Building a Factory in the Desert Is Modern Zionism at Its Best

The chairman of Osem refutes Nehemia Shtrasler's suggestion that his company's decision to build a factory in the Negev is of no benefit to the economy.

Dan Propper
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The southern Israeli city of Arad.
The southern Israeli city of Arad.Credit: Ofer Vaknin
Dan Propper

Nehemia Shtrasler launched an attack in these pages on Osem’s willingness to alleviate the distress caused in Arad by the closure of the Arad Towels factory, turning this willingness into another story of greed (“Instead of real capitalism and lower prices, Israelis get noodles and lies,” Haaretz, November 7). It’s important for readers to know the facts thoroughly.

Shtrasler writes that building an ice cream factory in Arad is of no benefit to the economy. But it is actually beneficial on several different levels. Stable, long-term employment in Arad – and outlying areas in general – ensures population dispersal and bolsters the Negev. The state views strengthening the periphery as a Zionist mission of the highest order, and the Negev tops the list of such missions.

Osem has built seven factories in outlying areas. Its Sderot factory has grown from a small plant in the late 1970s to a modern enterprise that employs 600 people and is now the largest factory in the southern city. In Kiryat Gat, Osem has two factories that employ more than 400 people. One was built when the Bagir clothing factory closed – and in this case, too, it helped alleviate the unemployment crisis created in the city by that closure. Osem’s factories in the periphery are slated to undergo massive expansion in the near future.

Startups and importers won’t cause the Negev’s barren expanses to bloom; only industrial plants will do that. This is modern Zionism at its best.

We didn’t seek to set up a factory in Arad. The factory was originally slated for the Kiryat Malakhi area and would have received no government aid. But when I was asked whether we could possibly set up a factory in Arad, I viewed this as a mission. We didn’t ask for any special benefits; only for the benefits the state has given in the past to factories that move to the Negev, and whose purpose is to cover the special expenses entailed by building a factory in far-off Arad (such as longer shipping times and higher shipping costs).

Osem chairman Dan Propper.Credit: David Bachar

* I told the media – and this was reported in the papers – that the Kiryat Malakhi factory’s 200 existing workers will be absorbed through the expansion of our factories in Kiryat Gat and Sderot. In other words, we will add 200 jobs in the Kiryat Malakhi area within two years. We promised the Kiryat Malakhi workers that they would all remain Osem employees. All this was made so clear that I wonder why Shtrasler saw fit to write the opposite.

Many of the factories Osem has bought over the years were losing money (including an ice cream factory), and some were on the verge of going bankrupt and firing their workers. Osem developed these factories. It built plants in outlying areas and currently employs 5,000 workers directly, as well as about the same number indirectly. If it weren’t for Osem, areas like Sderot, Kiryat Gat, Acre and Beit She’an would suffer unemployment problems. Thus, Osem’s profits have been invested in work, achievement and developing the country.

* Shtrasler claims that successive antitrust commissioners have failed to do their job. Indeed, had they been doing their job, they would have forced Haaretz to stop printing the price of the paper on every issue, just as they prevent food companies from printing the price of their products on the package, for fear that this will undermine competition. They would also have barred Haaretz’s press from printing another paper, just as it prevents food companies from manufacturing products for a rival.

* Shtrasler attacks Osem over the cost of living, but ignores Israel’s high value-added tax, as well as the fact that, on every Osem product, there are state and municipal taxes – both direct and indirect – of more than 25 percent. Moreover, many raw materials are protected by protective tariffs.

Shtrasler also ignores the fact that the agricultural raw materials cartels set the price of these goods; the expenses of kashrut; the fact that an Israeli plant operates only five and half days per week, compared to seven overseas; and the fact that Israeli factories serve a relatively small population.

If battling the high cost of living heads the list of Shtrasler’s concerns, why doesn’t he advise Haaretz readers – who pay 13 shekels ($3.40) per issue for the Hebrew edition – to switch to Yedioth Ahronoth, which charges only 5 shekels per issue? Or even better, to switch to Israel Hayom, which is a freebie? Why is The New York Times sold in America for only $2.50 – 9.5 shekels – per issue? Does it contain less paper? Does it use less ink? Are its writers less talented? I can’t help wondering.

Finally, Osem isn’t seeking any “gift” from the government. If another employer is found for Arad’s unemployed, Osem will return to its original plan and set up its factory in Kiryat Malakhi. I suggest that Shtrasler do the Zionist thing and search for another factory to set up in Arad.

The writer is chairman of the board of Osem

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