Ahava sold for $77 million to Chinese investors

The Israeli cosmetics firm Ahava will be fully acquired by a Chinese investment group for $77 million.

The Fosun Group on Sunday night in Jerusalem signed an agreement to purchase the Dead Sea skin care products company, the Israeli business daily Globes reported.

Ahava has been a target of the Boycott, Divestment and Sanctions movement against Israel over its factory in Mitzpeh Shalem, located about one mile from the western shores of the Dead Sea in the eastern West Bank, as well as initiatives targeting only products made by Israelis in the West Bank and other disputed territories, namely the Golan Heights and eastern Jerusalem.

Last month, the company confirmed plans to open a plant in Ein Gedi, located within Israel’s pre-1967 borders. It is not known if the new plant eventually will supplant the factory in Mitzpeh Shalem.

Ahava cosmetics giant opens plant inside Israel’s Green Line

Ahava, an Israeli cosmetics firm whose products are made in the West Bank, confirmed its plan to open a production line on the Israeli side of the 1967 Green Line.

“In light of expanding production needs due the success in marketing Ahava products around the world and expected changes in cosmetic product manufacturing standards in certain Western countries, Ahava will establish an additional plant at Kibbutz Ein Gedi,” Haaretz on Thursday quoted an Ahava spokesperson as saying.

Ahava’s plan to open a plant in Ein Gedi was first reported last year by the Globes daily. The firm did not say whether it intends to have the Ein Gedi plant, which will operate on land internationally recognized as belonging to Israel, replace its current factory in Mitzpeh Shalem on land that is widely considered as occupied Palestinian territory.

Ahava has been a target of the Boycott, Divestment and Sanctions movement against Israel, as well as initiatives targeting only products made by Israelis in the West Bank and other disputed territories, namely the Golan Heights and eastern Jerusalem.

In 2011, Ahava shuttered its London store after months of demonstrations by pro-Palestinian groups. Similar pressures had been applied to SodaStream, the carbonated beverage dispenser manufacturer, which relocated last year from the West Bank industrial zone of Mishor Adumim to the Negev.

Other Israeli exporters that transferred their West Bank operations in recent years to Israel proper include the Barkan winemaker, the Bagel-Bagel pretzel company and the Swedish-owned Mul-T-Lock lock manufacturer.

Israel, the brand

In the 19th century, industry in what became the State of Israel consisted mainly of small workshops that made farm implements. Today, the country manufactures everything from drugs to lasers to shoes, and the closest thing to farm implements are complex drip irrigation systems.

Everyone knows the big names in Israeli manufacturing, like Teva Pharmaceutical Industries and Ahava cosmetics, and there are others, just as successful on the world stage, that fly under the radar. The establishment of world-leading companies and brands marks a significant stage in a country’s development.

“BMW is Germany. Hermès is very French. Burberry is very British,” said Tim Calkins, a professor of marketing at Northwestern University’s Kellogg School of Business. “For some brands, location is a big part of the brand meaning. A strong brand can give a sense of pride to a country.”

Manufacturing generates almost one-fifth of everything Israel produces in an average year, according to the Manufacturers Association of Israel. North America is Israel’s largest export market, with 30 percent, or $12.7 billion, of all exports, with Europe close behind at 29 percent.

Even 40 years ago, Israel didn’t have the luxury of thinking about branding. Manufacturing had advanced, but until the 1970s most of the country’s resources were directed into economic necessities: food production, infrastructure and immigrant employment. Traditional industries such as food processing, textiles, furniture, pesticides, rubber and plastic products provided most of the country’s industrial output, according to the Ministry of Foreign Affairs.

The next phase of development concentrated on weapons manufacture due to various arms embargoes, and that in turn created the base for the high-tech industry that hogs the limelight these days. But even as high-tech has exploded, manufacturing has grown, too, often from a base in Israel to production facilities around the world.

“No doubt, the good reputation of Israeli products and companies in countries around the world contributes a great deal to how Israel is perceived,” said Shraga Brosh, who heads the Manufacturers Association. “It is the Israeli industry’s commitment to assure that our products are not only competitive on a global scale but also leading in both their quality and innovative technology.”

For example, Strauss Group Food Products, the country’s second-largest food and beverage company, makes Sabra-brand chilled dips and spreads. It also owns the Max Brenner Chocolate Bar chain, which has locations in New York and Las Vegas,  in addition to 36 others, and is an international corporation with 13,500 employees manufacturing in 21 countries.

Less visible is Delta Galil Industries, whose apparel products most people have worn, although they may not have known it. The company’s clientele includes retail giants such as Target, Wal-Mart, Calvin Klein, Nike, Maidenform and Tommy Hilfiger. Delta has design, development and manufacturing centers on four continents and employs 7,000 people.

Israeli manufacturing also has its grittier side. ICL is one of the world’s leading fertilizer and specialty chemical companies, with a monopoly on certain Dead Sea and Negev Desert extraction concessions. Palram Plastic Products makes polycarbonate, PVC and other thermoplastic sheets for industries such as construction and graphics.

And then, of course, there are high-flying consumer product brand names like Naot, which makes footwear; Ahava, maker of cosmetics with Dead Sea ingredients; and Gottex, the high-fashion swimsuit manufacturer.

Such companies aren’t as big as Teva, which operates in 60 countries, but they play an important role in shaping Israel’s image. Nations have long defined themselves by their manufacturing. The production of luxury goods has shaped French identity, for example, at least as far back as the days of the Sun King, Louis XIV, who nurtured those industries in the belief that the sale of shoes and Champagne would help him dominate Europe.

Like 17th century France, modern Israel is known for the export of footwear — sandals — and edibles — hummus. And in decades the country has developed to the point when it has its own brand, one that mainly plays off the country’s rugged beauty, wholesome natural products and active lifestyle.

“There’s no question that Israel is bolstered by some of its strong brands,” Calkins said. “They reflect back on the country, and the country reflects on the brand. It enhances both.”

Ahava London flagship to close over demonstrations

The flagship London branch of Ahava cosmetics is closing, citing bi-weekly demonstrations that have hurt its profits.

The Ahava store located at Covent Garden, a busy shopping area in the British capital, will close at the end of the week, the Israeli daily Yediot Acharonot reported. The company has other stores in the city, according to the report.

The store has been the site of large anti-Israel demonstrations for more than a year because it produces its Dead Sea cosmetics and lotions on the northwestern shore of the Dead Sea in the West Bank on land claimed by the Palestinians.

The Jewish Chronicle reported in March that the store’s landlord, Shaftesbury PLC, said it would not renew the store’s lease, which expires next week, due to the disruptive demonstrations. It reported in the March story that the store was seeking other locations,

Four demonstrators went on trial earlier this year for chaining themselves to a concrete block inside the store.

“The demonstrations hurt our image and created negative media coverage. We are a commercial company and so we must take cost-efficient considerations,” an Ahava spokesman told Yediot about the decision to close.

Shopping: Only by Israel

Dive into all things Israeli this month in support of the country’s 63rd birthday. From the unique and creative beauty of Israeli fashion designers’ lines to Israel-based organizations that have made it their mission to help the less fortunate, these pieces reflect the Jewish state’s enduring and innovative spirit.

Israeli designer Yigal Azrouël embraces the breeziness of spring while honoring his trademark shabby-chic style in his line of women’s and men’s clothing and accessories. His pink Metal Taffeta Skirt ($515) accentuates a slender physique with its crinkly texture and body-hugging fit. yigal-azrouel.com

The NU Campaign believes in making people human billboards for various causes such as Jewish Heart for Africa, an organization that provides rural African villages with sustainable Israeli technologies such as solar energy panels. This T-shirt ($19), like all other NU shirts, has the “human story” printed on the inside so that the wearer always carries the message. All NU Campaign shirts are manufactured and printed in Israel. nucampaign.org

Leave it to an Israeli to twist together harsh metals and chains and somehow make the result look soft and feminine. From her studio in Israel, Nava Glazer handcrafted her Gold Plated Satin Finish Flexible Cuff ($108) starting with an urban-bohemian brass bracelet and adding 24-karat gold plating. Her consistently trendy pieces have drawn in celebrities like Sharon Stone, who has been photographed wearing Glazer’s combination bracelet/necklaces. navaglazer.erayo.com

Enjoying the lush hints of currants in the 2006 Tzora Shoresh ($37) will go beyond pleasing your palate — the Jewish National Fund has partnered with Tzora Vineyards to donate $1 of every bottle sold in the United States to helping the people of Sderot, victims of ongoing rocket attacks from nearby Gaza. israeliwinedirect.com

The sharp angles and modern aesthetic of the black fabric Kisim Babushka Bag ($142) spices up a traditional favorite with a nod to Russian bubbes. The bold look shows exactly why designer and Kisim founder Yael Rosen attracted attention when her handbags appeared in “Sex and the City.” raincollection.com

AHAVA’s Hope Blossoms bath salts ($22) provide the skin-soothing, muscle-relaxing benefits of Dead Sea salt, and the Israeli company is doing even more for the body by donating part of the proceeds of all sales of this item to the National Breast Cancer Foundation. ahava.com


‘The Bay’ drops Ahava, but not because of boycott

Jewish groups are satisfied that a decision by Canada’s best-known department store chain to drop an Israeli beauty line is unrelated to boycott calls.

A joint statement Thursday by The Bay stores, UJA Federation of Greater Toronto and the Canada Israel Committee said The Bay was dropping AHAVA beauty products “primarily because of sales results which had been declining for several years.”

The announcement came days after a pro-Palestinian coalition, Canadians for Justice and Peace in the Middle East, launched a boycott campaign against The Bay for selling the popular AHAVA line of Dead Sea beauty products.

In a counter move, UJA Federation of Greater Toronto send out an email blast on Jan. 11 calling on consumers to “visit your local Bay store, request AHAVA products and purchase them, if available, within the next 48 hours.” If unavailable, consumers were urged to ask why.

Two days later, the joint statement from The Bay (known as HBC) and the Jewish groups said the AHAVA line was dropped “after a regularly
scheduled review” of the products showed declining sales.

The statement noted that HBC’s decision, though it occurred at the same time as the boycott was launched, was made “solely for commercial reasons,” and that “at no point did political considerations enter into” the decision.

“HBC neither subscribes to nor endorses politically motivated boycotts of merchandise from countries with which Canada has open and established trading relationships, including Israel,” it said.

The announcement added that AHAVA products will soon be reformulated and redesigned as “a totally changed brand,” to be available by mid-spring at HBC stores across Canada.

The international boycott, divestment and sanctions campaign against Israel claimed victory in Britain this week when the leading British retailer John Lewis announced it would no longer sell AHAVA products.

Boycott campaign targets Israeli goods in Canada

Calls for a boycott of Israeli-made beauty products in Canada again have kick-started Jewish counter efforts.

Canadians for Justice and Peace in the Middle East, a pro-Palestinian coalition, has launched a boycott campaign against stores selling the popular Ahava line of Dead Sea beauty products.

On its website, the coalition charges that Ahava “is economically linked to Israel’s occupation of the Palestinian territories,” and that almost 45 percent of the company is owned by “two illegal Israeli colonies” near the Dead Sea.

Furthermore, “the mud and mineral resources” used in the products “are drawn from the Dead Sea shores of occupied Palestinian territory.”

A local counter attack, called BUYcott Israel, is urging consumers to purchase Ahava products and watch out for their removal from store shelves.

In a statement, B’nai Brith Canada said it has received reports from eyewitnesses that employees at The Bay, Canada’s most popular department store, have removed the Israeli products from counters and shelves.

B’nai Brith has written The Bay’s executives, who said they were told by a store employee that the move to delist the products was a “business” decision. 

“We ask that you personally review the decision made by your company not to carry an Israeli product, and issue a statement to assure our members and supporters, as well as your customers, that The Bay will not support the boycott, divestment and sanctions campaign against Israel, which at its core is a shameful example of intolerance and racism,” B’nai Brith wrote in a statement.

Similarly, UJA Federation of Greater Toronto, in an e-mail blast, called on consumers to “visit your local Bay store, request Ahava products and purchase them, if available, within the next 48 hours.” If not available, consumers are urged to ask why.

JTA’s calls to The Bay were not returned.

Protest forces London Ahava store to close

An Ahava store in London was forced to close again after pro-Palestinian activists blocked the entrance.

Two activists reportedly chained themselves to a cement-filled barrel and had to be removed by police, The Jerusalem Post reported.

Ahava produces lotions and bath crystals using Dead Sea minerals on West Bank land claimed by the Palestinians. It has been the target of boycotts and protests worldwide.

The same London store was forced to close twice in 2009, in September and December, due to protests in which activists locked themselves to the same barrels.