SodaStream regains its fizz

Daniel Birnbaum (Photo: Eyal Yitzhar)
Daniel Birnbaum (Photo: Eyal Yitzhar)

With sales rising fast, the Israeli home carbonated drinks company has hired 300 new employees at its Negev plant.

SodaStream International Ltd. (Nasdaq: SODA) (TASE: SODA) is expanding its production in the Idan Hanegev industrial park near Lehavim in southern Israel, and has hired 300 new employees in the past three months. The company plans to hire 70 more in the coming weeks. The company, which has 1,400 employees in the industrial park, a third of them Bedouin living in Rahat and elsewhere in the Negev, is one of the largest employers in the Negev.

SodaStream produces water carbonation machines and various flavor concentrates for preparing home carbonated beverages. The company markets its products in 47 countries around the world. Most of SodaStream's manufacturing in Israel is in the Idan Hanegev industrial park, to which the company moved its plants from Mishor Adumim 18 months ago. The company also has production lines in the Alon Tavor industrial zone, China, and Europe. Now that the move to Idan Hanegev has been completed, SodaStream is producing carbonation containers, carbonation cylinders, and special plastic bottles for storing the beverages there. The company's new logistics center on the site is also scheduled to open soon. SodaStream continues to manufacture its flavor concentrates in its plant in the Ashkelon industrial zone, where it employs 150 workers.

Company management told "Globes" that in addition to adding to its staff, it is also buying 20 new manufacturing machines. " SodaStream Israel general manager Tamir Melamud said, "We are preparing for a continued rise in demand for the company's products in the Israeli market and in other countries, mainly in the West, requiring an adjustment in our production facilities."

Figures published by the company show that demand for its products has risen sharply since May 2015, mainly in the Israeli market, but also in other markets. "Sales of home carbonation devices have risen 50% in Israel over the past year," Melamud told "Globes." He added that global sales of carbonation devices were up 11% in the first quarter, and sales of carbonation cylinders were up 12%. "This amounts to 575,000 carbonations devices and 6.8 million carbonation bottles, and there is still room for growth. I came here from Strauss Group Ltd. (TASE:STRS), and I'm used to different growth rates in the food industry. Growth rates are more intensive here. If our growth is less than 10%, we're disappointed. We have met our growth rate targets for the year; no other beverages company is growing like this," he explained.

According to StoreNext data, the soda market in Israel grew 10% in 2015, with soda sales reaching NIS 120 million. SodaStream's share of this market is estimated at 35%. "We have adapted ourselves to the local workforce (Bedouin men and women, Y.A.), and have opened a "mothers' line" that enables mothers with children to work until 3 PM, when they return home with special transportation lines we provide for them. This approach helps many of them work outside the home," Melamud says.

Abed Abu Gerara, 45, married and father of seven from Rahat, who works as a shift manager in the company's carbonation devices manufacturing plant, says with satisfaction, "My wife also works here, because we need to make a living. Today, if a wife doesn't work, it's very hard to get ahead."

"A heartbreaking spectacle"

Before moving to Idan Hanegev, SodaStream did most of its manufacturing in Mishor Adumim, where it employed 600 Palestinian workers. In recent years, the company was a target for attacks by the boycott, divestment, sanctions (BDS) movement. After the plant in Mishor Adumim was closed down, a group of 70 Palestinian workers who had worked for SoldaStream for many years moved to the new plant in the Idan Hanegev industrial park. The Israeli authorities, however, refused to give them work permits, and company management was forced to lay off the Palestinian workers in March.

"The last day they worked here was a heartbreaking spectacle," Melamud says. "Jews, Christians, and Muslims stopped working when those workers left the factory. We just all stood and wept. Some of them had worked for us for 10 years. They were well-liked and dedicated, and because of politics and permits, they're no longer here. We're still in touch with them, and hope that someday, things will work out, they'll get permits, and we'll all be glad to have them back. This place personifies coexistence and the melting pot. Even at times of tension, disputes remain foreign to this place."

Published by Globes [online], Israel business news - - on July 27, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Daniel Birnbaum (Photo: Eyal Yitzhar)
Daniel Birnbaum (Photo: Eyal Yitzhar)
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