Israeli quartz countertop manufacturer Caesarstone (Nasdaq: CSTE) has announced a streamlining plan, in which veteran manufacturing plant on Kibbutz Sdot Yam, where it began production operations, will be closed down. Manufacturing activities will be transferred to other plants in Israel and worldwide. 100-120 employees at the Sdot Yam plant will lose their jobs. The company said it would provide retirement grants, held employees find new jobs and transfer some workers to other plants.
Caesarstone said that the streamlining plan will make the company's organizational structure and global manufacturing operations more efficient while reducing expenditure and optimizing production.
Yosef Shiran recently returned as CEO of Caesarstone, a position he held until 2016, replacing Yuval Dagim at a difficult time for the company. Caesarstone's share price has fallen 44% over the past year and is 93% below its peak in 2015. The company's market cap on Nasdaq is $162 million.
The latest layoffs follow a 10% cut in the company's workforce in December 2022 in which over 200 employees left. At the end of 2022, Caesarstone had 2,111 employees.
At the same time the company's management has taken a voluntary 10% pay cut. Caesarstone is controlled by the Tenne Fund and Kibbutz Sdot Yam.
Shiran said, "As a first major step in our restructuring plan, we have stopped production at our Sdot-Yam facility in Israel and are taking actions to permanently close the site. This difficult yet necessary step is expected to improve efficiencies, reduce costs and allow us to create a more agile company as we streamline our production. The Sdot-Yam facility is our oldest plant. Our remaining facilities combined with our network of third-party manufacturers provide us with adequate capacity and the flexibility to efficiently serve our customers. We are confident that our company can rise to its potential and we expect to deliver improved results in the years to come. We will continue to innovate, optimize our infrastructure, and enhance our competitive edge to improve our long-term growth and profitability."
Caesarstone today reported its financial results for the first quarter of 2023. Revenue was $151 million, down 11.6% from the corresponding quarter of 2022. The company reported a net loss of $3.8 million compared with a net profit of $6.2 million in the first quarter of 2022.
Published by Globes, Israel business news - en.globes.co.il - on May 10, 2023.
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