“I have been flying high for 20 years, and I always get off the plane with a cold. In the last two flights I wore a mask and did not catch a cold. What will I do on the next flight when I am no longer charged? Same thing. It will be uncomfortable, but Rabak, I get off perfectly healthy”: The new flight outline of frequent flyer Dan Mesika, CEO of the wipes manufacturer
On canvas
+ 1.36%
Base:8,808
opening:8,808
High:9,090
low:8,800
change:523,619
Page Quote News Graphs Company Profile Recommendations
More articles on the subject:
. If you ask him, the logic he presents to us is also true of the field of activity of the company that has enjoyed the soaring demand in the past year. In an interview with BizPortal, he tells all the skeptics that the vaccines may lower the volume – but will not really shut down the party.
“This year has proven that surface disinfection and social remoteness maintain health,” says Mesika. “The public has realized that maintaining hygiene is not just about avoiding corona – there are more viruses and diseases circulating in the air. So it is true that demand is not the same, but even if it has dropped “At 50% – and we do not say that this is what will happen – it will still be increases that are higher than those that are routine in our sector.”
According to Mesika, before the corona, the world of wipes showed a growth rate of 4-6% every year, and in the field of washable wipes (“damp toilet paper”) in which it is active on canvas, it is a growth of 8-12%. “During the corona we saw a hundreds of percent increase in U.S. sales of antiseptic and cleaning products – and that’s only in barred sales, that is, physical, and not including online sales. Inside this moist toilet paper sales have risen by tens of percent. So you understand that the distribution of the vaccine will not lead to people using fewer wipes. ”
Even before the spread of the virus, cloth owners promoted efficiency, so according to the conclusion, even without the corona, the company would have shown better results than before. As part of this, the company sold, for example, the loss-making hygiene activity (tampon production) in the United States to Ontex (“We lost about $ 11 million of this in 2019, you see, the empowerment”).
Indeed in 2020 a fabric owner showed consistent quarterly growth. In the third quarter, sales totaled NIS 404.7 million, an increase of 19% compared to the corresponding quarter. During the period, it recorded a net profit of NIS 42.7 million, compared with a loss of NIS 24.3 million in the third quarter of 2019 and a profit of NIS 25 million in the second quarter of 2020. The results of the third quarter reflect a profit rate of NIS 117.6 per year. Will a fabric owner be able to maintain this pace? Mesika replies that the company is not currently publishing its forecast for the future.
While most of the increase in activity is attributed to the wipes sector, the hygiene sector, not only has a cloth but the whole world is experiencing a decline in demand. Thus, in the third quarter, Al – Bad’s revenues from this segment fell slightly to NIS 39.5 million, compared with NIS 40 million in the corresponding quarter. “The parameter that determines the use of tampons is how many women leave the house and do sports activities,” Mesika explains. “The frequency of replacement is of course determined by the use. The consumption of tampons is not an exact thing, a customer does not know exactly how much you will need and when. We estimate that during 2021 because the vaccines will return the world to routine, demand will return.”
Abgul
+ 0.65%
Base:320.9
opening:325.5
High:325.5
low:323
change:74,372
Page Quote News Graphs Company Profile Recommendations
More articles on the subject:
Which also produces-woven fabrics has been hit by the rise in raw material prices. How was fabric affected by this?
“Basically fluctuations in raw material prices always have an effect, but we are less sensitive to it because we do not sell fabrics out, but final products. Our orders of raw materials forward are more or less the same costs. What is more, there is an increase in shipping costs from China Heaven. ”
Apart from you and Avgol, there are also non-woven fabrics in Israel
Schlag
+ 0.64%
Base:1,254
opening:1,254
High:1,262
low:1,254
change:3,250
Page Quote News Graphs Company Profile Recommendations
More articles on the subject:
And Spantech. Will there be a consolidation in your opinion?
“There is no connection between these companies. This is a point that is perceived incorrectly in the local capital market. Once every two months, a headline appears in the economic sections in which they are all linked together, but the only one that is similar to us is
Spantech
-0.43%
Base:935.9
opening:935.9
High:935.9
low:922
change:259,263
Page Quote News Graphs Company Profile Recommendations
More articles on the subject:
That you mentioned, and is only a manufacturer of raw material. We are a vertical company – we produce raw material for ourselves and sell a finished product. “Avgol in general produces fabrics for the diaper industry, not for wipes, and Schlag is similar to it.”
Okay, so they do not appeal to the same market, and yet their activity can not be synergistic with yours?
“The only place that will allow synergy is between us and Spantech. Seemingly instead of investing in a fabric line I could have made a decision to buy a fabric company, but that’s not something that is at stake.”
“Chinese production takes over the United States”
In accordance with the Board’s directive, Focus on Fabric is developing the core business in Europe and the US, and recently announced an organizational change and division of operations into five independent divisions: three geographical wipes divisions (Europe, USA and Israel and the rest of the world), the Fabric Production Division and the Tampons Division. We are conducting the interview with Mesika after the company reported the establishment of a new production line in Dimona to be completed in 2024, in which it will produce wipers with a greener standard in accordance with regulatory requirements in Europe to reduce the use of plastics.
“It will be a line that will operate according to the latest technology,” says Mesika. “We will promote the investment in stages over two to three years. It must be said that the production capacity in this line will be fully used by On Cloth and thus will increase the company’s verticality.”
How much will production increase compared to the currently active line?
“We do not give details in percentages, but this is not something substantial, neither for us nor for the end consumer. It will be in small differences.”
If it is possible to move to a production that is less harmful to the environment at more or less the same costs, why would you continue to hold the existing line, the “more polluting” one called, after the new one starts operating?
“Also because there is still a certain difference in costs, and mainly because there is a matter of market education that needs to be completed beforehand. When you use a ‘greener’ fabric it is not the same, the texture and feel are different and it takes time for the market to get used to it. “.
Let’s talk about the exchange rate crisis. How is it reflected in your results?
“On canvas as a subsidiary has internal dollar protection, and the company is mostly exposed to the euro.”
And in principle, what would you say to an Israeli who enjoys the strong shekel that lowers private imports, and claims that this is more important than the weakening of the shekel for the benefit of manufacturers and exporters?
“I think the ability of manufacturers to keep their heads above water outweighs that. In the end you need to have jobs that can employ people. I lived in the United States for six years, and relocated in 2001 when Clinton was president and decided to open caps all over the textile world. See in the chains a tremendous amount of Chinese production and local factories closed in insane volumes because they could not compete with the Chinese.
“They said, ‘We will be capitalists, we will open the markets, we will remove the tariffs on imports,’ and the Chinese have taken over the country. People have lost jobs from one day to the next. I asked the Americans, ‘What will happen in the end? “The fact that a citizen bought something cheaper will not make him financially established. The ability to find a job where he will earn a good salary makes him so.”
Some economists believe that the law to encourage capital investment, which you enjoy as exporters operating in the periphery, should be repealed. What do you think?
“I will say something like this: In many countries around the world there are different types of industry incentives. An industrialist has to take risks and create jobs. If you do not encourage him he will think twice whether to do it or not. When you go to open a factory in the United States, you get free land and coverage. “Of the development costs, property tax exemption and tax benefits for 10 years: the tax that employees pay at State you get back. At the end of industry it is something that strengthens the country’s economy and creates jobs and a population with income capacity.”
With so many advantages, you say, in favor of the United States, if the law is repealed, will you move production there and export it to Israel?
“We do not expect the law to be repealed in the near future. If that happens we will consider our next investments. In countries where the industry is not encouraged companies are running out. We should also take the law in proportion and remember that even companies that benefit from it are not completely tax free. “From the country and disappearing. Manufacturers still have to put their hand deep in their pocket and take the risk, with all the uncertainty in the country from a security, economic, and political point of view.”