Kitan Textile Industries Ltd. has decided to halt production at its Dimona plant at the end of the month, following mounting losses.
Kitan CEO Esther Eldan said, "We are currently making efforts to lease factory space to another industrial company in order to provide jobs for the workers whose employment in the factory will be terminated. In the past two years, we have already leased some of the factory space to two other companies in industry and logistics and many employees have been taken on by these companies."
She added, "After many years of heavy losses, we cannot continue production in the factory. I want to thank the employees who have worked in the factory for many years."
Eldan said that the textiles industry is enduring major hardship with labor and energy costs, and competition from imports leaving no room for a textiles industry in Israel. Kitan manufactures home textile goods including bedroom and bath products.
The owners policy prevented the closure of the factory for many years, but over the past two years the situation has deteriorated precipitously, and the company began to import products manufactured in Turkey and the Far East, like most Israeli textiles companies. Over the past year, the factory has only been operating at partial capacity, and this widened losses. The Dimona factory has 40 employees. Despite the losses the company will meet its commitments on welfare terms and full severance pay.
Kitan will continue employing 150 people in Israel and worldwide after production is halted. The company's retail chain in Israel and overseas operations under the Esprit brand will continue unaffected.
Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2012
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