From: Bobbin, The Apparel Industry Magazine, June 2001
ELYON Making Business Better
With the textile industry as its "backbone," Israel-based Elyon Textile
and Technology Ltd., a division of Elyon Ltd., deals with many different
sectors of the industry. Its services run the gamut from turnkey projects,
which involve setting up a factory from ground zero until it is running
at about 80 percent efficiency, to refurbishing factories, to solving production
problems, to consulting and implementation of the General Sewing Data (GSD)
software from Methods Workshop, explains Shalom Mandelbaum, director of
Elyon Textile and Technology Ltd.
|In a turnkey project, Elyon sets up all aspects of
production, including hiring and training personnel.
In a turnkey project, Elyon sets up all aspects of production,
including hiring and training personnel.
The company, which also owns production facilities for textiles and
apparel in Israel, Russia, the Ukraine and Moldova, is focused on responding
to customers' needs, says Mandelbaum. For example, in a turnkey project,
Elyon will handle everything, including building the facility, hiring and
training personnel in programming and production planning, recruiting management
and even marketing.
On the consulting side, Elyon Textile and Technology holds the exclusive
distribution rights in Israel, Egypt, Jordan, Germany, Austria, Switzerland
and the Commonwealth of Independent States for GSD, as well as GAD, SAPPHIRE,
SHOE-DAT and OFFICE-DAT, programs used for methods analysis, time and motion
simulations and product costing. Moreover, the company is closely associated
with a series of academic organizations, including the Shenkar School of
Textiles in Israel, as well as a series of institutions and universities
in Germany and England.
Privately held Elyon Textile and Technology was founded approximately
15 years ago, bringing Israeli know-how into what was then the Soviet Union.
In the past 10 years, the company has started up around 15 to 20 plants,
primarily in apparel, which range from relatively small operations in Israel
to "Soviet-style giants" of 4,000 to 4,500 employees.
"We've set up plants for everything and anything. We've set up plants
for ladies' underwear, for suits that go to Marks & Spencer to [other
apparel] that goes to JCPenney in the States," says Mandelbaum.
In other scenarios, Elyon helps companies relocate and find partners.
With the basic minimum wage today in Israel at about $800 per month, many
Israeli companies producing lower-end merchandise have established facilities
in either Jordan or Egypt, says Mandelbaum. Small companies, in particular,
have sought Elyon's assistance in the move.
"Some of the bigger companies have asked us for assistance too, because
one of our mode of operations is [to] find local people you can work with.
They'll teach you the ropes."
Elyon has Egyptian and Jordanian partners that advise the company on
what will and will not work in their local regions. Moreover, they know
government officials and the local industry. "To come in as a total outsider
in any country is asking to lose money. So the first thing we do in most
operations is to find somebody we can trust in that country and work together
with them," says Mandelbaum.
Jordan and Egypt: Going In
As for doing business in Jordan and Egypt, Mandelbaum finds the two
countries to be distinctly different. Egypt is ruled by a bureaucracy,
which makes it very difficult to get things moving there.
"It's not only a problem of language, it's a problem of concept," he
says. For example, if you hail a cab in the United States, Israel or any
Western country, and you're 20 miles away from the airport in the middle
of rush hour and have a flight in 20 minutes, the cab driver will tell
you that it is impossible. In Egypt, the cab driver will say "inshalla,"
which means with God's help, or God willing. Basically, that means "if
God will make a helicopter out of my [cab] and he can do it, then it will
be done," explains Mandelbaum.
"[The cab driver] will not say no. It's against his culture. It's not
that he's lying. And this is something very, very important that people
have to realize when they're working in different countries. You have to
learn the culture before you learn the language."
As a result, in Egypt it is important to learn to phrase your question
in such a way as to get an accurate response. For example a closed question
such as "Will you be able to deliver 20,000 dozen a week on time?" will
get you the response: "Inshalla, no problem." A better way of asking this
would be: "How many dozen of this product can you produce in a week?"
"In short, people are really nice, and if they can give you an answer
that will please you, they will," explains Mandelbaum.
As for Jordan, Mandelbaum says he finds it to be "very pleasant" and
remarks that a lot of Jordanian businessmen have a "go-and-get-it" culture.
While Elyon has not yet set up a total plant in Jordan, it has done a lot
of consulting work there. Because it's just a two-hour drive from the heart
of the Israeli industry, most companies prefer working on their own or
have found a local Jordanian to work with, he says, noting that most of
the Israelis going into Jordan are setting up joint ventures.
Currently, the company is working with a Pakistani company in Jordan
to set up a multilateral operation in one of the Qualifying Industrial
Zones (QIZs). The fabric will come from Pakistan and be sewn in Jordan,
with 8 percent of the components coming from Israel. Finally, the product
will be shipped out of Haifa, Israel, to the United States, receiving duty-free
|"We've set up plants for everything and anything."
-- Shalom Mandelbaum Director Elyon Textile and Technology Ltd.
As for the general direction in which the apparel industries in these
countries will head, Mandelbaum says that there are a lot of "ifs" that
will determine the path. For example: Is there going to be a final peace
agreement? How much are the Jordanians and the Egyptians going to learn
from the Israelis? How much can the Israelis teach companies without overstepping
As it stands right now, Mandelbaum believes that Jordan is heading in
the right direction, and that the Jordan-Israel partnerships will continue
to supply medium-range products to the U.S. market. He does stress, however,
that to avoid "surprises," it's important to have a person on the ground
On the other hand, Mandelbaum thinks that Egypt may be missing out on
some excellent opportunities. For example, Egyptian cotton is among the
best in the world, with extremely long strands of fiber that are so thin
that they look and feel like silk and can be made into 90/1 or 80/1 yarn,
he explains. Unfortunately, says Mandelbaum, he is not aware of a single
cotton mill in Egypt that can produce this high-end cotton. "They are taking
the best cotton in the world and making 30/1, which is the basic cotton
you use for standard T-shirts and sweatshirts."
Furthermore, offers from Elyon Textile and Technology and other companies
to trade, for example, two bales of standard staple cotton for a single
bale of Egyptian cotton have been turned down. Mandelbaum believes the
problem is more cultural than financial. With a textile tradition that
goes back 5,000 years, the Egyptians are reluctant to accept advice from
outsiders. The response is the same with respect to dyeing, he says, noting
that product dyed in Egypt often comes out in five different shades in
the same bundle.
Production costs in Egypt are approximately 5.5 cents per minute, compared
with Jordan's at around 7 cents per minute. However, Egypt's higher seconds
rate and overhead — which stems from the fact that most operations have
not been streamlined — may make Jordan a better bet.
Nevertheless, things in Egypt are changing, and Elyon has had good results
with some plants in the country, stresses Mandelbaum. "What you need is
the supervisor, the engineer, and the owner pulling the same way." Things
don't always work perfectly, but "this is where we come in — what would
you need consultants for if there were no problems?" he concludes.