Stung by Ammonia Tank Closure, Haifa Chemicals Shutting Down

The surprise move includes closing its southern plant as well as the Haifa plant where its controversial ammonia tank is located. Some 800 workers will lose their jobs

Haifa Chemicals workers protesting the closing of the company, August 2, 2017.
Gil Eliahu

In a surprise move, Haifa Chemicals said Wednesday it was closing down and firing all its 800 employees after it failed to prevent the ammonia tank it needs to operate from being decommissioned.

The announcement came a day after labor unions reported that the company planned to shut only its Haifa Bay facility, where the tank is located, and lay off half its workforce. But early Wednesday the company said it was closing its southern facility as well and going out of business altogether.

In a letter to Prime Minister Benjamin Netanyahu, Jules Trump, whose family controls Haifa Chemicals through Florida-based Trance Resource Inc., said the Israeli company had sustained hundreds of millions of shekels in losses after operations were suspended following a court order in March ordering the tank emptied and decommissioned.

“We believe we made every possible effort to keep production operations alive, but we were put into an impossible situation in which decision-makers found it hard to make decisions, and when they did failed to follow through on them,” the letter said.

But the two labor unions representing Haifa Chemicals employees weren’t accepting the closure passively. Avi Nissenkorn, the chairman of the Histadrut labor federation, said employees at the southern facility would strike immediately and workers elsewhere around the country would walk off their jobs in solidarity.

“Hundreds of families and the entire Israeli economy will pay a heavy price,” Nissenkorn said. “I expect the parties, including government representatives and the company’s owners, to find an immediate solution.”

Koach La’ovdim, the union that represents the company’s Haifa workers, had vowed Tuesday to fight the closure.

Haifa Chemicals
Gil Elihau

Trump, who is no relation to the U.S. president, expressed sympathy for the employees due to get the ax, noting that most of them don’t have skills that can be easily transferred to other jobs.

“The loss of their jobs will destroy their lives and the lives of their families,” he said. Still, he ordered immediate dismissals for all of them, except for a skeleton staff to oversee the final emptying of the tank.

The fate of the 12,000-ton-capacity tank has hung in the balance since February, when a Haifa court ruled it should be closed due to the health hazards it posed if it leaked or were damaged. The final blow came last week when the Supreme Court said after multiple delays that the tank had to be emptied by September 18.

Unlike other companies that use the ammonia, a key ingredient in fertilizers, Haifa Chemicals failed to find imported alternatives as it fought in court and proposed various plans to keep importing ammonia that would pose fewer safety risks.

For more than a decade, Israel’s government has been seeking alternatives to the Haifa tank, including the construction of  a new one in the middle of the desert. It has made little progress. The Environmental Protection Ministry had already wanted the tank closed by the end of last year.

Trump said the onslaught was too tough. “Spin defeated industry, bureaucracy defeated business and a local campaign by the mayor defeated the national government,” he said, referring to Haifa Mayor Yona Yahav, who had led the campaign to close the tank.

The Economy and Industry Ministry insisted it had done what it could to find a solution, including allocating land for a new tank as a long-term solution. It said it was committed to seeking a medium-term solution as well.

In fact, Haifa Chemicals was in the middle of negotiations with the government over ways to import ammonia to the southern plant, but in his letter to Netanyahu, Trump said he didn’t see how the talks would lead to a solution in the near future.

A government official who requested anonymity said he understood why Haifa Chemicals was closing the Haifa plant but not why it was shuttering the southern one as well. “The Environmental Protection Ministry was in the middle of talks about import alternatives for the southern plant such as isotanks,” the source said.

Isotanks are containers used to transport liquids, gases and powders as bulk cargo on ships.