Israel Shipyards to implement the strategy of expanding into the field of construction products

The Israel Shipyards Company continues to implement the strategy of expanding into the field of construction products. Cement, a subsidiary of Israel Shipyards (95%), will acquire the development, production, distribution and sale of adhesives for ceramics and powders in the field of construction of the Keshet Prima company, owned by the Geshuri family. This is in exchange for NIS 61.5 million in cash and a contingent consideration of at least NIS 26.3 million, subject to the financial results of the activity acquired in the next 3-5 years.
Keshet Prima's operations generated an operating profit of NIS 28 million in a revenue turnover of NIS 204 million in 2021, compared with an operating profit of NIS 23 million in a turnover of NIS 194 million in 2020. Eyal Hecht, CEO of Cement and a 5% shareholder, noted that Keshet Prima, which was established 25 years ago, is active in a market of NIS 1 billion a year, and faces a thermocouple owned by Kibbutz Horshim; BG of the Ashtrom Group and Carmit of the Inrom Group Which holds an estimated 45% market share.
Keshet Prima manufactures Nitzanei Shalom in a factory in the industrial area, employs 200 people and supplies its products as a private label to Tambour, Orbond and Vardi Mix. According to Hecht, Cement does not currently intend to market Keshet Prima's products under its own brand, but is considering the possibility of doing so in the future.
Hecht said Cement plans to expand operations to gypsum boards and gypsum products, and is involved in a number of negotiations to acquire companies and activities in the field of construction products. "Our multi-year strategy is to expand into construction products. We will not remain a single-product company in one market. Our main goal is to reduce the cement sector from 80% of Cement's turnover today to 50% in 3 years," Hecht said. According to him, with the acquisition and growth in Cement's cement activity, it is expected to present revenues of NIS 800 million in 2022.
Cement was established in 2014, and its ownership was then divided between Israel Shipyards (70%), the Swiss Isco Company (25%) and Hecht (5%). In 2021, Israel Shipyards acquired 25% of Cement shares from Isco, and today it owns 95% of Cement. Hecht owned and remains the owner of 5% of Cement.
The company's main activity is importing cement from Turkey and Greece, unloading it at the port of Israeli shipyards and transporting cement to customers. The company estimates Hecht has a 20% share of the cement market, and is the largest cement importer competing with the local Nesher company.
Cement imported 1.8 million tons of cement in 2020 and its market share in the cement market in 2017-2020 was 12% -15% of the cement market in those years. Cement took advantage of the corona crisis to buy four ships dedicated to transporting cement for $ 38 million. Three ships of which can carry 15,000 tons, one carries 12.5 tons, and in addition the company leases a ship of 7,000 tons.
Cement enjoyed the tides in the maritime transport market in 2021 and beyond the use of cement transport ships to Israel. It imports cement from Greece, Turkey and Spain to Italy, England and the USA. The cement sector ended January-September 2021 with a cash flow operating profit (Ebitda) of NIS 36 million with a turnover of NIS 326 million, compared to a cash flow operating profit of NIS 50 million with a turnover of NIS 292 million In 2020, Israel Shipyards purchased Isco's shares in Cement (25%) in October 2021 for NIS 70 million, ie at a value of NIS 280 million.