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Impact on Israel’s Economy

ICL’s contribution to the public interest is reflected by a range of data points. Every year, ICL invests significantly to develop its industrial capabilities. It supports the livelihoods of approximately 32,000 families across Israel (directly and indirectly) and serves as the economic backbone of the Negev region. \

ICL commissioned a study from BDO, on its impact on several economic and social indicators in Israel. The study, published in 2020, found that in 2019, ICL’s contribution to Israel’s GDP (Gross Domestic Product) was ILS 14.9 billion ($4.1 billion). ICL is a leading exporter, deriving approximately 95% of its revenues from global sales, thereby contributing to Israel’s balance of payments. ICL invests tens of millions of USD in Israel every year in addition to its extensive ongoing operations. These investments help expand Israel’s economy and boost its growth.

8.2
Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labor-intensive sectors

ICL’s Impact on the Negev Region

ICL’s impact on the economy and quality of life in the Negev region is far reaching, and the Company serves as the economic backbone of the Negev. ICL supports the livelihood of approximately 32,000 families in Israel (directly and indirectly), including around 19,000 families in the Negev region of southern Israel. ICL is responsible for 15% of the Negev’s economic activity, worth approximately ILS 10.7 billion ($2.95 billion) in GDP. The Company is vital for the economic strength of this region and for its continued growth.

Direct and Indirect Employment

ICL is directly responsible for the livelihood of 4,200 families in the Negev. The Company is considered a high-quality employer, paying competitive wages, or higher, in all of Israel (as well as in all other non-Israel regions of its operations). In addition, the impact of its operations and investment in the Negev influences the communities of the eastern Negev in multiple areas, including small industrial enterprises, privately-owned businesses, commerce, welfare, education, and culture. For every employee directly employed by ICL, additional 7.1 employment opportunities are created. These include the indirect impact of ICL’s suppliers (3.7 additional jobs created in Israel per each ICL employee) and the induced impact created due to increased consumption by ICL employees and suppliers (3.4 additional jobs created in Israel per each ICL employee).

10.2
By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status

ICL’s Impact on the Negev Region

Overall, ICL has a significant impact on multiple levels of employment in Israel. This includes the direct impact of 4,500 jobs, the indirect impact of an additional 12,200 jobs, and the induced impact of an additional 15,100 jobs for a total of 31,800 jobs.

10.2
By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status

By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status

 

Some areas in the southern part of Israel are characterized by lower employment opportunities and high economic inequalities. This is especially true in some of the periphery cities of southern Israel and Bedouin communities. 

Of the periphery cities in the eastern Negev (mainly Dimona, Yeruham and Arad), ICL’s activity results in 12% of employment and 21% of wages.

ICL supports the livelihood of approximately 5,600 Bedouin-Israeli employees, mostly as contractor workers employed by ICL’s direct contractors in varying capacities. These employees account for around 16% of all Bedouin-Israeli employees that are employed in the Israeli private sector. ICL is also acting to increase the number of Bedouin-Israeli employees and Arab-Israeli employees directly employed by the Company, and has established quantitative targets to achieve this important goal, and to further reduce inequality in Israeli society (read more).

1.2
By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions

Economic Impact

ICL’s contribution to Israel’s national economy stands at ILS 14.9 billion ($4.1 billion).

The contribution of ICL plants in southern Israel amounted to 15% of the GDP of the Negev region and to 1.2% of the GDP of Israel (2019 figures). ICL’s contribution to the GDP of Israel was about ILS 14.9 billion ($4.1 billion) a year, of which approximately ILS 10.7 billion ($ 2.95) was in the Negev.

In addition to the positive impact on the Negev’s economy, ICL helps to develop tourism at the Dead Sea, further enabling the creation of thousands of additional jobs. Without ICL’s production activity at the Dead Sea, the southern basin of the Dead Sea would have dried up completely and Dead Sea hotels would be unable to operate. Read more.

ICL invests in Israel, in addition to its extensive ongoing operations. Together, these investments help expand economic activity in Israel and boost its growth.

The great majority of the quantitative data above is based on a study conducted by BDO and published in July 2020 entitled: ‘ICL’s Contribution to Israel’s Economy and its Southern Region’,(Hebrew).

ICL’s Impact on the Balance of Payments

ICL is consistently among the top 3 largest exporting companies in Israel. The export value of its products is significant for Israel’s balance of payments and the reduction of the country’s trade deficit over the years.

ICL’s Impact on the Public Savings

The Israeli public is the largest shareholder of ICL. In fact, most Israeli citizens have a direct or indirect stake in ICL through their pension and provident fund savings plans, as well as other savings and investment instruments. As one of the pillars of the Tel Aviv Stock Exchange, ICL shares are an anchor for many stock portfolios and the trading volume of its shares is one of the highest in Israel. Over the past decade, most Israeli citizens have shared in ICL profits.

ICL Impact on Israeli Government Budget

In Israel, ICL pays a significant portion of its profits to the government. ICL makes multiple payments to the State of Israel, including taxes, royalties related to extraction of potash and other minerals and additional amounts. 

ICL payments to the Israeli government have been increasing even further due to various measures taken by Israel’s government, such as: exclusion from the Law for the Encouragement of Capital Investments, funding of the national project for ensuring the existence of the Dead Sea Hotels, increase in royalties from mining and royalties on industrial products, and recommendations for additional taxation by the Sheshinski Committee II (natural resources taxation) For further information, see “Item 10 – Additional Information— E. Taxation” and Note 15 to our 2022 Annual Report.

The total income of the state of Israel from the operation of ICL in 2022 was about $ 1.5 billion.

Sustainability Reporting Disclosures:
Disclosure: 203-2