Additional reporting by Mike Knowles, Eurofruit
Israeli fresh produce exporter Agrexco is facing the 'most serious crisis in its history', according to reports in the Israeli press.
Announcing its latest financial results at the start of this week, the company revealed that it had made a loss of some Shk70m (€14.2m) during 2010 on turnover of Shk2.5bn (€508m).
The loss throws into sharp relief the recent news that agricultural collective Granot, Israel's largest regional marketing body and a major supplier of citrus and avocados to Agrexco, is switching its export volumes to rival group Mehadrin Tnuport Export (Mtex).
That move is set to strengthen Mtex's position as one of the world's three largest avocado exporters and the largest in the Northern Hemisphere.
Agrexco chief executive David Bondi, who joined the company in late 2010, is understood to be concerned about the current direction of the group and has already undertaken to lead a major reorganisation.
The reorganisation will see it trim its staff by around 150 employees – equal to around 30 per cent of its total workforce – through lay-offs and early retirements.
According to Israeli financial website The Marker, the restructuring will also involve reducing the number of overseas affiliates the company works with and consolidation of its logistics operations at home and abroad.
However, according to an article in the Mashov Haklaut, the loss of Granot might only be only the tip of the iceberg, with other growers apparently awaiting their final seasonal payment before considering alternative export options.
Some also believe flower growers currently working with Agrexco could be poised to set up their own export organisation.
Former export monopoly Agrexco remains the largest of Israel's fresh produce exporters and is joint owned by the country's government, by farming cooperative Tnuva and by the Israeli Production and Marketing Boards.
The government recently announced plans to sell its shares to the private sector, but insiders say the move is not progressing smoothly.
As usual at a time of crisis, talk of serious lay-offs and the selling off of properties owned by the company is adding to the air of uncertainty around Agrexco's immediate future.
That uncertainty has filtered down to growers and is causing many to reconsider their options.
However, an executive source within Agrexco, who preferred to remain anonymous, suggested that, 'as with past crises, Agrexco will also come out of the present problem period strengthened and functioning with even greater efficiency'.
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