Geniger announced the closing of the production line at Kibbutz Neot Mordechai, which specializes in the production of nets using weaving technology, in the shadow of the negative trend that has characterized the activity at the site for the past two years, the company reported. According to her, the negative trend intensified in 2022 and caused an erosion in operating profit and a negative gross profit in recent months.
Mordechai explains the decrease in construction activity in the company as a result of a decrease in export sales, mainly due to the loss of competitiveness in the world market, especially in light of the continuous increase in the prices of various inputs in Israel, including the increase in labor wages and sea freight costs, alongside logistical difficulties that resulted in non-compliance with deadlines.
In addition to this, Beganiger points out that the intense competition from India and China, the increase in competing imports and the erosion of the selling price have taken their toll. The fact that the company’s contract on the site in the kibbutz is expected to end and the rent is expected to increase significantly contributed to this. All of these make Geniger’s activity in the kibbutz redundant and the company closes the production line and lays off workers.
Geniger is expected to register a one-time expense of 6 million shekels in the third quarter of this year as a result of the sale of the equipment and layoffs at the factory after the company closed its doors yesterday.
About a week ago, Geniger backed out of its intention to establish a production line in Kibbutz Geniger because the residents of the extension opposed the move, and as a result, a construction permit for the production line was not received, and thus the company is working to move production abroad.