Tnuva Invests NIS 30 Million to Relocate Pasta Factory Amid Legal Disputes
Tnuva is set to invest approximately NIS 30 million to move its partially owned pasta factory, Rico, to the Olivia spreads factory site in the Rehovot dairy complex. This move follows Tnuva's recent announcement to close the Olivia spreads factory within two months, located in the same Rehovot complex where Tnuva produces liquid milk and cream. The relocation is planned for the first quarter of next year and is partly driven by the property owners in Beit Dagan demanding the evacuation of the current pasta factory premises.
Olivia was founded in 1990 by food engineer Yoel Benesh, who sold control to Kardan six years later. Tnuva acquired 50% of Olivia from Kardan in 2000 for NIS 7 million plus a NIS 4 million shareholder loan, and by 2002, it purchased the remaining shares and loan claims for NIS 8 million, becoming the controlling shareholder. Today, Tnuva's shareholder loan to Olivia stands at NIS 34 million. Since Olivia cannot repay this loan, Tnuva plans to recognize it as a capital loss after closing the factory, which can offset corporate profits.
Meanwhile, Tnuva's acquisition of a 51% stake in fresh pasta maker Doro Italian Products in 2019 for about NIS 21 million has led to ongoing legal disputes with the founders, Shay Alon and Gil Ben-Dov. The disagreement centers on the company's valuation ahead of an option to buy the remaining shares. The founders' valuation consultancy estimated the company at NIS 142 million, while Tnuva's consultant valued it at NIS 79 million. The founders have filed four lawsuits against Tnuva, all dismissed so far, with appeals pending in the Supreme Court.
Doro Italian Products, established 12 years ago, operates a factory in Beit Dagan employing dozens and is projected to generate NIS 56 million in sales and NIS 12 million in profit in 2024. Current monthly sales are around NIS 6 million, indicating an annualized turnover of approximately NIS 70 million. The legal disputes include claims over rental fees, distribution commissions, conflicts of interest involving the company's legal advisor, and defamation suits against company executives and a former minister.
