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Report No. : |
350812 |
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Report Date : |
26.11.2015 |
IDENTIFICATION DETAILS
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Name : |
HAIFA CHEMICALS LTD. |
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Registered Office : |
P.O. Box 15011, Matam Park, Bldg. 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 Company |
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Line of Business : |
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. |
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No. of Employees : |
750-800 |
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 : |
Good |
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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 31, 2015
|
Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
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Israel |
B1 |
B1 |
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Risk Category |
ECGC
Classification |
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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. Cut
diamonds, high-technology equipment, and pharmaceuticals are among the leading
exports. Its major imports include crude oil, grains, raw materials, and
military equipment. Israel usually posts sizable trade deficits, which are
covered by tourism and other service exports, as well as significant foreign
investment inflows. Between 2004 and 2013, growth averaged nearly 5% per year,
led by exports. 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.
Israel's economy also has weathered the Arab Spring because strong trade ties
outside the Middle East have insulated the economy from spillover effects.
Slowing demand domestically and internationally and reduced investment due to
uncertainties caused by the Gaza conflict in summer 2014 have reduced GDP
growth to about 2% during 2014. Natural gas fields discovered off Israel's
coast since 2009 have brightened Israel's energy security outlook. The Tamar
and Leviathan fields were some of the world's largest offshore natural gas
finds this past decade. The massive Leviathan field is expected to come online
no sooner than 2017, but production from Tamar provided a one percentage point
boost to Israel's GDP in 2013 and a 0.5% boost in 2014. In mid-2011, public
protests arose around income inequality and rising housing and commodity
prices. Israel's income inequality and poverty rates are among the highest of
OECD countries and there is a broad perception among the public that a small
number of "tycoons" have a cartel-like grip over the major parts of
the economy. The government formed committees and has started splitting up the
oligopolies to address some of the grievances but has maintained that it will
not engage in deficit spending to satisfy populist demands. Over the long term,
Israel faces structural issues, including low labor participation rates for its
fastest growing social segments - the ultra-orthodox and Arab-Israeli
communities. Also, Israel's progressive, globally competitive, knowledge-based
technology sector employs only 9% of the workforce, with the rest employed in
manufacturing and services - sectors which face downward wage pressures from
global competition.
|
Source
: CIA |
HAIFA CHEMICALS LTD.
Telephone 972
74 737 37 37; 737 37 17
Fax 972 74 737 36 48; 737 36 46
Email: info@haifa-group.com
P.O. Box 15011
Matam Park, Bldg. 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 TRANS-RESOURCES INC (TRI) (via fully owned TRI-HF
INC of the USA - 92.7% and TRANS RESOURCES (ISRAEL) LTD. - 7.3%), part of TRUMP
Group, controlled 66% 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
& Deputy Chairman,
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 PROD
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 Matam High-tech &
Business Park, Bldg. No. 30, Haifa, and from plant and storage facilities, on
an area of 250,000 sq. meters, in the Haifa Bay Industrial Zone, Haifa (plant
premises’ land is very long-term leased from the State, practically owned).
Also operating from subsidiary HAIFA SOUTH owned plant, on an area of 250,000 sq.
meters, in Mishor Rotem in the Northern Negev.
Group is also operating from 2 plants in Lunel, France, from a new plant in
Georgia, USA, and further offices and storage facilities worldwide.
Having 750 - 800 employees. Also using subcontractors’ workers.
In March 2015 it
was reported that a group of Chinese investors is contemplating acquiring 49%
of subject according to a company value of US$ 1 billion (no further data found
on matter).
From mid 1990s
until around 2003, subject suffered from losses and entered into heavy debts.
However, it enjoyed a dramatic positive change in its profitability in last
years, and along with arrangements reached with its bankers, subject’s financial status improved. The General Manager said in a media
report in early April 2015 that they now have surplus in assets over financial
liabilities, clean of financial liabilities and equity financing 60% of B/S. He
added that subject made US$ 100 million investments in Israel, plus US$ 18
million in its 2 plants in France and new plant in the USA.
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 million in mid-2012 (similar to 2011 and 2010).
Value of Machinery & Equipment: US$ 500 million, as of mid-2012.
Later financial data unavailable.
There are no charges registered on the company's assets.
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.
2012 sales were NIS 2,200,000,000, of which 95% were for export.
2013 sales were NIS 2,500,000,000, of which 95% were for export.
2014 sales were NIS 2,500,000,000, of which 95% were for export.
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.
The First International Bank of Israel Ltd., Haifa Main Branch (No.
006), Haifa.
There has been a long dispute between subject and DEAD SEA WORKS (DSW),
which is part of ISRAEL CHEMICALS Group (ICL), the main local supplier of
potash (raw material for subject’s main product - potassium nitrate), with
subject claiming it has been over charged for the potassium along the years, by
ICL abusing its monopoly position, and counterclaims by ICL. This dispute
started in 2009, when subject to close all its local manufacturing lines, also
for potash allegedly unreasonably high price, and asked for the government to
intervene (ICL holds the State’s concession for excavating potash). Back then,
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, which according
to the CFO, comprises over 10% of DSW’ production of potash. The dispute went
to arbitration, and in March 2014 the arbitrator finally issued its verdict,
which in principle accepting subject's claims, setting a lower price for the
potassium. A CPA was nominated to calculate the compensation of ICL, which
subject estimates at US$ 110-150 million overcharged in 2009-2013.
In June 2015 it was reported that ICL is expected to compensate subject for
US$ 60-US$ 70 million for overcharging.
On top of that, there are other related matters: first, a strike that took
place in ICL local plants in April 2015, which harms the potash supply for
subject.
Second, in late March 2015, OIL REFINERIES LTD. (ORL) filed a lawsuit
against subject to the Haifa Magistrate Court, demanding it to evacuate their
plant till the end of lease of their long-term contract in end of 2015. The
premises are part of subject's manufacturing facilities, which sits in 'ORL
Compound', and allegedly belongs to ORL. Subject objects the allegations
entirely, saying the plot is State's land (ORL went through privatization), and
pointing to the fact that ORL is a sister company of ICL, therefore the motives
are malicious.
Third, ICL reported that it now considering erecting its own KNO3 plant
(investment of US$ 150 million) which will directly compete with subject, on a
global market which is valued at US$ 1 billion per annum.
In June 2015 subject filed a claim in the Tel Aviv District Court against
DSW, claiming DSW does not supply subject with the adequate amount of potash,
and to rule it has to supply all of subject's needs.
On May 2011 250 of subject's workers went on strike on salaries issues,
which 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 November 2011, with severe damages for both sides (striking workers
did not receive salaries and activities in Haifa a plant halted from June 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 revoked subject's Toxic Permit,
and ordered to evacuate all the poisons and hazardous substances in the Haifa
plant, as well as the huge ammonia tank located in Haifa Bay. The Ministry
opened a criminal investigation against subject due to its failure to comply
with the order.
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.
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 June 2013 the Haifa District Court rejected the claim of 70 former
navy divers against subject and other parties. The divers claimed that they
developed cancer and other illnesses due to diving in the Kishon River.
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
CitiBank). 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.
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 ISO 9001, ISO 14001, OHSAS 18001 certified. Also GMP qualified
for food products.
Subject is a global leader in their field, holding 33% in the global share
of KNO3 for agricultural applications and 28% for industrial applications.
The global potassium market got into turmoil, following the exit of
URALKALI (the world's largest potassium manufacturer) from BELARUS POTASH COMPANY (the world's largest
potassium cartel) in July 2013.
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.
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$100
million, this until the planned construction of a private power plant in
subject’s premises. In 2011 EMG unilaterally decided to cease gas supply to
Israel (due to political motives), and in September 2011 subject was connected
to the alternative YAM TETHYS gas supplier.
From the Ministry
of Economy publication, total estimated revenues of the local Chemical &
Oils Industrial branch in 2012 amounted to NIS 120 billion (comprising some 30%
of Israel’s total industrial turnover), divided into: Refinery, Petrol &
Petrochemicals - NIS 55 billion; Pharmaceuticals - NIS 32 billion; Sub-branches
– NIS 22 billion (incl. industrial chemicals, pesticides & disinfections
materials, and fertilizers); Others – NIS 11 billion (incl. paints, cosmetics,
cleaning materials and other chemistry products).
The revenues were
generated from some 115 plants in the branch.
Sales for export
by the Chemicals Manufacturing Industry in 2014 reached US$ 10,971 million,
representing 2.4% decrease from 2013, after in 2013 export witnessed 18%
increase from 2012. In the first 7 months of 2015, a sharp decrease of 26% was
noted in the export by the local Chemicals industry.
According to
Central Bureau of Statistics data, investments in imported machinery &
equipment for the Manufacture of Chemicals & Chemical Products (excl.
for pharmaceuticals and refinery
manufacturing) in 2014 summed up to NIS 644.5 million, 11.8% decrease from 2013
(where 2013 saw 2.5% increase from 2012).
Good for trade engagements.
Maximum unsecured credit recommended up to several US$ million.
Note: Since February 2013
Israel Post has started using a new area code method of 7 digits (the old
method of 5 digits is no longer valid).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.66.38 |
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|
1 |
Rs.100.45 |
|
Euro |
1 |
Rs.70.55 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
TPT |
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 |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
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.