALS,
ELECTRO CHLORINE CHEMICAL INDUSTRIES, GENIGAR PLASTIC PRODUCTS, ATEKA, TEVA
VITMAN, etc.
Among local suppliers: ISRAEL CHEMICALS (main supplier), LINE SAKIM,
CHEMITAL, EMIL K. METALS, ARDAN CONTROL-TECH, DEPOTCHEM, ITZHAK SHINITZKY, P.A.T. COMPRESSED AIR TECHNOLOGIES, EUTEOS, MODCHEM, K.L.A TRADE
& ENGINEERING, MEGACHEM, GAL
PALLETS, CHEMIART, FIBER TECHNIC, etc.
Operating from headquarters (offices) premises in M.T.M Compound, Haifa,
and from plant and storage facilities, on an area of 250,000 sq. meters, in the
Haifa Bay Industrial Zone, Haifa. Also operating from subsidiary HAIFA SOUTH
plant, on an area of 250,000 sq. meters, in Mishor Rotem in the Northern Negev.
Both plant premises’ land is very long-term leased from the State, practically
owned.
Group is also operating from a plant in Lunel, France and from further
offices, storage facilities and from sales offices worldwide.
Having 550 employees in subject’s Group in Israel (similar to 2011 and the beginning
of 2010, had 500 employees in 2008), and 700 employees in HAIFA CHEMICALS Group
globally, as of mid 2012.
Subject is also using some 150 subcontractors’ workers.
According to a report from May 2009 subject's 2008 equity was NIS 660 million.
From mid 1990s
until around 2003, subject suffered from losses and entered into heavy debts.
However, subject enjoyed a dramatic positive change in its profitability in
recent years, and along with arrangements reached with its bankers (Bank
Hapoalim, Israel Discount Bank and Industry Development Bank)
concerning spreading its debts return schedules, subject’s financial status
improved.
According to
reports from September 2008, subject carried around NIS 900 million debts to
their bankers, mainly to Bank Hapoalim (NIS 600 million), scheduled to be
covered by end of 2009. NIS 288 million is owed to Israel Discount Bank and NIS
72 million to Industry Development Bank.
Subject is an “Approved Enterprise” and as such enjoys tax benefits and
State incentives. In December 2002, the Israeli Investment Center approved a
US$ 6.6 million investment plan for the expansion of the Group’s plant in
Mishor Rotem.
Stock was valued at US$ 100,000,000 in mid 2012 (similar to 2011 and 2010).
Value of Machinery & Equipment: US$ 500,000,000, as of mid 2012.
There is 1 charge for an unlimited amount registered on the company's
assets, in favor of State of Israel (charge placed in April 1989).
Consolidated 2005 sales claimed to be US$ 390,000,000.
Consolidated 2006 sales claimed to be US$ 400,000,000.
Consolidated 2007 sales claimed to be US$ 450,000,000.
According to
reports 2008 sales were NIS 2,300,000,000, ending with a profit of NIS 500,000,000.
Sales as informed to us by subject’s CFO:
2009 sales were US$
600,000,000, of which 95% were for export.
2010 sales were US$ 600,000,000, of which 95% were for export.
2011 sales were US$ 580,000,000, of which 95% were for export.
Later sales figures unavailable.
100% subsidiaries:
HAIFA CHEMICALS SOUTH LTD., manufacturers, exporters and marketers of
specialized fertilizers for agriculture and food additives.
HAIFA CHEMICALS HOLDINGS LTD.
HAIFA CHEMICALS CHINA,
HAIFA CHEMICALS INDIA,
HAIFA CHEMICALS R.S.A., South Africa,
HAIFA CHEMICALS (HELLAS) S.A., Greece,
HAIFA CHEMICALS NORTHERN EUROPE, Belgium,
HAIFA NUTRITECH INC., USA,
HAIFA CHEMICALS SOUTH AMERICA (ARGENTINA) LTD.
Parent TRI also holds: NACHURS ALPINE SOLUTIONS (NAS), Canada,
manufacturers and marketers of liquid fertilizers.
Bank Hapoalim
Ltd., Main Haifa Branch (No. 700), Haifa.
Bank Leumi
Le’Israel Ltd., Main Haifa Branch (No. 876), Haifa.
Israel Discount
Bank Ltd., Main Haifa Branch (No. 070), Haifa.
CitiBank N.A, Tel Aviv Branch (No. 001), Tel Aviv.
So far we were unable to speak with subject's CFO. We left a message, and
in case we manage to get fresh data, we shall update you accordingly.
On May 2011 250 of subject's workers went on strike, demanding an
improvement in salary and benefits. The strike lasted half a year, almost
paralyzing subject completely, and was considered a flagship strike from
workers aspect, backed up by other parties. It ended in the beginning of
November 2011, with severe damages for both sides (striking workers did not
receive salaries and activities in Haifa a plant were halted from June 2011
until September 2011) as well as a reported decline in export of some 40%.
The dispute ended with an up to a 24% salary increase and work resumed.
In July 2011 the Ministry of Environment has revoked subject's Toxic
Permit, and ordered subject to evacuate all the poisons and hazardous
substances in the Haifa plant, as well as subject's huge ammonia tank located
in Haifa Bay. In August 2011 it was reported that the Ministry opened a
criminal investigation against subject due to its failure to comply with the
evacuation order. Reportedly, subject was scheduled to receive the toxic permit
by mid October 2011 (we found no indication that it was returned, however we
assume subject is holding the permit, otherwise it wouldn't be able to
operate).
In March 2012 the Ministry of Environment and Ministry of Industry &
Trade agreed on the evacuation of subject's ammonia storage facility to a less
populated location.
Subject is also arguing over the sum of NIS 28 million it was ordered to
pay as part of the cleaning of the Kishon River, which subject was one of its
polluters, claiming its damages are much lower. We found no further data on
matter
During past years, several lawsuits and requests for class motion acts were
filed against subject and other plants regarding environmental damages
(considered as a main source of contamination in the area), and subject was
convicted in some cases (see below, other are relatively minor). On the other
hand, subject has been investing millions in the environmental field in recent
years it.
In April 2007, the Haifa Magistrate Court rejected the motions for class
actions against subject and others, considering that charging the plants may
have severe economic implications on the plants.
In March 2009 subject was granted from the first time since its inception,
a business permit from Haifa Municipality, after it finally handled all
building and environmental aspects considered faulted all the years. With the
official approval, it allows subject to raise capital from non-banking
corporations, which was till then prevented from subject.
In December 2009 it was reported that subject is lowering the emission of
greenhouse gasses and the balance quota will be traded and sold onward (via
CITYBANK). Quota is valued at US$ 60 million.
In October 2011 subject's Southern plant was fined NIS 500,000 due to
environment violations between 2003- 2005.
Subject decided in April 2009 to close all its local manufacturing lines,
sending many of its workers on a compulsory leave, due to a dispute with DEAD
SEA WORKS LTD., a subsidiary of ISRAEL CHEMICALS (ICL) concern, the main local
supplier of potash (raw material for subject’s main product - potassium
nitrate), regarding potash allegedly unreasonably high price. Subject also
approached the government, complaining of ICL abuse of monopoly powers (which
holds the State’s concession for excavating potash).
Subject’s CFO, Tamir Kadishi, informed us that their whole maneuver was
planned in advance and subject equipped itself with high stocks of potash (in
order to answer all planned clients’ demands) and arrangements with its
bankers. Subject purchased in 2008 potash from ICL in volume of US$ 100 million.
According to the CFO, this comprises over 10% of DEAD SEA WORKS’ production of
potash, which empowers subject in its straggle. Later subject resumed work as
usual, the dispute went to arbitration (meanwhile purchase price of potash was
cut to half - US$ 300 per ton), and the arbitrator was to set a price that will
stand for the next 10 years.
In November 2012 it was reported that subject fiercely rejects the
acquisition of ICL by POTASH CORPORATION (currently holding 14% in
ICL), due to fear of potash price raise.
Following the financial crisis that subject experienced during the years
between mid/ late 1990s and beginning of 2000s, there were reports on claims by
bank creditors, both of subject and on parent TRI (who loaned from Bank
Hapoalim NIS 230 million for acquiring subject). Eventually, subject reached
arrangements with its bankers and in 2008 TRI paid back its loan to the bank as
well.
Subject’s officials claimed that they managed to become profitable since
2003.
Subject is ISO 9001, ISO 14001, OHSAS 18001 certified. Also GMP qualified
for food products.
In May 2007 it was reported that subject was chosen to be a leading
supplier of melted salts (potassium nitrate) in a huge project in the solar
energy field being erected in Spain ("Andsol 1"), a project which is
worth € 260 million.
This project puts subject in a leading position for future solar energy
projects. Subject's part in the project is valued at US$ 15 million for the
next 2 years.
In July 2007 it was reported that subject's Board approved an agreement
with EDELTECH for the erection of a private power station based on natural gas
in subject's plant in Mishor Rotem. The agreement was finalized in June 2008,
and the power station is scheduled to be operative by 2012. The 1st
stage would be of a power station in capacity of 100mv, with an investment of
US$ 150 million.
The September 2008 hostile takeover of control in subject by the Tramp
family of the USA on account of Arie Genger led to some turbulence in subject’s
top management, including the topping down of former chairman and Acting
General Manager Avi Philosoph, Mr. Genger’s right arm (and the person
considered responsible for subject’s recovery in recent years) and the
nomination of Nadav Shachar as General Manager. Shachar served as the General
Manager of the AFRICA ISRAEL Concern.
In August 2009 subject announced the sale of its holdings in ELGO
IRRIGATION LTD. (77%) for the sum of NIS 12.4 million.
In August 2009 it was reported that subject signed a SAP implementation
deal in its plants IT systems, in an estimated value of NIS 7 million.
In December 2009 it was reported that Egyptian Gas supplier EMG will
supply subject’s plants with natural gas valued in value of US$ 70 – US$100
million, this until the planned construction of a private power plant in
subject’s premises. In 2011 EMG unilaterally decided to cease gas supply to
Israel (due to political motives), and in September 2011 subject was connected
to the alternative YAM TETHYS gas supplier.
The local Chemical
industry is considered one of the strongest in the market, with impressive
growth trend in recent years. The chemical industry includes minerals
extracted, refinery and petrochemical industry, manufacturing of pesticides for
agriculture, pharmaceuticals and bio-technology industries, as well as other
consumer products related industries, including paints, cosmetics, cleaning
materials and others. The industry employs over 30,000 employees.
Total turnover of
the local Chemical Industry in 2008 amounted to US$ 26 billion, comprising some
30% of Israel’s total industrial turnover. Sales for export recorded US$ 14
billion, comprising some 35% of Israel’s total export, continuing years of
constant growth. Growth trend reversed in 2009, due to the economic crisis in the
global markets.
The Chemical
sector recovered in 2010, where export of Industrial Chemicals rose by 34.3%
from 2009, kept rising in 2011(by 18.6%), but fell by 9% in 2012. Sales for
export in 2012 reached US$ 15.1 billion (of which US$ 6.85 billion were of
pharmaceuticals).
According to Central Bureau of Statistics data, investments
in imported machinery and equipment from for the Chemical Industries (incl.
Pharmaceuticals) in 2011 summed up to NIS 1,482.3 million, 44.8% increase in real
terms from 2010, reversing the trend from the last couple of years of 24.1%
decrease in 2010 from 2009 and 0.5% decrease in 2009 from 2008.
Notwithstanding the lack of updated details
from subject's officials, considered good for trade engagements.
Note: The telephone numbers you gave
(972-4-8469611; 8469630), as well as P.O. Box #10809 are no longer relevant to
subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.39 |
|
UK Pound |
1 |
Rs.82.05 |
|
Euro |
1 |
Rs.69.59 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
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 |
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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.