Who is the richest kibbutz in the world?

Over the past decade, a remarkable financial transformation has swept through Israel’s kibbutzim, propelling them into the ranks of the world’s richest cooperative communities. This newfound wealth has attracted investors and sparked a flurry of lucrative business deals, with kibbutz companies being sold for staggering sums. In the last six months alone, ten kibbutz firms have changed hands, each fetching hundreds of millions of dollars.

A Decade of Prosperity

The last ten years are widely regarded as the most prosperous in the history of kibbutzim, marking a financial renaissance for these cooperative settlements. Recent weeks have witnessed a flurry of substantial deals, exemplified by the sale of plastic panels manufacturer Plazit-Polygal Plastics Industries to the US-based Plaskolite for a staggering $210 million. This deal stands as Kibbutz Gazit’s second exit, following its sale of meal container manufacturer MCP Performance Plastic to Danish food packaging company Faerch for a valuation of NIS 220 million.

Numerous other lucrative transactions have unfolded in the past three months, demonstrating the financial prowess of kibbutzim. Kibbutz Metzer realized NIS 150 million from the sale of its SP Metzerplas plumbing division to Inrom Construction Industries, while Haogenplast of Kibbutz HaOgen, a leading PVC products developer and manufacturer, was acquired by the German conglomerate KAP for NIS 105 million.

These transactions are part of a larger trend in which Israel’s kibbutzim have welcomed external investors, divested assets, gone public on global stock exchanges, and ventured into investments in startups and fellow kibbutz industries.

Kibbutz Investments and Expansions

Kibbutzim have not only been active sellers but also astute investors. For instance, Kibbutz Mishmar HaEmek, renowned as one of the wealthiest kibbutzim, recently purchased a significant stake in Ricor, a cryogenics company associated with Kibbutz Ein Harod Ihud. This acquisition, valued at NIS 350-400 million, showcases kibbutzim’s willingness to diversify their investment portfolios.

Another noteworthy transaction involved Kibbutz Mishmar HaEmek acquiring approximately a quarter of Bermad, an irrigation products company jointly owned by Kibbutz Evron and Kibbutz Saar. This acquisition, valued at around NIS 450 million, exemplifies the kibbutzim’s appetite for strategic investments.

The Rise of Kibbutz Industries

The kibbutz industry has become a hot commodity in recent years, with serial deal-making dominating the landscape. A comprehensive analysis conducted by CofaceBdi highlights the economic significance of the kibbutz industry. In 2021, kibbutz industries are projected to generate approximately NIS 50.3 billion in revenue, marking a 4.6% increase from the NIS 48.1 billion recorded in 2020—a year that already saw a 2.1% revenue surge compared to 2019. Impressively, revenue per employee in the kibbutz industry stands at NIS 1.5 million, surpassing the NIS 1.2 million figure for the broader manufacturing sector.

Furthermore, the kibbutz industry’s export sales contribute over 50%-55% of its total activity, eclipsing the approximately 40% average for Israel’s industrial sector. These statistics underscore the growing prominence and global reach of kibbutz industries.

Factors Behind the Transformation

The question naturally arises: What has catalyzed the astonishing rise of kibbutz industries over the past decade? Several factors have converged to bring about this financial transformation.

Firstly, privatization within the kibbutz movement has played a pivotal role. By privatizing certain aspects of their operations, kibbutzim have become more agile and profit-oriented.

Secondly, the overall prosperity of global markets has created favorable conditions for business expansion and investment.

Lastly, there exists a strong desire within kibbutzim to maximize the value of jointly-held assets, facilitating the development of critical infrastructure and investments in various kibbutz branches.

The financial transformation of Israel’s kibbutzim is a testament to their adaptability and entrepreneurial spirit. As these cooperative communities continue to thrive in the global business landscape, the question remains: Is this just the beginning of their financial ascent, or could it signify the dawn of a new era for the kibbutz movement? Only time will tell as these resilient communities navigate the exciting possibilities of the future.