SodaStream Setting Up Plant Within Green Line

Company's CEO confirms new plant is being built within Green Line but that production in the West Bank plant – upon which 160 Palestinian families depend – may not cease.

Shuki Sadeh
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Shuki Sadeh

Following political pressure, SodaStream International is moving its manufacturing plant in Mishor Adumim to within the Green Line, according to reports from Swedish retailers who sell its goods there. But the Israeli company's CEO, Daniel Birnbaum, says he doesn't know about the retailers' announcements, and confirms that it's setting up a plant inside the Green Line - but he does not know at this stage whether production in the territories will cease.

SodaStream, which went public on Nasdaq in November, published strong results for the year 2010 earlier this week, though its fourth-quarter profit took a hit from higher sales and marketing expenses. The firm, which makes home-carbonating machines and kits, guided investors to expect strong growth in 2011, predicting a roughly 40% increase in net income on 25% more revenue, as it further penetrates the U.S. market.

David BirnbaumCredit: Nir Keidor

However, while its U.S. sales tripled last year, western Europe remains its main turf, and in that area, its biggest market is Sweden. There, some 20% of households own SodaStream home-carbonating devices. On January 31 this year, the company celebrated selling its millionth soda-maker in Sweden.

And it is there in Sweden that a political campaign mounted by a human rights organization has been running for about a year, that has been urging SodaStream to move its plant out of West Bank, as part of a broader drive to boycott products made in the settlements.

In the last week, a report on production in the territories, originating with the Coalition of Women for Peace, was disseminated in Sweden. The report said that SodaStream makes all its home soda-making devices in Mishor Adumim, despite the company's assurances to the contrary to consumers in Sweden.

The report also stated that SodaStream soda makers sold in Sweden are labeled "Made in Israel" though they are made beyond the Green Line.

Following the report, the retail chain ICA, which sells SodaStream products in Sweden, announced that the Israeli company had told it of intentions to move its production to a new site.

SodaStream aspires that none of its production sites be on occupied land, ICA's announcement claimed (in Swedish ). ICA further wrote that SodaStream is in the process of moving its production lines from its site in the settlements and that the process would be complete by the end of the summer.

Another Swedish chain, MediaSaturn, which sells the company's products in Sweden, also said SodaStream promised to move its plant by August.

SodaStream had commented on the political criticism it has been fielding in its prospectus ahead of its flotation on Nasdaq. The company categorized the location of its plant in the territories as being a risk factor due to political pressure and bad press outside Israel. It might therefore consider moving the plant, the company said in its prospectus.

The company added that if it has to move its plant, it would lose tax breaks applicable to plants in the territories.

Birnbaum said he isn't aware of the Swedish chains' announcements but they are probably inaccurate.

"At the moment we are building a new plant within the boundaries of the Green Line, but I don't know if production at Mishor Adumim will continue. It depends on the political atmosphere and the company's needs," he told TheMarker last night. In any case, he said, the claim by the Coalition of Women is wrong. Its report is biased, he said, adding that closing the plant in the West Bank would do nothing good for the 160 Palestinian families who depend on it for employment.

Moreover, Birnbaum said - all SodaStream products sold in Sweden are made in China, not Israel. There may be some stores in the country where old products made in Mishor Adumim are still on the shelves, he said, but that inventory should run out by summer.



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