Diplomat to Raise NIS 250 Million via Bonds to Double Sales
Translated & summarized from Calcalist by baba
Food and toiletries importer Diplomat plans to raise NIS 250 million through bond issuance to double its sales by 2030. The funds will support the construction of a new logistics center and increase the contribution of its own brands to total sales. The company is also expanding its distribution agreements, including for JTI cigarette brands in Israel, and growing its international presence. Diplomat's net profit fell 39% in the first half of the year, with sales also experiencing a slight decline.
The story in 6 lines · by baba
- Diplomat plans to raise NIS 250 million via bonds to double sales by 2030.
- The funds will finance a new logistics center and boost owned brands' sales share.
- The company will distribute JTI cigarette brands Camel and Winston in Israel starting January.
- Diplomat's net profit dropped 39% in the first half of the year.
- Sales declined 3.8% to NIS 1.76 billion in the first half.
- A new logistics center in Caesarea is under construction, costing NIS 580 million.
Diplomat is planning to raise NIS 250 million through bond issuance to fund its goal of doubling sales of its owned brands by 2030. This move comes five years after the food and toiletries importer completed its initial public offering (IPO) on the Tel Aviv Stock Exchange, where it raised NIS 300 million. The company, controlled by the Waiman and Mandel families with a 38.88% stake and led by Noam Waiman, intends to use the funds to complete its new logistics center and increase the share of its brands, including Starkist tuna, Dorot, and All-In, from 13% to 30% of total group sales within three years. This strategic expansion aims to more than double financial sales from approximately NIS 460 million to NIS 1.1 billion.
Diplomat's growth strategy for the next three years involves deepening its presence in existing markets by adding new brands and suppliers, expanding product categories, and broadening distribution channels. It also plans to build new growth engines by entering new countries and adjacent sectors. As part of its strategy, the company will begin distributing JTI cigarette brands Camel and Winston in Israel starting in January, following the end of a 2.5-decade distribution agreement with Globrands. Diplomat anticipates this venture will generate approximately NIS 440 million annually, excluding excise tax. The company has reportedly secured distributors and acquired specialized distribution vehicles for this operation.
Internationally, Diplomat has recently expanded its operations by taking on distribution for Toblerone chocolate in Greece and Centrum vitamins and Sensodyne and Aquafresh toothpaste in South Africa. The company is now preparing to increase its activity in Georgia and expand into neighboring countries like Azerbaijan and Armenia. Diplomat is currently constructing a NIS 580 million logistics center in Caesarea, which is slated for full operation by June 2028. This center will serve Diplomat Israel and CDSL, a joint venture with Chemipal that has a 20-year exclusive logistics services agreement with Super-Pharm.
The company's need for expansion and new growth drivers is underscored by its financial performance in the first half of the year, which saw a 39% decrease in net profit to NIS 43.7 million. This decline was partly due to the absence of a one-time gain from the sale of an option in its subsidiary Neve Pharma, which had contributed NIS 28 million previously. Sales also contracted by 3.8% to NIS 1.76 billion. Excluding currency fluctuations, the sales decrease was only NIS 4 million, primarily attributed to reduced activity in South Africa. In Israel, the company's core market, sales remained stagnant at NIS 1.1 billion.
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