Pool Cleaner Recall Hits Israeli Company, Kibbutz Owners Face Losses
Mitronics, an Israeli manufacturer of robotic pool cleaners based in Kibbutz Yizrael, announced a recall of its new "Nea" brand pool vacuum due to potential cracks in its casing. These cracks could allow water to enter, leading to electrical shorts or even fires. The recall has caused the company's stock to plummet, resulting in a paper loss of 1 billion shekels for Kibbutz Yizrael on the day of the announcement.
The company has been in a deep crisis since the end of the COVID-19 pandemic, facing declining global demand and increasing competition from Chinese manufacturers. Ironically, the "Nea" product was intended to be Mitronics' solution to compete with cheaper Chinese alternatives. Previously, Mitronics produced its high-quality "Dolphin" brand robots in Israel, considered the "Rolls-Royce" of pool cleaners. However, Chinese companies offering mid-range quality products at lower prices have captured significant market share.
In response, Mitronics decided to enter the lower-cost market segment by importing a product from Chinese manufacturer Yamoo Technological. This product is marketed in Israel under the "Nea" brand for approximately 780 shekels and is now subject to the recall. The company's market value has collapsed from a peak of 9 billion shekels in 2021 to just 245 million shekels.
The crisis began during the pandemic when home improvements, including pool upgrades, boosted sales. Mitronics' management, overly optimistic about continued high sales, built up large inventories. This proved problematic when consumer habits returned to normal after lockdowns ended. The "Nea" recall exacerbates Mitronics' already difficult financial situation. The company reported a 15% decrease in revenue for the second quarter of 2026, totaling 437 million shekels, and a loss of 8 million shekels, compared to a profit in the same period last year. The first half of 2026 saw a loss of 34 million shekels.
Kibbutz Yizrael, the controlling shareholder, had previously rejected generous offers to purchase Mitronics. However, given the deteriorating situation, recent discussions have begun with FIMI fund regarding a potential controlling stake acquisition, though the outcome remains uncertain.
