MEET DAN BARISH Dan can help you prepare for a secure retirement with investments in such products as The BEST of AMERICA® variable annuities. Drexel Burnham Lambert junk- bond kingpin Michael Milken. And when Bankers Trust de- manded Koor go bankrupt after it had defaulted on a debt to the investment bank, it was appar- ent that the time had come to per- form major surgery on Israel's largest conglomerate. "So we decided to sell," remi- nisced Mr. Gaon. 'We had to close down factories, with RIP — that is 'rest in peace' — stamped all over them." In essence this meant launch- ing — though not in one day — the largest ever lay-off move in Is- raeli history, with roughly half of Koor's workers losing their jobs, sometimes against the backdrop of demonstrations, but generally in a surprisingly calm setting. Ap- parently, the sense of changing times had permeated deep into the Israeli psyche. So much so, that when Mr. Gaon decided to do what for Koor's founders would have been preposterous, i.e. replace the os- tensible control of the workers with the unabashedly greedy ownership of Wall Street financiers, hardly anyone in Israel raised an eye- brow. Hevrat Haovdim was gradually wrest- ed of its 71 per- cent stake in Koor, ultimately selling roughly 20 percent of the con- glomerate to U.S.- based Shamrock Corp. for some $250 million, and 36 percent to the public. The re- maining shares are held by Is- rael's large banks. In 1991, after persistent losses for half a decade, Koor returned to the black, partially benefitting from the financial arrangement with the government and the banks. However, this was against a background of bank debts and heavy financial commitments. But Koor Industries has now established itself as Israel's most profitable industrial company, topping in its net income all local publicly-traded companies for 17 consecutive quarters. With some 30 subsidiaries and over 20,000 employees in Israel and around the world, Koor's 1995 net income reached $156 million on sales of $3.3 billion. Koor shareholders enjoyed a 24.5 percent return on equity, and exports exceeded $1 billion for the first time in the company's history, accounting for over 7 percent of Israel's entire annual industrial output and ex- ports. Now, with annual revenues of some $3.7 billion, exports totalling $1.5 billion, $1.1 billion in equity, and profits in the region of $160 million, Koor is looking ahead to the next century with a firm busi- ness plan in mind, says Mr. Gaon. The adopted principle is sim- ple: Decide on your core business and stick to it. Until recently Koor had extensive interests, ranging from food and footwear to agrochemistry and tourism. "But why would a foreign investor want to put his money in my shoe factory?" said Mr. Gaon. "If he's going to invest in shoes, he'll look to Adidas. So we must concen- trate on the heart of our busi- ness." And in the case of Koor, that heart is primarily in the high-tech, construction materials and agro-chemical sectors. The question for Mr. Gaon though, as the company sells off its non-core industries, is where he can expand in a country as small as Israel. Moreover, con- sidering that cement monopoly Nesher, and formerly privileged Bezeq telephone suppliers Tadi- ran and Telrad contributed the lion's share to Koor's profits, the company must now brace for a post-monopolistic age, which may soon result in a Japanese cement producer operating in Israel and has already produced new supply agreements with Bezeq which are far less favorable to Koor than the deals it had previously had with the telephone com- pany. Mr. Gaon says the future of his company lies in globalization. The more Koor will be geographi- cally spread, the less it will be vulnerable to currency fluctua- tions, which last year — with a relatively strong shekel — hurt the company's balance sheets. Last year the company spent $200 million in taking over com- panies that will produce and mar- ket chemicals in Brazil, Argentina and Spain. Mr. Gaon says that by the end of 1997, some 40 percent of Koor's activities will be over- seas and forecasts that the figure will rise to 50 percent by the end of the century. In terms of Koor's global ex- pansion, Mr. Gaon has very clear likes and dislikes. Russia and its environs are very definitely out. Despite the huge influx of Russ- ian immigrants, he feels Israelis do not understand the mentality of the new post-communist regimes. It will soon be part of one large European market, and there is no doubt countries such as Germany have clear geo- graphic, linguistic and cultural advantages. As far as Mr. Gaon is con- cerned, the focus is on the Far East and its emerging markets. The only large, non-core busi- nesses currently owned by Koor are in the tourism sector, includ- ing substantial interests in Arida, the Sheraton hotels, Isram and Eurodollar. ❑ , (c) Jerusalem Post 1997 The BEST of AMERICA allows you to choose from among 10 of America's top names in money management, including: Dan Barish Vice President NATIONWIDE reyfus Fidelity Investments e ADVISORY SERVICES, INC. Nationwide Is on your side Nationwide Advisory Services, Inc. The Dreyfus Corporation Mellon Equity Associates Fidelity Management & Reasearch Company TCI Portfolios, Investors Research Corporation Dan and his associates at Comerica Securities are available to meet with you, at your convenience. For more information on The BEST of AMERICA variable annuities, including charges and expenses, please obtain a prospectus by calling Dan at (810) 948-2902. Please read it carefully before you invest or send money. Before investing, please understand that annuities are not insured by the FDIC, NCUSIF, or any other government agency, are not deposits or obligation of, or guaranteed by Comerica Bank or any of its affiliates, and involve risk, including possible loss of principal. NOT FDIC INSURED May lose value No bank guarantee The BEST of AMERICA variable annuities are underwritten by Nationwide Life Insurance Company, Columbus. Ohio. Variable annuities are offered by Comerica Insurance Services, Inc., an insurance agency and subsidiary of Comerica Bank, and are made available through Comerica Securities, a broker-dealer member NASD/SIPC and an affiliate of Comerica Bank. Nationwide® and The BEST of AMERICA® are federal service marks of Nationwide Mutual Insurance Company. Copyright 1997. 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