SodaStream to close West Bank factory targeted by boycott campaign

The US company said its decision was made on commercial grounds. SodaStream will shift production to a new facility in southern Israel in 2015. 

Israeli drink maker SodaStream International Ltd. said Wednesday it will close a West Bank factory that has been targeted by boycott activists and move the facility to a location inside Israel.

SodaStream representative Nirit Hurwitz said that the decision to move the factory to Lehavim in Israel's southern Negev region was for "purely commercial" reasons and was not connected to pressure from pro-Palestinian activists who had boycotted the company because of its location.

A pro-Palestinian boycott movement has targeted businesses that operate in the West Bank, saying they benefit from Israel's occupation of the territory, which was captured in 1967 and is claimed by the Palestinians. The Palestinian boycott campaign welcomed Wednesday's announcement, saying its boycott caused retailers to drop SodaStream, known for its machines that allow users to make their own carbonated beverages.

Hurwitz said the new location received a $20 million grant from the Israeli government. The new location "will become our flagship manufacturing site and is expected to deliver operational excellence and result in savings of 2 percent across our entire cost base." she said. The move is expected to be complete by the end of next year.

SodaStream has defended the factory in the past, saying it employs hundreds of Palestinians and gives them equal benefits as Israeli workers. Most of them are from nearby West Bank towns.

The company said it would try to keep all of its workers at the new plant, though they will face lengthy commutes and need permits to work inside Israel. For Palestinian workers from the nearby city of Ramallah, the new facility will be over 100 kilometers (60 miles) away. From Hebron, another nearby city in the southern West Bank, the commute will be about 50 kilometers (30 miles).

"We are offering all employees the opportunity to join us in Lehavim, and specifically, we are working with the Israeli government to secure work permits for our Palestinian employees," SodaStream Chief Executive Daniel Birnbaum said.

Actress Scarlett Johansson got caught up in the controversy over the plant's location earlier this year after she agreed to serve as SodaStream's global brand ambassador. The decision upset Oxfam International, a humanitarian aid organization for which Johansson had served as a global ambassador for eight years, and she parted ways with the charity.