Address: 8 Shaul Hamelech Blvd., Tel Aviv 64733
Line of Business:
srael Petrochemical Enterprises Ltd. (IPE or the Company) is a public holding company whose shares are listed on the Tel Aviv Stock Exchange. Engaging primarily in the energy sector and tangential sectors, IPE employs a two-pronged strategy of enhancing its existing assets to sustain steady internal growth, and investing long term in companies in its business environment and in new fields.
IPE was founded in 1961 as an industrial company engaging mainly in the manufacture of polyethylene. In 1978, IPE became a public company and its shares were listed on the Tel Aviv Stock Exchange.
In 1991, a new subsidiary, Carmel Olefins Ltd. (CAOL), was founded, into which the ethylene plant of Oil Refineries Ltd. (ORL) and IPE’s polyethylene plants were merged. As a result of this merger, IPE became a holding company, holding CAOL, jointly with ORL, in equal shares. At the end of 2009, a stock-swap merger of CAOL and ORL was completed, under which the Company sold its holdings of CAOL to ORL in exchange for an allotment of ORL shares.
As a holding company, IPE seeks to expand and enhance the value of its portfolio of holdings, and has executed a number of investments in recent years.
IPE’s Principal Holdings
Oil Refineries Ltd. (ORL)
IPE controls ORL, together with the Israel Corporation Ltd., and directly and indirectly holds about 30.7% of ORL’s shares.
ORL is one of the largest and most complex energy groups in Israel, operating the country’s largest refining and petrochemical complex in Haifa Bay. ORL’s maximum oil refining capacity is approximately 26,600 tons (197,000 barrels) per day in a range of high value-added distillates ranked 7.4 on the Nelson Complexity Index – the highest ranking for this type of refinery in the Eastern Mediterranean region. ORL’s annual production capacity is about 1,450 thousand tons of petrochemical products.
In 2007, ORL announced an aggressive USD 1.1 billion strategic investment plan designed to significantly expand ORL’s existing operations and position it so that it can exploit global opportunities. The plan includes upgrading of key assets, particularly the refining facilities in Haifa and its integrated petrochemical infrastructure.
One of the highlights of ORL’s strategic investment plan is the construction of a new plant for the production of clean fuels (Midan), which, when completed, will substantially increase the refinery’s complexity and enable the production of more high-value-added distillates from each barrel of oil. The clean-fuel plant will also increase the refinery’s flexibility, in terms of raw materials and product mix, to adapt to the changing market conditions.
ORL’s strategic plan also focuses on fully tapping the potential offered by synergies with its subsidiaries: ORL is investing some USD 45 million in a project to convert existing flows at the refinery to raw material for the production of polymers, and some USD 90 million in a project to increase its propylene production capacity. Another facet of ORL’s strategic plan includes substantial investments relating to environmental quality, reliability and safety. Concurrently, the Management considers ways to develop the Company via business opportunities beyond Israel.
The full integration between its refining operations and the production facilities of its wholly owned subsidiaries: Carmel Olefins Ltd. (polymers), Gadiv Petrochemical Industries Ltd. (aromatics products) and Haifa Basic Oils Ltd., optimizes the output of the refining facilities, enables parallel production of petroleum and petrochemical products, and increases operating efficiency and profit margins.
Avgol Industries 1953 Ltd. (Avgol)
IPE has a controlling interest in Avgol, holding 24% of its share capital. Avgol is a global leader in the nonwoven fabrics industry. Avgol manufactures and supplies nonwoven fabrics mainly for hygiene applications, such as diapers for infants and adults, feminine hygiene products and more. Avgol’s banner products are lightweight fabrics that are dominating the global nonwoven fabrics market today.
Avgol’s annual production capacity is approximately 112,000 tons of finished goods, which are produced on 12 production lines at its four production sites: in Israel, the United States, China and Russia.
At the end of 2010, Avgol acquired two additional production lines, which are expected to increase Avgol’s production capacity by some 30,000 tons per annum by the second half of 2012.
Avgol focuses on the provision of unique product-differentiation solutions for its customers, on developing products and production methodologies that ensure the premium quality of its products while streamlining costs, and on its close collaboration with customers during the development process. Avgol is a leading supplier of the world’s largest consumer product companies, such as Procter & Gamble, Kimberly-Clark and others.
IPE’s strategy focuses on identifying, acquiring, managing and enhancing investments in the energy and refining sector, and other segments in the value-added chain, such as petrochemicals, aromatics, and plastics applications. The Company’s activities along the entire value-added chain enable it to exploit and leverage its knowledge, expertise, experience and insight in its business environment, inter alia, for the purpose of identifying new business opportunities in relevant sectors.