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MIRA
INFORM REPORT
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Report No. : |
489974 |
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Report Date : |
10.02.2018 |
IDENTIFICATION DETAILS
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Name : |
CARGAL FLEXIBLE PACKAGING LTD. |
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Formerly Known As : |
SIRON TRADING CO. LTD |
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Registered Office : |
Mishmar
Hasharon Industrial Zone, Mishmar Hashron 4027000 |
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Country : |
Israel |
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Financials (as on) : |
30.06.2015 |
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Date of Incorporation : |
30.01.1958. |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject engaged in Developers, manufacturers,
exporters and marketers of flexible packaging (printed packaging, made of
polyethylene, polyester and other plastic materials), specializing in
laminates production and printing for the foodstuff and beverage industries. |
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No. of Employees : |
758 |
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 : |
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
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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
CARGAL
FLEXIBLE PACKAGING LTD.
Telephone
972 73 240 24 00
Fax 972 73 240 24 01
Email:
dorit@plasto-sac.co.il
Mishmar
Hasharon Industrial Zone
MISHMAR
HASHRON 4027000 ISRAEL
HISTORY & LEGAL FORMATION
A private limited company,
incorporated as such as per file No. 51-017673-8 on the 30.01.1958.
Originally registered under the name SIRON TRADING CO. LTD., which changed
to CARGAL TRADING LTD. on the 28.11.1993.
Until end of 2001 subject
operated as exporters of parent's (CARGAL LTD.) products. Between the beginning
of 2002 till 31.05.2005 subject was dormant.
As of 01.06.2005 subject was
reactivated in its present form and line of business, completing 2
acquisitions:
1.
On 01.06.2005 of all business
activities of YENA (A.L.) INDUSTRIES LTD., a private limited company
established in 1999;
2.
On 03.07.2006 of all business
activities of A. GELLIS & SONS LTD., a private limited company established
in 1978 (originally founded in 1963).
On the 05.04.2005 subject changed its name to the present name.
SHARE CAPITAL
Authorized
share capital NIS 10,000.00, divided into -
10,000
ordinary shares of NIS 1.00 each,
of
which 213 shares amounting to NIS 213.00 were issued.
SHAREHOLDERS
Subject is a fully owned by PLASTO - CARGAL GROUP LTD.
(formerly PALSTO SAC LTD.), a public limited company, whose shares are traded
in the Tel Aviv Stock Exchange.
PLASTO - CARGAL is controlled
by:
1. C.I. CARDBOARD INDUSTRIES LTD., 46.8%, controlled by
QUICK PACK LTD. (19.5%, controlled by Gabi Nagar 54% and Ran Fridrich 25%),
A.B.N.D. INVESTMENTS LTD. (9%, owned by Nir Dor), Amiram Levinberg (9.75%),
Yehoshua Levinberg (9.75%), Menachem Raphael (9.75%) and several other small
investors from Israel and the USA,
2. TAMA INVESTMENTS AND FINANCE LTD.,
20.5%, fully owned by CLAL INDUSTRIES LTD. (CI in short), fully owned by AL DIVERSIFIED PARENT S.A R.L (part of
ACCESS INDUSTRIES Group), owned by Len Blavatnik,
3. THE PHOENIX Group, 11.3%, a financial group,
4. Manof Funds (I and II, aka BERESHIT Fund), 6.1%.
In
2007 CARGAL LTD. completed the acquisition of 68% of publicly traded company
PLASTO SAC LTD. (now PLASTO – CARGAL LTD.) from Motti Hershko and Oded Feller,
for NIS 122 million. In 2008, CARGAL LTD. increased its holdings in PLASTO SAC
to 79% (paying NIS 6.5 million), following which CARGAL LTD. merged subject
(then its fully owned subsidiary) into PLASTO SAC, based on company value of
NIS 155.5 million for subject, and later in 2008 CARGAL purchased PLASTO SAC
shares from the public, and reached 81.2%.
In August 2016 a transaction
took place, where PLASTO-SAC acquired 100% of CARGAL LTD. from CARGAL's
shareholders (CARGAL LTD. was practically merged into PLASTO-SAC), and
PLASTO-SAC's shares held by CARGAL (81%) were sold by CARGAL to its
shareholders (now PLASTO – CARGAL's shareholders), in consideration of NIS 83.9
million, in a move designed to improve the Group's
operating results, gaining on the synergy
effect.
In January 2018 the financial
Group THE PHOENIX invested NIS 18.5 million in PLASTO – CARGAL in consideration
of allocation of 11.3% in the company.
DIRECTORS
1. Gabriel
(Gabi) Nagar, General Manager, also of PALSTO - CARGAL,
2. Ophir
Ben-Yaakov, CFO of PALSTO - CARGAL.
MANAGEMENT
1.
Nery Nehoray, General Manager,
2.
Haim Weiss, Plant Manager.
BUSINESS
Developers, manufacturers, exporters and marketers of
flexible packaging (printed packaging, made of polyethylene, polyester and
other plastic materials), specializing in laminates production and printing for
the foodstuff and beverage industries.
Subject
is part of PLASTO-CARGAL's Flexible Packaging Segment, which includes also MOR
PLASTIC INDUSTRIES and SIVAN PLASTICS
INDUSTRIES.
42% of
the Flexible Packaging Segment's sales were for export in 2016.
Among clients are leading local industries in the
foodstuff field, e.g. STRAUSS-ELITE, OSEM, CENTREL BOTTLING CO. (Coca
Cola), JAFORA-TABORI, PHOENICIA GLASS WORKS, D.P.L. DISPOSABLE PRODUCTS, etc.
Among
local suppliers: DOR CHEMICALS, NIRY AGENCIES, etc.
Operating from rented premises (offices, warehouses
and plant), on an area of 19,430 sq.
meters, in the Mishmar Hasharon Industrial Zone, Kibbutz Mishmar Hasharon.
Having 758 employees serving
PLASTO-CARGAL Group, of which over 300 employees serving PLASTO-CARGAL's
Flexible Packaging segment.
MEANS
According to an evaluation of subject for PLASTO-CARGAL
(by IFS), subject was valued at NIS 127.7 million in August 2015 (was valued at
134.5 million on the 31.12.2014)
In
August 2016 PLASTO-CARGAL completed bonds issuance on the TASE, in two series,
raising total of NIS 92 million. This is part of the Group's strategy, which
included CARGAL LTD's merger, to improve their financial standing and market
value (while implementing streamlining program).
In
November 2017, a move of private placement initiated by main shareholder C.I.
CARDBOARD to raise NIS 37 million failed. Instead, THE PHOENIX financial group
and an institutional investor, invested NIS 18.5 million in consideration of
11.3% in PLASTO-CARGAL.
Subject's B/S (last obtainable,
as part of a/m evaluation):
NIS
(thousands)
31.12.2014 30.06.2015
ASSETS
Current assets
Cash
& cash equivalents 7,523 5,797
Customers 27,021 29,290
Other
debtors 1,152 2,016
Stock 29,245 33,921
64,941 71,024
Fixed assets, net 52,865 51,114
Intangible assets, net 58,850 59,062
176,656 181,200
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LIABILITIES
Current liabilities 66,610 72,724
Non-current liabilities 12,317 11,644
Equity 97,729 96,832
176,656 181,200
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Assets
attributed to PLASTO-CARGAL's Flexible Packaging Segment as of 31.12.2016 NIS
92,959,000 (NIS 186,501,000 as of 31.12.2015).
PLASTO-CARGAL
GROUP LTD. current market value is US$ 58.1 million.
There are 7 charges for unlimited
amounts registered on the company’s assets (all assets), in favor of Bank Leumi
Le'Israel Ltd., Bank Hapoalim Ltd., Union Bank of Israel Ltd., The
First International Bank of Israel Ltd., Mizrahi
Tefahot Bank Ltd. and Bank Otsar Hahayal Ltd. (last charge placed in March 2017, prior charge
placed August 2016).
Financial data is included in the consolidated financial
statements of parent company, PLASTO - CARGAL GROUP LTD., which shows:
NIS
(thousands)
31.12.2016 30.09.2017
ASSETS
Current assets
Cash
& equivalents and other financial assets 27,139 39,664
Customers 199,576 185,595
Other
debtors 13,497 15,833
Stock 191,564 197,645
431,776 438,737
Non-current
assets
Fixed
assets, net 406,558 425,805
Intangible
assets, net 77,138 76,023
Other non-current assets 2,892 2,491
486,079 504,319
917,855 943,056
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LIABILITIES
Current liabilities 382,312 442,166
Non-current liabilities 284,756 282,001
Equity 250,787 218,889
917,855 943,056
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REVENUES
Sales by the Flexible Packaging segment in PLASTO - CARGAL GROUP statements:
2015
sales were NIS 386,211,000, making an operating profit of NIS 6,079,000.
2016
sales were NIS 366,333,000, making an operating profit of NIS 3,762,000.
First
3 quarters of 2017 sales were NIS 273,329,000, making an operating profit of
NIS 2,564,000.
Subject's statement of income (last available):
NIS
(thousands)
Year
ended 31.12
2014 2013 2012
Sales 103,607 106,906 107,701
Gross profit 11,032 11,400 9,238
Operating profit 5,209 5,579 2,983
Profits (losses) before
taxes on income 2,561 2,099 (784)
Net profit (loss) 2,364 1,333 (763)
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Revenues for the first 6
months of 2015 were NIS 47,649,000, making a gross profit of NIS 3,464,000, an
operating income of NIS 429,000, and a net loss of NIS 895,000. Full
2015 sales unavailable.
Subject ended 2015 with a
net loss of NIS 5,375,000.
Subject ended 2016 with a
net loss of NIS 230,000.
PLASTO-CARGAL
GROUP LTD.
Consolidated
Statement of Income
NIS
(thousands)
Year
ended 31.12
2014 2015 2016
Revenues 775,792 768,784 747,066
Gross profit 90,103 98,124 93,822
Operating profit 9,545 16,648 11,275
Profits (losses) before
taxes on income (10,706) 1,775 (8,833)
Net profit (loss) (8,260) 2,443 (6,538)
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PLASTO-CARGAL
GROUP LTD. consolidated sales for the first 9 months of 2017 were NIS
562,562,000 (1% increase compared to parallel period in 2016), making a gross
profit of NIS 68,333,000, an operating loss of NIS 14,838,000, and a net
loss of NIS 31,108,000.
Main
reason for the loss is in the cardboard segment on the background of the shift
of CARGALLTD’s plant from Lod to Lehavim.
7/…
OTHER COMPANIES
PLASTO-CARGAL
GROUP LTD., parent company, designers, manufacturers, marketers and exporters
of packaging solutions in 2 segments: Corrugated
Cardboard segment and Flexible Packaging segment (subject’s).
Also
owns:
MOR PLASTIC INDUSTRIES LTD.,
100%, fully owns SIVAN PLASTICS INDUSTRIES
(1991) LTD., both are the Group's plastic flexible packaging
manufacturers, jointly with subject.
PLASTO
SAC (U.K.) LTD., 100%, marketing arm for U.K. and Ireland.
PLASTO-SAC IBERICA LTD., 100%, marketing arm for Spain and
Portugal.
PLASTO-SAC MEXICO S.A., 100%, marketing arm for Latin
America.
CARGAL
LTD., 100%, manufacturers and marketers of
corrugated cardboard boards and packaging. Also fully owns:
TRIPLEX CONTAINERS (2003) LTD., 100%, manufacturers
and marketers of wooden and cardboard containers and packaging,
CARGAL LEHAVIM LTD.
C.I. CARDBOARD INDUSTRIES LTD., a holding company, its
shareholders hold shares in several other companies.
CLAL INDUSTRIES LTD. (CI), a
holdings and investment company, with many holdings in various fields in the
local industry and trade (see more below), via many subsidiaries. CLAL 2014 consolidated revenues were NIS 5,773 million. There are other companies in CLAL INDUSTRIES Group.
THE PHOENIX
HOLDINGS LTD., heading THE PHOENIX Group, publicly traded (TASE), current
market value US$ 1,503 million, engaged in insurance via THE PHOENIX INSURANCE
CO. LTD., and in finance via prudential and trust funds, and via investment
house EXCELLENCE INVESTMENTS LTD.
BANKERS
Bank Hapoalim Ltd., Herzliya
Business Branch (No. 174), Herzliya, account No. 78889.
Bank Leumi Le’Israel Ltd., Principle
Branch Tel Aviv (No. 800), Tel Aviv, account No. 28623/22.
Mizrahi
Tefahot Bank Ltd., Tel Aviv Main Business Center Branch (No. 461), Tel Aviv,
account No. 423568.
A check with the Central Banks’
database did not reveal any negative information regarding subject’s a/m
accounts.
Union
Bank of Israel Ltd., Tel Aviv Main Branch (No. 63), Tel Aviv.
The
First International Bank of Israel Ltd., Holon Business Branch (No. 78), Holon.
CHARACTER AND REPUTATION
Nothing
unfavorable learned.
This
is a very long established business, though since the change in shareholding
structure subject changed the line of operation.
Subject
is ISO 9001:2008, ISO 22000 and HACCP certified.
PLASTO-CARGAL
Group is one of the 3 largest local flexible packaging manufacturers.
The recent merger transaction of CARGAL LTD. with PLASTO-CARGAL is part of the Group's strategy to improve their
financial standing (CARGAL LTD.'s being losing in recent years) and raise their
market value.
CARGAL
LTD., established in 1959, is
one of the 2 largest producers/ processors/ suppliers of corrugated board area. CARGAL has been in
process of shifting its manufacturing facilities from Lod in the country's
center to Lehavim (located in Southern Israel) in order to save costs.
On the
29.12.2013 CARGAL LTD. redeemed the remaining bonds which were held by the
public and converted into a private limited company.
CLAL INDUSTRIES LTD., is a leading holdings and investment
company, with holdings in various fields in the local industry and trade:
textile, cement, hi-tech, bio-technology, communications, real estate and other
industries.
In November 2013, following a successful tender offer for the
shares held by the public, AL DIVERSIFIED PARENT reached full ownership of CLAL
INDUSTRIES (had 49.9%), paying NIS 1.25 billion for the 50.1% of shares.
Len Blavatnik is a Russian-American tycoon, who via ACCESS
INDUSTRIES has many holdings in various industries (as well as via other
companies).
In 2005 subject acquired the activities of YENA (A.L.)
INDUSTRIES LTD., manufacturers of printed flexible packaging for industry and
agricultural products, in consideration of NIS 23 million.
In
2006 subject acquired all activities of the
veteran company A. GELLIS & SONS LTD., manufacturers of sophisticated
flexible packaging materials, mainly for the food and chemical industries, for
NIS 130 million. A. GELLIS & SONS was known as one of the leading companies
in the packaging field.
In 2008 CARGAL Group completed the acquisition of
TRIPLEX CONTAINERS (2003) LTD. for NIS 32 million. TRIPLEX was originally
founded in 1951.
During
2007 subject decided to close its second plant that was located in Ramla and to
transfer all its activities to the plant in Mishmar Hasharon.
According
to a market research firm published in mid-2014 (ordered by the Ministry of
Economy), total revenues of the local Plastic & Rubber Industry reached US$
5 billion, half of which was for export (which is comprised US$ 2.3 billion
from goods, the rest from raw products).
Sales
breakdown: 30% of the branch's sales are for the Household, 23% - Agriculture,
16% - Packaging, 9% - Building sector, 9% Industry, 5% Furniture, 4% -
Compounds (rest is to other fields).
According to the Central Bureau of Statistics (CBS),
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.
According
to the 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).
According to the CBS, sales for export from the
manufacturing of Plastic and Rubber products in 2017 rose by 7.1% from 2016,
summing up to US$ 2,204.6 million, which comes after 6.3% increase in 2016 and
7% decrease in export in 2015, each from the previous year.
SUMMARY
Notwithstanding
losses, considered good for trade engagements.
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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 64.37 |
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|
1 |
INR 89.71 |
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Euro |
1 |
INR 78.89 |
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ILS |
1 |
INR 18.25 |
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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VAR |
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Report Prepared
by : |
KET |
RATING EXPLANATIONS
|
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 |
|
B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
|
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.