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MIRA
INFORM REPORT
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Report No. : |
489473 |
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Report Date : |
07.02.2018 |
IDENTIFICATION DETAILS
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Name : |
METZERPLAS INDUSTRIES LTD. |
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Registered Office : |
Mobile Post Hefer, METZER 3882000 |
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Country : |
Israel |
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Financials (as on) : |
31.12.2016 (consolidated) |
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Date of Incorporation : |
1974 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject is engaged in Designers and manufacturers of plastic
and irrigation systems, mainly for the agricultural market, specializing in
drip irrigation and in “Super Pipe” (SP) pipes. Also manufacturers of plastic
pipes for sanitary installation, industry, telecommunications |
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No. of Employees : |
181 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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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
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Country Name |
Previous Rating (30.06.2017) |
Current Rating (30.09.2017) |
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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 Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
ISRAEL - ECONOMIC OVERVIEW
Israel has a technologically advanced free market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among its leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are offset 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 weathered the 2011 Arab Spring because strong trade ties outside the Middle East insulated the economy from spillover effects.
Slowing domestic and international demand and decreased investment resulting from Israel’s uncertain security situation reduced GDP growth to an average of roughly 2.8% per year during the period 2014-17. 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 in the last decade. Political and regulatory issues have delayed the development of the massive Leviathan field, but production from Tamar provided a 0.8% boost to Israel's GDP in 2013 and a 0.3% boost in 2014. One of the most carbon intense OECD countries, Israel generates about 57% of its power from coal and only 2.6% from renewable sources.
Income inequality and high housing and commodity prices continue to be a concern for many Israelis. 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. Government officials have called for reforms to boost the housing supply and to increase competition in the banking sector to address these public grievances. Despite calls for reforms, the restricted housing supply continues to impact the well-being of younger Israelis seeking to purchase homes. Tariffs and non-tariff barriers, coupled with guaranteed prices and customs tariffs for farmers kept food prices high in 2016. Private consumption is expected to drive growth through 2018 with consumers benefitting from low inflation and a strong currency.
In the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultraorthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only about 8% of the workforce, with the rest mostly employed in manufacturing and services - sectors which face downward wage pressures from global competition. Expenditures on educational institutions remain low compared to most other OECD countries with similar GDP per capita.
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Source
: CIA |
Company name and address
METZERPLAS INDUSTRIES LTD.
Telephone 972 4 638 70 01
Fax 972 4 638 53 85
Email: sp_office@metzerplas.com
Mobile Post Hefer
METZER 3882000 ISRAEL
HISTORY & LEGAL FORMATION
Originally established as a limited
partnership in 1974, registered as per file No. 55-000261-2 under the name
METZERPLAS (1974) LIMITED PARTNERSHIP (which later changed its name to METZER
SETTLEMENT, LIMITED PARTNERSHIP).
Following a decision to separate trade and marketing from
manufacturing, the owners registered subject as a private limited company as
per file No. 51-161346-5 on the 20.10.1991 (established under the name KOHAV
HAMA’ARAV LTD., and changed to the present name on the 23.02.1993).
The company took over manufacturing, whereas
the partnership carried on marketing activities. In the beginning of 2006, a
new agricultural cooperative society (ACS) was established called METZERPLAS
COOPERATIVE AGRICULTURAL ORGANIZATION LTD., which assumed the trade and
marketing activities from the partnership (subject remaining the manufacturing
arm), and all also known as METZERPLAS Group.
SHARE CAPITAL
Authorized share capital NIS 17,600.00,
divided into -
17,600 ordinary shares of NIS 1.00 each,
of which 1,500 shares amounting to NIS 100.00
were issued.
SHAREHOLDERS
Subject is fully owned by METZERPLAS HOLDINGS
LTD., owned by METZERPLAS COOPERATIVE AGRICULTURAL ORGANIZATION LTD.
(METZERPLAS CAO, or METZERPLAS).
METZERPLAS CAO is owned by:
1. Kibbutz Metzer, 74.9%, a co-operative
society operating a communal agricultural settlement,
2. GAON AGRO INDUSTRIES LTD., 25.1%, fully owned by
GAON GROUP LTD. (formerly MIDDLE EAST TUBE COMPANY LTD., a.k.a METCO), a public
limited company, whose shares are traded on the Tel Aviv Stock Exchange (TASE),
controlled (67.4%) by B. GAON HOLDINGS LTD., publicly traded on TASE, controlled (58.8%)
by VIOLA
P.E.G.P LTD., of VIOLA PARTNERS private equity fund, part of VIOLA Group (controlled by Shlomo Dovrat, Avi Zeevi and Harel
Beit-On), by Moshe Gaon (14.2%, partly with Gaon Family), AINSBURY
PROPERTIES LTD. (10.5%) and Uri David
(6.6%).
DIRECTORS
1. Hugo Chaufan, Chairman of METZERPLAS CAO,
2. Shmuel
Schupak, General Manager,
3. Doron
Lieber,
4. Guy
Regev,
5. Arie
Weisberg,
6. Danny
Hoffman,
7. Omri
Shoham,
8. Oded
Brass.
BUSINESS
Designers and manufacturers of plastic and
irrigation systems, mainly for the agricultural market, specializing in drip
irrigation and in “Super Pipe” (SP) pipes. Also manufacturers of plastic pipes
for sanitary installation, industry, telecommunications, etc.
During 2016
subject utilized 70% of its production capacity.
Marketing activities are carried via
METZERPLAS CAO and via SP METZERPLAS MARKETING LTD. Some 55% of METZERPLAS' 2016 sales were for export.
Purchases are from import and local
suppliers.
Amongst local suppliers: KAST SILICONE, WITT
PLASTIC AND ENGINEERING, SU-PAD, RIMONI PLAST, POLYRAM PLASTIC INDUSTRIES,
SORPOL, etc.
Operating from leased premises (offices,
plant, warehouses), on an area of 20,000 sq. meters (owned by METZER SETTLEMENT
LP, owned by Kibbutz Metzer), in Kibbutz Metzer. Premises serve METZERPLAS
Group.
Note: "Kibbutz" is a typical local cooperative agricultural
settlement/ village.
Having 181 employees in METZERPLAS as of end of 2016 (had 179 employees
in the end of 2015).
MEANS
METZERPLAS was valued at NIS 128.3 million by GAON
AGRO INDUSTRIES for the
acquisition of 25.1% of METZERPLAS in the transaction completed in January 2007
(NIS 32.2 million were for shares and NIS 1.32 million as owners’ loan).
GAON GROUP LTD. current market value US$
64.85 million.
METZERPLAS's 2016 R&D expense NIS 1.7
million (NIS 1.2 million in 2015, NIS 1 million in 2014 and 2013).
METZERPLAS holds stock in volume of 60 days for local sales.
Subject is an
“Approved Enterprise” and as such entitled for State support, grants and tax
relief. In 2009 the Israeli Investment Centre (IIC) approved NIS 1.2 million
grant for the expansion of subject’s plant.
There are 6 charges for unlimited amounts
registered on the company's assets (all assets), in favor of the State of
Israel, The First International Bank of Israel Ltd., Bank Leumi Le’Israel Ltd.
and a company. Last charge placed in 2016 on equipment.
Financial
Financial data is included in the
consolidated B/S of METZERPLAS CAO LTD., which shows:
NIS
(thousands)
30.12.2015 31.12.2016
ASSETS
Current assets
Cash and cash equivalents 34,088 34,705
Other financial assets 5,404 5,532
Customers 89,708 95,769
Other debtors 5,786 13,843
Other assets 1,864 1,002
Stock 59,395 73,633
196,245 224,484
Non-current
assets
Fixed assets (net) 64,267 66,967
Other non-current assets 3,951 5,074
68,218 72,041
264,463 296,525
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LIABILITIES
Current
liabilities 104,424 104,582
Non-current liabilities 54,260 70,026
Equity 105,779 121,917
264,463 296,525
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Data from METZERPLAS CAO LTD. B/S as of
30.09.2017:
Current assets: NIS 234,890,000; Non-current
assets: NIS 79,500,000
Current liabilities: NIS 112,105,000;
Non-current liabilities NIS 70,872,000
Equity: NIS 123,106,000
REVENUES
METZERPLAS CAO
LTD.
Consolidated
Statement of Income
NIS
(thousands)
Year
ended 31.12
2014 2015 2016
Revenues 238,907 241,617 309,484
Gross profit 60,276 61,200 98,739
Operating profit 17,589 14,386 30,181
Profits before taxes on income 16,111 11,409 26,182
Net profit 11,702 10,184 20,172
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Consolidated revenues of METZERPLAS CAO
LTD. for the first 9 months of 2017 were NIS 239,367,000 (2% decrease compared
to the parallel period in 2016), making a net profit of NIS 16,878,000.
OTHER COMPANIES
METZERPLAS COOPERATIVE AGRICULTURAL
ORGANIZATION LTD., heading METZERPLAS Group, also owns:
SP METZERPLAS MARKETING LTD., 51%, marketing of the
products of METZERPLAS' SP (“Super
Pipe”) Div. - a combination of metal and plastic in one
pipe, as well as allied products.
METZERPLAS IRRIGACION S.A, 100%, marketers in
Argentine,
DURA-LINE (ISRAEL) LTD., 100%, manufacturers
and marketers of telecommunication tubes and conduits in Israel,
METZERPLAS AUSTRALIA PTY. LTD., 100%,
marketers in Australia,
IRRIGATOR
INVESTMENTS INC, 51%, of Cyprus,
holds IRRIGATOR UKRAINE INC, Ukraine, operating in the irrigation field in
Eastern Europe.
METZERPLAS MEXICO S.A.P.I., 51%, marketers in
Mexico.
IRRIGATION INDUSTRIES CO. LTD., 28%, China,
an irrigation company.
SP SLIDE RUSSIA, 50% (additional 50% held by
affiliated company SAGIV), marketing METZERPLAS's products in
Russia.
METZERPLAS HOLDINGS LTD.
Kibbutz Metzer also controls:
METZER AUTO SERVICES, a garage and tinsmith
works,
METZER SETTLEMENT, LIMITED PARTNERSHIP,
holding real estate (where subject is operating from in Kibbutz Metzer.
GAON GROUP LTD. (formerly METCO),
directly and mainly via subsidiaries, manufacturers, importers and marketers of
steel pipes for various uses, including water and sewage pipelines, onshore and
offshore oil and gas pipes, and pipes for general uses in construction,
agriculture and civil engineering. Total B/S as of 31.12.2016 NIS 626.9
million, equity NIS 263.6 million; 2016 consolidated revenues NIS 397.5
million, net profit NIS 21.4 million. Holds:
GAON AGRO
INDUSTRIES LTD., a holding company, controls companies in the water sector and
industries and water infrastructure, holds:
HAKOHAV METAL VALVES INDUSTRIES (1987) LTD.,
97.5%, manufacturers,
exporters and marketers of valves for industry and agriculture. Fully owns MADEY VERED LTD.
A.T.C. SUPPLY (1993) CO. LTD., 49.9%.
SAGIV AGRICULTURE
COOPERATIVE SOCIETY LTD., 50%, developers, manufacturers, exporters and marketers
of a wide line of faucets, valves and fittings for installation, holds 50% of PAL-YAM SAGIV
A.C.S LTD., importers of installation products.
GAON WATER
SOLUTIONS COMPANY (G.W.S) LTD., 100%,
MIDDLE EAST TUBE - INDUSTRIES 2001 LTD.,
GAON GROUP's main tubes manufacturing company, holds:
MIDDLE EAST TUBE
GALVANIZATION (1994) LTD., 100%,
PLASSIM INFRASTRUCTURES LTD., 71%,
manufacturers of PVC and polyethylene pipes and accessories for the
infrastructure field, holds 85% in TASHTIOT HADAROM P.H.S. LTD. and 51% in PALGAL
PLASTIC INDUSTRIES ACS LTD., manufacturers of plastic extrusion products.
B. GAON HOLDINGS
LTD.,
a
holding company involved in 2 lines of activities: 1), A/m GAON GROUP
activities and 2) Retail and Trading, headed by B. GAON RETAIL & TRADING LTD., sales,
distribution and marketing of agricultural products. Current market value US$
41.9 million.
BANKERS
According to our
records (as subject’s officials did not disclose data, we are unable to verify
the u/m bank details):
Bank Leumi
Le'Israel Ltd., Hadera Business Branch (No. 639), Hadera.
The First International Bank of Israel Ltd.,
Hadera Branch (No. 27), Hadera.
CHARACTER AND REPUTATION
Nothing unfavorable learnt.
METZERPLAS is among the leading developers of
irrigation systems in the world.
Subject is ISO 9001:2015 certified.
In 2002, the Jerusalem District convicted 3 companies
(and their managers) in forming an illegal cartel in the electricity piping
field during 1994. Among the convicted were METZERPLAS LIMITED PARTNERSHIP
(1974), and were sentenced with fines.
Kibbutz Metzer, established in 1952, has some
150 members. Also cultivates a large area of agricultural land, including field
crops, fruit plantation (avocado, bananas, olives, persimmon), operating dairy
farming, poultry, etc.
B. GAON HOLDINGS
Group
was founded in late 1990s by the Late Benjamin (Benny) Gaon, who passed away in
2008,
and control moved to his son, Moshe Gaon. Moshe Gaon gave up control to the
VIOLA Fund (described below), as part of the GAON group's recovery strategy
plan.
B. GAON HOLDINGS encountered
financial difficulties several years ago, mainly due to the collapse of ACE DIY
chain in first half of 2012. In order to meet B. GAON's debentures payment, in May 2013 VIOLA
Fund fueled NIS 70 million and gained control over B. GAON.
GAON AGRO INDUSTRIES is one of the local
leading companies in the agro-industry and water related industries.
GAON GROUP (METCO) is a local leading pipelines
supplier.
VIOLA Group, founded by Shlomo
Dovrat and Avi Zeevi in year 2000, with over US$ 2 billion under
management, is a local leading private equity investment group. VIOLA Group
includes: VIOLA PRIVATE EQUITY - technology focused growth capital and buyout
fund, VIOLA CREDIT (formerly PLENUS) – an equity-based lending fund; CARMEL
VENTURES VC Fund – investment in Israeli or Israeli related early stage companies;
and VIOLA PARTNERS (formerly DPartners) – an exclusive
investment fund mainly for private investors.
According to the
Central Bureau of Statistics (CBS), import of Plastic and Rubber raw material for
the local industry totaled US$ 2,544 million in 2017, 10.7% rise from 2016 (that in US$
terms, marked 3.6% rise in NIS terms). In 2016 import rose by 4% from 2015,
after 12% decrease from 2014.
Plastic &
rubber raw materials consumption by the local industry is of around 1 million
tons, 70% of which derives from import, the rest from local production (which
is comprised mainly of simple raw materials).
Investment in imported machinery and equipment by the Plastic &
Rubber industries in 2016 totaled at NIS 525.2 million, marking 13.8% increase
from 2015, after 13.2% increase in 2015 and 5.2% increase in 2014.
SUMMARY
Notwithstanding the
refusal to update details, considered good for trade engagements.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 64.72 |
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1 |
INR 89.72 |
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Euro |
1 |
INR 79.52 |
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ILS |
1 |
INR 18.41 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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NIY |
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Report Prepared
by : |
KET |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.