The Bazan Group operates in the polymer sector by means of CAOL, its wholly owned subsidiary since the end of 2009. Operating in the polymer sector since it was founded in 1989, CAOL has expertise in the petrochemicals sector. It manufactures and markets polymers, primarily polypropylene and low-density polyethylene, which are used as raw materials for the plastics industry. Furthermore, CAOL manufactures feedstock (propylene and ethylene) in order to manufacture polymers.
In recent years CAOL has seen significant increases in its sales, mainly since the manufacture of polypropylene constitutes approximately 66% of the plant’s output (compared with approximately 33% for the manufacture of polyethylene). The Company takes pride in the fact that the gap between the naphtha price and the polypropylene price (the production margin of polyethylene) in its plants is currently only USD 100 per ton. The Company's profits correspond to a stable supply alongside a constant demand for polypropylene. International publications note that the growth in the demand for polyethylene is expected to grow by 4.3% annually.
CAOL operates while being fully committed to compliance with the most stringent standards relating to the environment, manufacturing, products, logistics and technical services. This objective is realized, inter alia, by means of its relentless efforts to improve and adopt a holistic quality control approach. All this is in order to achieve a high level of quality control together with maintenance of safety, environmentally friendly policies and technological innovation.
The principal customers of the Bazan Group in the polymer sector are primarily plastics factories. In other words, those which purchase CAOL products in order to manufacture various products. CAOL has approximately 350 customers in the domestic market and approximately 200 outside Israel (mainly in Europe). Most of its customers are longstanding customers which purchase products on a regular basis and are bound by long-term agreements.
Leading player in its sector
The Bazan Group, through CAOL, is a leading player in the polymers sector, among other reasons owing to the following advantages:
- Cost and availability of feedstock.
- CAOL is the sole manufacturer in Israel of polypropylene and low-density polyethylene (competitive advantage). This is a significant advantage for importers of similar products in the local market because of physical proximity and accessibility for customers.
- Ability to operate CAOL’s production facilities at full capacity (with minimum downtime and for long periods). Existence of advanced technologies and efficient production facilities.Ability to respond to increasing demand for CAOL products in Israel and throughout the world.
- Ability to respond to increasing demand for CAOL products in Israel and throughout the world.
- Compatibility of the Company's operations with the developed Israeli market which presents a constant demand for its products.
- The Company's positioning and reputation as a reliable supplier of quality products.
- Provider of technical backup for customers and constant availability of products in CAOL’s plants (which are located in close proximity to customers in the Israeli market.