Investing Against the Odds

U.S. Jewish industrialist finds a way to guarantee his company's success.

Ora Coren
Ora Coren
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Ora Coren
Ora Coren

Peter Weintraub is a Jew who holds a warm place in his heart for Israel. He is also wealthy, and has a textile import-export company in the United States, a textile plant in Argentina, and offices in Hong Kong and China. After 10 years of searching for an investment opportunity in Israel - including countless visits to the country, meetings with all the leading textile industrialists, via his friend, MK Ehud Ratzabi (Shinui) - he still could not find anything suitable. The high price of the products and services offered by textile industrialists in Israel was not compatible with Weintraub's products.

When asked whether the Ministry of Industry, Trade and Employment did not show him investment opportunities, Weintraub looks perplexed. He did not even know that the ministry allocates tens of millions of shekels a year to finance meetings, events and glitzy receptions, as well as the salaries of trade and economic attaches, and employees of the investments promotion department - all for the purpose of locating potential investors and bringing them to Israel. He did not even know that Israel offers monetary benefits to investors, especial foreign investors.

"No one from the Industry, Trade and Employment Ministry came to us," says Weintraub. "We are below the radar. I came to Israel many times and tried to find out how to invest here. I met with representatives of Kitan, Wardinon, Nili and others. No one from the government ministries presented me with options for joint ventures in Israel. I keep a low profile. Maybe that is why they did not seek me out."

Weintraub, however, is not cut off from the mainstream. He is a reform rabbi who is very involved in his community in New York state and actively recruited Jewish investors to help Sderot, a town he visited by chance due to the disengagement. It is unclear how no word of the Industry, Trade and Employment Ministry's efforts to attract investors ever reached his ears. This situation, however, is a fact, and if it happened to Weintraub, it is probably happening to other potential investors who are unaware of the ministry's efforts to attract them.

Undeterred by the intifada

Weintraub founded Bristol in 1992 as a textile import-export company. "I have a lot of companies, but this is my main company," he says.

In its first year, Bristol's sales totaled $700,000, and have since grown to $100 million annually. "I'm not a big business, but I am not small, either," he comments.

Weintraub and his wife, Ellen, were visiting Israel when the second intifada broke out. "We were at the King David Hotel," he recalls. "Everyone left. We stayed, with about 20 other guests. One of our sons was in Israel throughout the first year of the intifada, living in Jerusalem."

Weintraub's first joint business venture in Israel came about thanks to information he received from a business associate in India. "In the summer of 2001, we were due to go to Holland, to a textile exhibition that is held every 10 years," Ellen Weintraub recalls. "Peter was speaking on the telephone with the Indian agent, who said he was having some problems dyeing fabric in India. He said he knew of only one place that could do the high quality dyeing: 'Maybe you've heard of it - Offis Textile, whose CEO is Ramzi Gabbay,' the agent said."

The Weintraubs, who knew Gabbay from previous trips to Israel, knew they would be missing the exhibition in Holland to realize their dream - a joint venture with an Israeli company.

"I phoned Ramzi and we came here two weeks later," Peter says. "That was the beginning."

The relationship with Offis, which is owned by Eliezer Fishman and Gabbay, soon expanded beyond dyeing, when Gabbay suggested a new joint venture - the construction of a textile plant in the Erez Industrial Zone that would employ Palestinians. The plant was built, but on the day it was slated to open, the government decided to close the industrial zone for security reasons. Shortly thereafter, the government decided to offer incentives to industrialists investing in Sderot, which was suffering from the Qassam rocket attacks fired from the Gaza Strip.

Weintraub built a sewing factory, but operating costs were much greater due to the higher salaries paid to Israelis in comparison to those received by Palestinian workers - NIS 40 per hour, compared to NIS 60 per day. As a result, the factory lost $250,000 its first year. Weintraub promised to cover this loss and any future losses the factory would incur.

To ensure orders for the factory's products and employment for its 50 workers, Weintraub decided to do two things - to convince his business associates in the United States to purchase the high-quality linens produced by the factory, and to set up American Friends of Sderot, which will continue to invest in the town after the sewing factory becomes profitable.