The Hamat group (TASE: HAMAT) today reported that it had signed a letter of understanding with a Turkish corporation for the establishment of a joint factory for the production of sanitary products near Izmir, Turkey. The announcement said that under the agreement, a joint company would be established in Turkey. In the first stage, the company will complete its purchase of 30 dunam (7.5 acres) of land on which the plant will be built.
Hamat says that the agreement gives it a call option for buying the local partner's share in the joint company, and the local partner will have a put option for selling its share.
According to Hamat's report to the TASE last week that it was in advanced negotiations with a Turkish corporation for a joint venture, the plant will be located 40 kilometers from Izmir. The land for the plant will cost NIS 10 million. Hamat did not specify the Turkish corporation, but said it was one of the suppliers of Beer Sheva-based Hamat Sanitary Products (Harsa), a Hamat subsidiary. According to the understandings between Hamat and the Turkish corporation, the Israeli group will hold 80-90% of the rights in the joint industrial venture.
Hamat, controlled by businessman Yoav Golan, believes that opening a plant in Turkey will enable it expand its production capacity for sanitary products and its penetration of additional markets around the world, which it is having difficult accomplishing with its current plant in Beer Sheva. The group said production costs were 30-40% lower in Turkey than in Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on June 30, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015