"Service providers do not come to us, and the shopping centers are almost empty. People are hunkered down in their air-raid shelters, and even workers aren’t coming to stores. Many shopkeepers debated whether there was any point in opening their businesses today. Women in general preferred to stay at home with their children. There is a total lack of certainty. Only one thing is for sure, the banks don’t care and they will still demand their monthly payments from storekeepers," Beersheva Chamber of Commerce President Yossi Dluya told "Globes" today. He was responding to the latest escalation between Israel and the Gaza Strip over the past couple of days, which has cost businesses in the south millions of shekels.
"Service providers have suspended sending their people to the south, until the furies abate and life returns to normal. Malls are empty. The condition of small businesses in the Beersheva area was already bad, and 70% of them are in danger of closing. Each round of fighting, which occurs every 2-3 months, further damages our industry, causing heavy losses. No one in the government cares or does anything about it," Dluya added.
The Knesset Economic Affairs Committee today cancelled a planned tour of Sderot and the Ramat Hovav industrial zone today, due to the escalation and firing of Grad and Kassam rockets from Gaza toward Israeli cities in the south. The MKs were due to be briefed by Osem Investments Ltd. (TASE: OSEM) CEO Dan Propper and other executives who run the food company's production lines in Sderot. The MKs were then due to tour companies at Ramat Hovav, including Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) unit Teva Tech Ltd., to discuss economic issues facing manufacturers. The Knesset security officer forbade the MKs from carrying out the tour, which the committee said would be rescheduled soon.
Beersheva Chamber of Commerce general manager Arie Kleinman said, "This has become a ritual that is repeated every few weeks. We expect the government and the local authorities to help enterprises in their water and arnona (local property tax) payments, because enterprises cannot go on for days on end without income, while still being required to pay high taxes as in normal times. We support the IDF and the defense establishment, which are doing their jobs, but we expect to be considered too."
Manufacturers Association of Israel Southern Branch manager Arnon Kashenski told "Globes" that a review of members found little disruption among manufacturers in the south and little effect on production, despite the widespread rocket fire. Companies in range of Gaza-based rockets said that 90-95% of employees turned up for work, even though schools are closed. "Legally, the lack of childcare solutions under these circumstances is due cause for absenteeism, and I think that the workers know it. In an extreme case, a factory in Beersheva, 15% of employees were absent. Elsewhere, employees brought their children to work and found solutions for them on premises," he said.
Steel door maker Superlock Ltd., in Kiryat Gat, organized a play area and activities for children. CEO Avi Shaked said, "15% of the factory's employees were absent, due to the situation, and because the schools were closed. The numerous air raid sirens caused losses, as workers go to the shelters every time they are sounded, stopping the machinery. Automatic production lines were affected, and production has been delayed. This is already the fourth cycle of violence in the past year, and regrettably, we've gotten used to it."
500 manufacturers are located within rocket range from Gaza. These company exports total $6.5 billion a year. Updated Israel Export and International Cooperation Institute figures state that 317 enterprises export more than $50,000 of goods a year. These enterprises are in Ashdod, Ashkelon, Yavne, Kiryat Gat, Kiryat Malakhi, Beersheva, Sderot, Ofakim, Netivot, and other towns. The biggest exporters in this area are Teva, Intel Israel Ltd., Israel Chemicals Ltd. (TASE: ICL), and Makhteshim Agan Industries Ltd.. As in previous rounds of violence, the Export Institute has made its offices in Tel Aviv available to companies to handle their day-to-day operations.
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2012
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