Sanitary product manufacturer Sano will be making a bid to buy the troubled manufacturer of Tafnukim diapers, Amir Paper Products, at the beginning of the coming week.
"It is only natural for us to be interested in this plant. We will be making a financial proposal at the beginning of the week," Sano Group chairman Bruno Landsberg said yesterday. "We need to study the figures and see under what conditions the plant can be saved."
Landsberg believes Sano can pull Amir out of its current crisis. "We have the means to operate the plant. We specialize in the production of disposable diapers. We have deep pockets and we intend to use them."
On August 12, the Nazareth District Court granted Kibbutz Amir and Amir Paper Products 60 days of protection against creditors. Amir Paper Products employs some 90 staffers and has accumulated debts of NIS 110 million. In addition, the kibbutz itself has debts of NIS 160 million. According to the court request, Kibbutz Amir owes NIS 80 million to its members, NIS 75 million to secured creditors, NIS 50 million to Bank Hapoalim and NIS 45 million to suppliers and customers. There is no clear distinction between the debts owed by the kibbutz and the plant; in the arrangement to repay the debts of kibbutzim in Israel, Kibbutz Amir was made to pay relatively large sums, because it owned a then-successful factory. This arrangement was one of the factors that made it impossible to survive the price war that ensued.
Sources close to the trustee appointed by the court to run the plant, Oren Gotesman, said that several entities had expressed an interest in the plant over the last few days. It appears, they added, that Sano's offer is the most serious and will probably be slightly higher than that made by Nissan Medical Industries.
Nissan, which produces surgical dressing products, has made a two-phase offer: At first, it plans to inject NIS 10 million that would enable the plant to go on operating (NIS 5 million of its own against a matching contribution from the government); and later on, it may buy the plant for NIS 5 million, if it is satisfied that recovery is possible. Nissan is not willing to assume Amir's liabilities.
Sano manufactures disposable diapers under the Litufim brand. Sano currently manufactures its diapers in Hod Hasharon. A week ago, Supersol decided to terminate its private diaper brand, manufactured by Sano. Litufim is not carried by SuperPharm, which is responsible for 30 percent of diaper sales in Israel.
Landsberg explained that Sano was now reentering all Supersol stores with the Litufim brand and had a presence in all three retail chains, which together account for 40 percent of the sales of disposable diapers in Israel.
Sano has gained some experience in rehabilitating kibbutz-owned plants. Three years ago, the company acquired a toilet paper factory from Kibbutz Snir. "We assumed all of the plant's debts, and now it is doing well," Landsberg said.
A price war between two multinational diaper giants, Hogla-Kimberly and Procter Gamble, slashed diaper prices by 45 percent over the last three years, substantially hurting Amir.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now