Israel Land Development Co. (TASE: ILDC) has done very well from its investment and operations in Poland. The company's subsidiary MLP Group, in which it invested €1.5 million, 20 years ago, then had one logistics center on the outskirts of Warsaw. MLP now has 20 parks in Poland, Austria, Germany and Romania and is traded on the Polish Stock Exchange at a market cap of €330 million. Israewl Land Development Co.'s 41% stake is worth €140 million.
Israel Land Development Co. is the country's oldest real estate company founded in 1909, the year in which Tel Aviv was established. At the end of the 1980s businessman Yaakov Nimrodi bought the company and his son Ofer Nimrodi (65) has been CEO for many years. The Nimrodi family has a 54% stake in the company.
Because of the judicial reform in Israel, Poland has been mentioned frequently recently as a less democratic country. How much does this influence your business activities there?
"I am not involved in the political situation in Poland and certainly not an expert on the subject. The business system in the country works and is developed. The capital market there is active. In terms of a state of law, it is a very orderly country, with a low level of corruption. We manage to do a lot of business there. I cannot give marks to the system of government there."
Why have you focused on Poland
"Poland is a bridge and connection between Western and Eastern Europe. Not only in the physical sense, but also in doing business and culture. It is a country of law with Western education and it is very convenient to do business there. On the other hand, the cost of living and wages are significantly lower than the prices in Western Europe.
"Since the Covid virus, many production centers in China have been closed. Western companies have realized that if they don't build their production centers - it will be bad for them. That's why European companies rent logistics centers from us for assembly purposes in fields of industry. For example, all Fiat vehicle assembly centers are in MLP areas."
Even the Russia-Ukraine war has benefitted, Israel Land Development's Poland operations. I wish both sides to stop the war and the destruction," says Nimrodi, "In terms of business, an opportunity has arisen, where international companies do not want to build and establish things in Ukraine. There is a growing demand for activity on the Poland-Ukraine border, so that trucks and trains can quickly transport goods to the country. Therefore, there is a potential engine of growth here."
Published by Globes, Israel business news - en.globes.co.il - on March 22, 2023.
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