Emilia Cosmetics closing Yeruham factory

Emilia workers Photo: Histadrut
Emilia workers Photo: Histadrut

The company says that the factory, which employs 250 people in the Negev town, is making losses.

Emilia Cosmetics, of the Emilia Development (OFG) Ltd. (TASE:EMDV) group, reported this morning that it will close its factory in Yeruham, which employs some 250 people. The company explained the decision by "negative trends that have characterized the recent past and that have worsened in the past few months, causing erosion of the operating profit of the Yeruham factory and leading to losses."

Among the factors mentioned by Emilia Cosmetics' management are: a decline in production volumes at the Yeruham factory because of growth in competing imports; erosion of selling prices in the local market; rising prices of inputs; tougher Israeli regulation in comparison with similar factories overseas; and the cost of labor agreements.

Emilia Development states in its notice to the Tel Aviv Stock Exchange this morning that it expects to record a one-time loss of NIS 25 million as a result of the decision to shut down its activity in Yeruham.

Emilia Cosmetics' workers declared a labor dispute three weeks ago, claiming that the company's management was dragging its feet in negotiations on a collective agreement with them. The employees are represented by the National Labor Federation. In its stock exchange notice, Emilia states: "Out of sincere concern for the employees at the site and their future, the company has proposed to the employees' representative body that it should enter into negotiations immediately to agree the terms of the site's closure."

Separately, the Beer Sheva District Court yesterday dismissed the petition of the workers at the Harsa sanitary fixtures factory in Beer Sheva, part of the Hamat group, for the appointment of a provisional liquidator for the factory. The grounds of the petition were the factory's debt to the workers and the decision by Hamat's owner, Yoav Golan, to close the factory and move production to Turkey.

Published by Globes, Israel business news - en.globes.co.il - on May 6, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Emilia workers Photo: Histadrut
Emilia workers Photo: Histadrut
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018