UCT Israel CEO: Profitability, Not Zionism, Keeps US Investors Here
Translated & summarized from TheMarker by baba
UCT Israel CEO Yehuda Salhov stated that the company's profitability, not ideology, is key to its US ownership. The war has caused significant damage and customer concerns, but the Israeli plant's high output and profitability have prevented relocation. Salhov highlighted the need for government support, including tax benefits and foreign worker quotas, and noted challenges in finding skilled labor and underdeveloped infrastructure in the north. The company's revenue has doubled in five years, with AI and chip industry growth driving expansion.
The story in 5 lines · by baba
- UCT Israel CEO Yehuda Salhov stated US owners prioritize profitability over Zionism.
- The war has caused significant damage and customer concerns for UCT Israel.
- The Israeli factory's high output and profitability have been crucial for its continued operation.
- Salhov called for government tax benefits, innovation incentives, and more foreign worker quotas.
- UCT Israel's revenue has doubled in five years, with AI and chip industry growth driving expansion.
Yehuda Salhov, CEO of UCT Israel, stated that while the company has navigated intense periods, the recent war has caused significant damage. UCT Israel, formerly Melat, manufactures components for the chip industry and is now owned by a global American corporation, operating as an independent business unit. The company has a factory in Nof Hagalil employing 800 workers.
Salhov explained to Eitan Avriel, editor of TheMarker Magazine, that the US management fears a scenario where a missile strike could halt production. Although employees showed remarkable dedication, some customers began seeking alternatives. When asked about pressure to relocate the factory, Salhov asserted that "Zionism doesn't interest Americans." He emphasized that the Israeli plant demonstrates higher output and profitability compared to the company's facilities in Thailand and Malaysia, attributing this to employee commitment, automation, technology, and accumulated knowledge.
Salhov highlighted the need for government tax benefits, innovation incentives, and increased quotas for foreign workers to overcome obstacles. He noted the difficulty in bringing in foreign workers, contrasting it with the availability of many unemployed individuals in hotels. While the Israel Innovation Authority assists startups, Salhov believes it doesn't sufficiently support industry.
He added that UCT Israel spends nearly NIS 200 million annually on Israeli suppliers, many located in the north, thereby supporting local industry. Salhov stressed the importance of a strong domestic industry, noting that in times of conflict, companies turn to local manufacturers like UCT Israel rather than those in China or India.
Addressing the challenge of finding skilled workers in the north, Salhov observed that Israelis prefer management roles over production work, making it difficult to fill positions requiring 12-hour machine operation. While the company hires many qualified individuals from the Arab community for management roles, recruiting for production is challenging. UCT Israel is actively recruiting in the north but faces a shortage of engineers and technologists, leading them to train individuals with no prior background for diverse roles.
Salhov also pointed to underdeveloped infrastructure and long distances as hindrances for northern workers. He mentioned that the company's revenue has doubled since its acquisition five years ago, from $250 million annually, with ambitions to reach billions. The AI revolution and the expansion of the chip industry, for which UCT Israel produces components, are contributing to the company's growth.