17/12/2020
We have some news. I guess you already noticed that 2020 was a tough year for many people and for many companies. It was also a crazy year for MiniEcig. Let's make it quick and clear. The PayPal account is locked since we cannot ship the orders. So currently we cannot make refunds any longer till the situation gets better. The factory is working, it's alive, and has many orders, but the amount of loans and other mandatory payments, like wages, is more than the factory can pay.
We try to get into a program for support for businesses impacted by covid and now run the negotiations about this.
Let me explain what is going on since basically all we can do is to stay open and clear.
The factory was closed several times due to covid restrictions and for quite some time we had t work in late-night shifts since no more than 30% of workers could attend the factory at once.
Obviously, the factory makes no money when it's closed, but the problem is that the loans for CNC machines work day and night and they are not restricted by covid. Too bad for the factory.
Another interesting fact about the Israeli industry is a common practice related to payments. Normally, the factory gets paid only when the product reaches the end customer which actually pays for it. For example, if the factory produces screws and nuts which are later used in a car suspension then the factory will get paid only when the car is actually built, shipped to another side of the country, found the actual family who wants this exact car and was finally bought by that family. Then the payment reaches all the companies which participated in the production. Normally, the factory gets the payment in 6 months after the order was completed but for large orders. It's quite usual to get paid in a year. As you can see, the factory can be fully loaded and have no money at the same time which works more or less well since all the factories in the chain do not pay each other till they all get the payment from the end customer. Now let's add monthly mandatory payments on top and we'll see that starting a new factory should be a nightmare since the factory should work for free, getting no payments, for half of a year. Another big problem comes when the factory is forced to stop, like what happened this year, and then the loans are still in place, but the chain of payments gets stuck. Even if the factory had an agreement for payments in 6 months with its customers, they are also hit by covid and according to the common practice, they just delay the payment. That's how the whole industry is impacted.
There is a special national program for business support in Israel which is dedicated specially for companies hit by covid. We now try to get into this program. The chances are quite good. We don't even need real support. All we need is the loans to be prolonged and that will just reduce the mandatory monthly payments. We'll see what will happen.
Thanks to all of you for waiting and let us apologize for this situation. We still hope that the next year will be easier.
Have a nice day and take care. All in all, health and life are way more important than factories.