Koor Industries

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KOOR INDUSTRIES

Major Israeli industrial conglomerate.

Koor Industries was founded by the Histadrut in 1944, and until 1958 it was part of the Solel Boneh group. Its main areas of activity are building materials, electronics, telecommunications, and chemicals.

Koor's biggest component is Tadiran, one of Israel's largest companies, a producer of electrical, electronic, and telecommunication equipment. It also owns Telrad, another major telecommunications producer. Other large companies in the group include the Nesher cement company and Soltam, an armaments firm, which has incurred financial losses as a result of declining military purchases. Among the older companies in the group are Phoenicia, a glassmaking company, and Koor's metal production subsidiary.

Between 1987 and 1989, Koor suffered a major financial crisis and accumulated losses of US$845 million. In 1989 alone, its losses came to US$303 million. After protracted negotiations between Hevrat Ovdim, the government, and the banks of Israel and abroad to whom Koor was in debt, the company was rescued by a government loan, made on condition that it implement a radical restructuring program. This involved reducing the labor force, selling subsidiaries, and closing unprofitable production lines. Koor's workforce fell from 31,000 in 1987 to about 17,000 in 1992. It has shares in 35 companies, compared with 130 in 1989.

In 1991 and 1992, Koor's financial position improved and its net profits in 1992 came to 375 million shekels. It has raised funds on the stock exchange and has been able to repay debts owed to the banks.

Given that the company was owned by the Histadrut, this posed serious ideological problems, but reforms were implemented. Koor's admission to the manufacturers' association of private sector employers in 1992 was an indication of the extent of these changes. It remains one of the largest industrial groups in the economy, although its share in total industrial output declined sharply from about 25 percent in the early 1980s to about 8 percent in 1992. In that year, Koor's sales came to 6.1 billion shekels ($2.5 billion), of which 1.8 billion shekels ($725 million) were exports. Its operating profits equaled 630 million shekels. Koor is now considering investments in the tourist and retailing sectors.

Koor's shares are owned by the Israeli bank, Hevrat Ovdim, the government of Israel, and others. In 1993 the government sold shares that it acquired in exchange for loans made to Koor.