Perrigo mulls closing Israel plants

Perrigo Company, one of the Negev’s biggest and most important employers, announced Tuesday that as part of its cutbacks, it is looking for strategic alternatives to Israel for the production of its active ingredients. The company has With 1,100 employees in Israel, Perrigo has two plants for producing active ingredients: one in Yeruham and another in Ramat Hovav.

If the Ramat Hovav plant is shut down and activity in Yeruham is cut back, it will be a hard blow to the areas where these facilities are located. As recently as 2012, Perrigo announced an additional $40 million investment in the plants and the hiring of 100 more employees, after the number of employees had already grown by 40% in years prior. On the same occasion, Perrigo announced that it had invested over $280m. in its business in Israel in the preceding years. Perrigo launched its new plant in Yeruham in 2016, in which it invested NIS 180m.

Perrigo’s facilities were a great source of pride for the Israel Investment Center, which portrayed them as one of the important results of the government’s policy of encouraging investments in the south. Perrigo’s employees, both those with academic degrees and those without any, underwent lengthy training for working with Perrigo’s pharmaceutical production technologies, usually in chemical generics. There are very few other places at a reasonable distance from their homes in which they can find work using these skills.

Responding to the company announcement, MK Shelly Yachimovich on Tuesday said, “Perrigo’s managers cheated us when they enlisted us to help fight against a hostile takeover by Mylan N.V. by promising to keep their Israeli workers. The company’s Israeli and international managers made an effort to persuade me personally that if Mylan took over Perrigo, it would sell its business in Israel piece by piece to the highest bidder, leading to mass layoffs, while Perrigo was supposedly committed to the Israel market and keepings thousands of workers, mainly in Yeruham and Ramat Hovav.

“We demand that Perrigo keep its promise, or at least to make any sale contingent on keeping the workers and a promise to continue employing them. They should remember that the Israeli market is what prevented the hostile takeover. We won’t ignore such malign intentions.”

It is possible, however, that if Perrigo decides to sell its business here, it will find a buyer capable of retaining some of the workers, together with the plant itself. It is certainly possible that an international generics company, or a medium-sized company such as Dexcel Pharma or Taro Pharmaceutical Industries Ltd. could buy it.