|
|
|
MIRA INFORM REPORT
|
Report No. : |
491012 |
|
Report Date : |
15.02.2018 |
IDENTIFICATION DETAILS
|
Name : |
HADERA
PAPER – PACKAGING PAPER AND RECYCLING
LTD. |
|
|
|
|
Formerly Known As : |
|
|
|
|
|
Registered Office : |
P.O. Box
142 (3810101) 1 Joseph Meizer Street Industrial Zone Hadera 3850018 |
|
|
|
|
Country : |
Israel |
|
|
|
|
Date of Incorporation : |
1951 |
|
|
|
|
Legal Form : |
Private limited company |
|
|
|
|
Line of Business : |
Manufacturers, exporters and
marketers of paper for packaging, which is used as raw materials for the
corrugated cardboard industry (for the industry, agricultural and food
sectors). |
|
|
|
|
No. of Employees : |
153 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
|
MIRA’s Rating : |
A |
|
Credit Rating |
Explanation |
Rating Comments |
|
A |
Acceptable Risk |
Business dealings permissible with moderate
risk of default |
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Slow but Correct |
|
|
|
|
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
|
Country Name |
Previous Rating (30.06.2017) |
Current Rating (30.09.2017) |
|
Israel |
B1 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low Risk |
A2 |
|
Moderately Low Risk |
B1 |
|
Moderate Risk |
B2 |
|
Moderately High Risk |
C1 |
|
High Risk |
C2 |
|
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.
|
Source
: CIA |
Company
name and address
HADERA PAPER – PACKAGING PAPER AND
RECYCLING LTD.
Telephone 972 4 634 93 49; 634 97 30
Fax 972
4 633 36 74; 634 92 41
P.O. Box 142 (3810101)
1
Joseph Meizer Street
Industrial Zone
HADERA 3850018 ISRAEL
HISTORY
& LEGAL FORMATION
Originally established as a division in
HADERA PAPER LTD. (established in 1951).
Following reorganization in parent
company, converted into a private limited company and registered as such as per
file No. 51-224699-2 on the 21.12.1995.
Originally registered under the name
AIPM PAPER MANUFACTURER (1995) LTD., (AIPM stands for AMERICAN ISRAELI PAPER
MILLS) which changed to AIPM PAPER INDUSTRY (1995) LTD. on the 17.07.1996,
which changed to HADERA PAPER INDUSTRIES LTD. on the 10.08.2008, which changed
to the present name on the 20.06.2010.
SHARE
CAPITAL
Authorized share capital NIS 28,000.00,
divided into -
28,000 ordinary shares of NIS
1.00 each,
of which 100 shares amounting to NIS
100.00 were issued.
SHAREHOLDERS
Company is fully owned by HADERA PAPER LTD., a public limited company, shares of which are traded on the Tel Aviv
Stock Exchange (TASE), controlled (59.1%) by FIMI INVESTMENT FUND (via FIMI
FIVE 2012 LTD.), headed by Ishay Davidi.
In August 2015, FIMI Fund acquired the
holdings of CLAL INDUSTRIES LTD. in HADERA
PAPER LTD. (59.1%, which CLAL
acquired from I.D.B. HOLDING CORP. in July 2012 and in March 2013) for NIS 354.55 million.
DIRECTORS
1. Gadi Cunia, General Manager of HADERA PAPER,
2. Lior Haalman, CFO of HADERA PAPER,
3. Ms. Anat
Rothschild, Legal Counselor of HADERA PAPER.
GENERAL MANAGER
Guy
Yadlin
BUSINESS
Manufacturers, exporters and marketers
of paper for packaging, which is used as raw materials for the corrugated
cardboard industry (for the industry, agricultural and food sectors).
Subject heads the Packaging Paper &
Recycling Segment of HADERA PAPER.
Around 9% of sales in 2016 were for
export (around 6% in 2015).
Main customers: CARMEL FRENKEL (sister company, 33% of sales), CARGAL, I.M.A. 1990, BEST CARTON,
ORDA PRINT INDUSTRIES.
The paper materials for production are
produced from recycled paper waste. Among main suppliers: AMNIR (sister
company), GALAM.
Operating from HADERA PAPER Group
premises (headquarters offices, plants, warehouses), mostly owned by the Group
and the rest leased for very long term from the State, on total area of 273,000
sq. meters, in 1 Joseph Meizer Street, Industrial Zone, Hadera. The Group is
also operating from logistics center, on a built area of 21,300 sq. meters (on
75,000 sq. meters plot, rented), in Modi'in Industrial Zone, and from several other facilities in
the country.
Having 153 employees in Packaging Paper & Recycling Segment.
Having 1,521 employees serving
HADERA PAPER Group as of end of 2016 (had 1,682 employees in the Group in the
end of 2015).
Note: Current number of employees expected to be updated with
the publication of HADERA PAPER's 2017
financial statements by the end of March 2018.
MEANS
Financial data is included in the
consolidated statements of the parent company HADERA PAPER LTD., which shows:
NIS
(thousands)
31.12.2016 30.09.2017
ASSETS
Current
assets
Cash
and cash equivalents 332,623 298,208
Short
term deposits 221,464 283,229
Customers
514,565 514,916
Other
debtors 49,305 37,576
Stock 182,487 185,463
1,300,444 1,319,392
Non-current assets
Fixed
assets (net) 903,226 882,861
Intangible
assets 10,292 19,605
Other
non-current assets 57,880 51,007
971,398 953,473
2,271,842 2,272,865
======== ========
LIABILITIES
Current liabilities 721,801 710,080
Non-current liabilities 555,287 526,342
Equity and minority rights 994,754 1,036,443
2,271,842 2,272,865
======== ========
Parent company
HADERA PAPER current market value US$ 414.2 million.
In
2010, 2013 and 2014 HADERA PAPER raised total sum of NIS 458 million issuing bonds
on TASE. In February 2017 S&P
raised HADERA PAPER rating from A to A+, with a stable forecast.
Data from HADERA PAPER financial statements as of
31.12.2016 attributed to the
Packaging Paper & Recycling Segment (in brackets 31.12.2015): total assets NIS
752.9 million (NIS 760.9 million), liabilities NIS 67.2 million (NIS 82.9
million).
There are no charges registered on the
company's assets.
REVENUES
HADERA PAPER LTD.
Consolidated
Statement of Income:
Year
ended 31/12
NIS
(thousands)
2014 2015 2016
Sales 1,757,362 1,741,442 1,643,089
Gross
profit 168,250 227,779 226,219
Operating
income (loss) (112,276) 386,873 55,253
Profit
(loss) before income taxes (160,273) 324,195 9,045
Net
income (loss) (155,574) 196,686 12,469
======== ======== ========
The loss in 2014 is mainly
due to the decrease in value of the Printing and Writing Paper and Paper Waste Collecting and Processing segments, as well as loss from Turkish subsidiary.
The sharp drop in the prices of paper
– packaging, printing and writing paper – is the
main cause for decrease in income and profit margins.
HADERA PAPER LTD. consolidated revenues for the
first 9 months of 2017 were NIS 1,230.67 million, making a gross profit of NIS
197.69 million, an operating income of NIS 74.95 million, and a net income of
NIS 38.3 million.
Sales (to outside clients and inter
segment sales) by Packaging Paper & Recycling Segment in HADERA PAPER Group
(attributed to subject):
2014 - NIS 532.73 million
(284 thousand tons), with operating profit of
NIS 76.98 million.
2015 - NIS 530.24 million
(289 thousand tons), with operating profit of
NIS 30.43 million.
2016 - NIS 453.63 million
(273 thousand tons), with operating profit of
NIS 16.65 million.
First 9 months of 2017 - NIS
355.28 million, with operating profit of
NIS 28.48 million.
Subject ended 2014 with a net loss of NIS 4,037,000.
Subject ended 2015 with a net profit of
NIS 11,298,000.
Subject ended
2016 with a net loss of NIS 13,304,000.
OTHER
COMPANIES
HADERA PAPER LTD., established 1951, itself and
via subsidiaries operating in the paper branch and others, in 4 following
segments, on top of subject's segment (total of 5 segments):
1) Cardboard,
corrugated, packaging products (CARMEL Group),
2) Paper
Waste Collecting and Processing, mainly via AMNIR,
3) Office
supplies (mainly via GRAFFITI),
4) Writing
paper and printing paper (newsprint, etc.) – itself.
Main subsidiaries (100% unless otherwise stated):
CARMEL FRENKEL IND LTD., 94%, designers,
manufacturers, exporters and marketers of cardboard and packaging products, as
well as wide format digital printing for advertising displays. Fully
owns FRENKEL C.D. LTD., designers,
manufacturers and marketers of packaging products for consumer products, mainly
from cardboard.
GRAFFITI OFFICE
SUPPLIES AND PAPER MARKETING LTD., heads the Office Supplies Segment. Also
fully owns ATTAR MARKETING OFFICE
SUPPLY LTD. and KLAF HOBIRON LTD.KLAF HOBIRON LTD., importers, marketers, distributors and sppliers of office
supplies, equipment and furniture, stationery, paper, etc.
AMNIR RECYCLING INDUSTRIES LTD., collectors and
recyclers of paper, plastic, and more, as well as providing allied services.
HADERA PAPER - PRINTING
& WRITING PAPER MARKETING LTD., writing paper and printing paper
activities were transferred to HADERA
PAPER LTD.
FIMI FUND has many other investments - see below
CHARACTER.
ANKERS
According
to our records (we could not speak to subject's officials, therefore unable to
confirm the bank data):
Israel Discount Bank Ltd., Main
Branch (No. 10), Tel Aviv.
Bank Hapoalim Ltd., Business
Central Branch (No, 600), Tel Aviv.
CHARACTER
AND REPUTATION
Nothing unfavorable learned
Despite
our efforts, we were unable to speak with subject's officials, as they were
always unavailable.
HADERA PAPER Group went through several difficult
years of crisis (since 2011), which resulted in several re-organization and
streamlining processes (in fact, a long on-going process), including change in
ownership, change in top management, structural change (sale of noncore
segments TRI-WALL, HOGLA – KIMBERLY and ADVANCED INTEGRATED ENERGY - see more below), financial and liquidity
problems. The Group as a whole suffered from several factors, including high
energy costs in 2011/2/3 (usually not compensated by prices raise due to
competition), the unfavorable economic
environment, depreciation of the Dollar against the local currency and other
factors, thus the Group's financial
performance deteriorated, and more.
Facing liquidity distress (including payments to bonds
holders), led the Group to take extensive streamlining measures,
including lay-offs (which led to working dispute and even short strike,
resolved in December 2013).
Also as part of the recovery process, in December 2015
all activities of HADERA PAPER - PRINTING & WRITING PAPER (hereafter HADERA
PAPER PWP, manufacturing, processing, trading and marketing of writing,
photocopying and printing paper) were merged into HADERA PAPER.
HADERA PAPER was part of the
CLAL Concern, which part of its re-organization sold its holdings in HADERA
PAPER to the local leading equity fund FIMI. Founded in 1997, FIMI Fund (mainly
via 6 funds), is a leading local private equity investment fund (mezzanine and
buy-out fund), headed by its founder and CEO Ishay Davidi (other senior
partners are Gillon Beck and Ron Ben-Haim). Its 6th fund established
in 2016 and raised US$ 1.1 billion.
FIMI invests in traditional
industry companies with growth potential overseas. Having a successful track
record of 78 major transactions (48 cash exits) and NIS 11 billion in assets
managed. Presently, the Fund has more than US$900 million equity available for
new investments. FIMI investors list includes leading US and Israeli
institutional investors (in Israel includes all largest financial institutions,
i.e. banks, insurance companies and provident & pension funds).FIMI
investors list includes leading US and Israeli institutional investors (in
Israel includes all largest financial institutions, i.e. banks, insurance
companies and provident & pension funds). Preqin, the alternative assets
industry’s leading source of data and intelligence, ranks FIMI as one of the
top funds worldwide in terms of long-term return for investors.
The recent recovery process, coming with the entrance
of FIMI Fund as investors, included also raising capital, synergy steps, the
sale of real estate assets, equipment and further layoffs, which allowed
subject to meet its payments to bond-holders.
As part of Group's re-organization, AMNIR’s activities
were separated from the Packaging Paper & Recycling Segment, and put in its
own segment.
HADERA PAPER is the leading company in the paper
production and supply field in Israel, holding a market share of 65% of paper
recycling market.
The volume of local packaging paper consumption has
not changed in recent years according to the Group's estimations, standing on
circa 365 thousand tons per annum in average, of which some 63% from recycled
paper. The estimated market share of the Group in the area of packaging paper
sales used as raw material for the local card industry is 60%.
Subject's
sister company CARMEL FRENKEL is the largest
local producer of paper-based packaging.
HADERA PAPER Group is ISO-9001:2000, ISO-14001 and
ISO-18001 certified.
In 2010 subject started
full operation of a new "brown paper" production line for cardboard
production designed to increase production capacity by 50% (to 230 tons per
annum) and replace imported paper also with local recycled paper collected. The
project, with investment of NIS 700 million, included the erection of a new
plant on an area of 20,000 sq. meters and a 5-story building.
As part of HADERA PAPER's re-organization after FIMI's
entrance as an investor, in December 2015 all activities of HADERA PAPER PWP
(manufacturing, processing, trading and marketing of writing, photocopying and
printing paper) were sold to HADERA PAPER, and HADERA PAPER PWP was voluntarily
liquidated as of 31.12.2015.
HADERA
PAPER Group started to utilize natural gas for its plants in mid-2007,
replacing conventional fuels. In parallel, HADERA PAPER started to build its
own private power station. A major move for electricity cost reduction occurred
in the first half of 2103 when the Group started the usage of natural gas from
the "Tamar" reservoir.
In
August 2015 HADERA PAPER completed the
sale of all its shares (100%) in ADVANCED INTEGRATED ENERGY LTD. (holding
the rights for erection of a natural gas power plant, including signed natural
gas supply agreements and equipment) for NIS 60 million.
In March 2015, HADERA PAPER sold all its holdings (49.9%) in HOGLA - KIMBERLY LTD.
(manufacturers, exporters and marketers of household paper products) to
KIMBERLY CLARK CORP, for NIS 648 million, thus exiting HOGLA – KIMBERLY's
loosing Turkish company KCTR. The sale designed to enable HADERA
PAPER to meet its bond payments.
According
to the Central Bureau of Statistics (CBS), import of paper (as raw materials
for the Paper industries) to Israel in 2017 amounted to US$ 737 million, 4%
increase from 2016 (or 2.5% decrease in NIS terms to NIS 2,653 million),
compared to US$ 708.5 million, US$ 686 million & US$ 781 million, in 2016,
2015 & 2014, respectively.
From
the CBS data, in 2017 sales for export by local manufacturing of paper and
paper products totaled US$ 190.7 million, compared to US$ 214.7 million, US$
192.7 million & US$ 209.7 million in 2016, 2015 & 2014, respectively.
The
local industry investments (in current prices) in imported machinery and
equipment by the Paper & paper products industry in 2016 increased by 32%
to NIS 106.4 million (after dropping by 47% in 2015 and after 44% rise in
2014).
SUMMARY
Good
for trade engagements.
Maximum
unsecured credit recommended US$ 500,000.
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 |
INR 64.13 |
|
|
1 |
INR 89.17 |
|
Euro |
1 |
INR 79.39 |
|
ILS |
1 |
INR 18.16 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
|
Analysis Done by
: |
VAR |
|
|
|
|
Report Prepared
by : |
TRU |
RATING EXPLANATIONS
|
Credit Rating |
Explanation |
Rating Comments |
|
A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
|
A+ |
Low Risk |
Business dealings permissible with low
risk of default |
|
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 |
|
D |
High Risk |
Business dealing not recommended or on
secured terms only |
|
NB |
New Business |
No recommendation can be done due to
business in infancy stage |
|
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.