Osem Warms to Idea of Bringing Ice Cream Plant to Hard-hit Arad

The food manufacturer is expected to ask for a $12-million government grant to help build a new ice cream factory in the southern city.

David Bachar

In response to a recent request from Finance Minister Yair Lapid, food manufacturer Osem is proposing that it build a new ice cream plant in the southern city of Arad.

The city has been hit by a wave of layoffs, which last month included the dismissal of the entire staff at the Arad Towels plant due to the closure of the factory there. Osem is expected to ask for a 46 million shekel ($12.2 million) government grant in connection with the opening of the new factory in Arad.

The company, which is partially owned by Nestle and distributes Nestle products in Israel, is expected to invest a total of 200 million shekels in the ice cream plant, which is projected to employ about 250 people during the peak summer season and about 200 people during the winter. Osem officials expect the ice cream factory to be in operation within two years, absent any bureaucratic delays.

“At the beginning of [last] week, I got a phone call from Yair Lapid, who talked to me about how they were looking [to create] employment in Arad, and that this was also a Zionist act,” Osem chairman Dan Propper said. “We had a plan to build a new ice cream factory. Right after the call, a small team looked at the feasibility and the answer was positive. We sat with Lapid and told him this also requires cooperation to eliminate bureaucratic delays.”

Osem responded positively to Lapid’s request subject to certain conditions. The company is seeking government support that amounts to 23% of the cost of establishing the facility. Osem officials expect to present the plan for the factory as an anchor that could encourage the opening of other manufacturing facilities in the same area.

In an effort to finalize the details of a government offer of support quickly, Lapid appointed his budget division chief, Amir Levy, to coordinate the process. The food manufacturer is also expected to approach the Economy Ministry and the ministry for the development of the Negev and the Galilee with a request that they be brought into the picture.

In addition, Osem officials plan to meet this week with Arad mayor Tali Ploskov to consider a possible site for the ice cream plant, which is expected to occupy about 35 dunams (nearly 9 acres). The company may also ask the city of Arad for concessions on the payment of municipal taxes.