Drought, crisis dry up sales in grass turf sector
A good half of Israel's grass turf companies are in trouble, as municipalities and local authorities scale back their gardening plans. Whatever plans to lay down green lawns remained as the financial crisis bit into tax revenues, the drought has killed.
The final blow for the turf companies, which sell mainly to the cities and to gardeners, was the ban on watering gardens. "Other than a brief spate of municipal orders before the elections, no city or contractor would order turf that can't be watered," spells out Ilan Axelrod, economic affairs chairman of Kibbutz Givat Brenner, and the owner of a grass turf nursery.
Prohibiting cities from watering gardens is a convenient out for the water authorities, but it won't save more than 30 million cubic meters of water a year, argues the marketing manager of a nursery in a moshav near Ra'anana. (The Water Authority claims the economy will be twice that.) Also, many cities are ignoring the order: Tel Aviv has been rebuked and the Kinneret administration is still growing grass (see Page 4).
Technically, cultivating a dunam (about a quarter of an acre) of turf requires almost 1,000 cubic meters of water a year. "It's a lot of water," observes Axelrod. "We can water the lawns with treated waste water, but that isn't unlimited in supply either."
The same amount of water could be saved if the Water Authority would force cities to fix leaky pipelines and conduits, says the manager. "But the Water Authority doesn't, because it would involve a battle against the big cities."
But the crisis didn't begin with the prohibition on watering gardens. Turf growers were reporting losses for 2008 as prices of the "prefab grass" plunged. During 2008 one large nursery in central Israel sold 400 dunams of turf for an average of NIS 7.50 per square meter, which is very low for the sector, and ended the year in the red.
About half the turf companies in Israel are considering a complete shutdown, says a major player in the sector. Some of the smaller nurseries have already closed, though some claim they're just in a state of animated suspension until the situation improves.
A different solution was taken by Marvadeshe of Kibbutz Givat Brenner, the biggest and oldest turf supplier in Israel: It fired half its workers in recent months. After the holiday the management will be convening to discuss the nursery's future, which means the remaining half of the staff can't be sure of their jobs.
Marvadeshe had based its business plan on selling 500 dunams of turf last year and only sold 350. "Now the ban on watering by municipalities blocks sales to the institutional market. The global economic crisis has depressed household demand. Prefab lawns are luxuries that the public forgoes when times are tough."
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