Smaller IDF procurements from Israeli textile companies have cost the industry 300 jobs in recent months. Textile industry sources defined the situation as, "A plunge in Ministry of Defense and IDF orders from Israeli industry."
The cut in the defense shekel budget has caused the defense establishment to divert procurements in recent years from local industry to the US, using US military aid.
Nazareth-based Achidatex has cut its workforce from 90 to 60, and will lay off 12 more employees this month. The company attributes the lay-offs to the drop in orders from the Ministry of Defense.
Achidatex makes tents, flack jackets, webbing, packs, vehicle covers, and covers for dry storage. Achidatex is owned by general manager Avraham Hatzor and Defense Industries International (OTCBB:DFNS), which also has a stake in Export Erez.
Owners and managers of Israeli textile companies that manufacture goods for the defense establishment said they had recently met officials from the Ministries of Defense and Finance in an effort to restore orders lost due to budget cuts. They claim that the Ministry of Defense said it could do nothing. "The defense establishment chiefs are signalling distress. They lack the resources to finance procurements, due to the Ministry of Finance budget cuts," one manager told "Globes".
Other plants that have cut the workforces due to reduced procurements include Export Erez, based in Netivot and the Erez Industrial Zone; Beit She'an-based Rabintex Industries; and Gush Etzion-based Einat Tech..
Hatzor estimates that Ministry of Defense and IDF budget for textile products has been slashed from $60-70 million a year to only $4-5 million.
Published by Globes [online] - www.globes.co.il - on August 11, 2003