February 3, 2009

Recession Hits Israeli Food Companies but Some Look to U.S. for Expansion

Jerusalem…Many Israeli food companies are being forced to cut back or shut down because of the economic climate, but some of the better known Israeli brands are actually expanding business to the U.S. and another bidding to purchase a troubled American meat processing plant. Vita Pri HaGalil in Hatzor Haglilit, known for the production of canned and frozen foods as well as condiments, has announced it may have to close its factories, leaving some 400 permanent employees and several hundred more seasonal workers without jobs. The company is reported to owe a total of $40 million to the banks, to suppliers including the US-based Rich’s Products Corporation and to farmers in the area. Management has been meeting with potential buyers who have expressed an interest in acquiring the economically strapped food company. Forty million is also reported to be the sum an Israeli company is offering to buy the troubled Agriprocessor kosher meat plant in Postville, Iowa shut down following the federal raid on the slaughterhouse and arrests of more than one-third of the workforce for alleged labor law violations. Soglowek Nahariya is a leading manufacturer of kosher processed meat and poultry products as well as vegetarian products. The Des Moines Register reports that Joseph Sarachek, a bankruptcy trustee has been overseeing the business was encouraged by the offer from Soglowek which has three plants in Israel and sales worldwide. Eli Soglowek, the CEO of the Israeli company, told Ynet that the deal is in its early stage but they will be pursuing it along with a long time U.S. partner of the company who will be providing some of the financial backing. Soglowek’s annual turnover is around $175 million dollars.