Flextech and the Technical Segment: Why 32% of Sales Carries Most of the Profit
The main article showed that Ginegar’s technical segment is carrying the profit. This follow-up sharpens the point: the engine rests on NIS 199.1 million of sales and NIS 34.9 million of segment results, but also on a business concentrated in Flextech, heavy European competition and an order book that is not material.
The main article already showed that Ginegar’s 2025 pressure sits in cash flow and working capital, but also that profit itself is leaning more heavily on the technical segment. This follow-up isolates only that point: what actually sits inside that 32% of sales, why it produces most of the segment results, and whether Flextech is really becoming the group’s earnings anchor.
The short answer is yes, but not in the simple way the consolidated numbers suggest. The technical segment is already Ginegar’s profit engine, but it is a narrower, more competitive and less protected engine than the headline implies. It is driven mainly by sacks, bags and covers, not by the smaller reservoir-lining business. It does not lean on one anchor customer, it does not have a material order book, and the company itself says its European market share is not material.
Four points frame the picture:
- 32% of sales, 64% of segment results. In 2025 the technical segment generated NIS 199.1 million of revenue, but NIS 34.9 million of segment results, versus only NIS 19.3 million in agriculture.
- This did not start this year. The technical segment already carried 77% of total segment results in 2023. 2024 narrowed the gap, and 2025 opened it again.
- The core is extremely concentrated. Sacks, bags and covers generated NIS 189.4 million, about 95% of technical-segment sales. Reservoir-lining films contributed only NIS 9.7 million.
- Flextech is the critical production layer. Ginegar has owned 100% of it since June 2022, and it is the platform now expanding in Italy through land, a new building, an additional multilayer line and equipment upgrades.
The gap between sales and profit no longer looks accidental
The key point is not only that the technical segment has stayed at roughly one third of group sales. The key point is how much segment result it extracts from that one third. In 2025 the technical segment represented 31.7% of revenue, but 64.3% of total segment results. In 2024 it was 31.9% of revenue and 52.9% of segment results. In 2023 it was 31.4% of revenue and 77.4% of segment results. So 2025 did not create this engine. It reminded readers how concentrated Ginegar’s earnings power becomes when agriculture weakens.
| 2025 metric | Agriculture | Technical segment |
|---|---|---|
| Revenue | NIS 429.2 million | NIS 199.1 million |
| Gross profit | NIS 67.3 million | NIS 45.9 million |
| Segment result | NIS 19.3 million | NIS 34.9 million |
| Gross margin | 15.7% | 23.0% |
| Segment-result margin | 4.5% | 17.5% |
That gap widened in 2025 without a real surge in technical-segment revenue. Sales there rose only 0.5% versus 2024. What changed was earnings quality. Technical gross profit increased by NIS 4.2 million while selling, marketing and R&D expenses edged down to NIS 11.0 million. The result was a 14.8% rise in segment results. Agriculture looked almost opposite: revenue rose 1.5%, but gross profit fell by NIS 12.6 million. Even after a NIS 4.9 million decline in selling, marketing and R&D expense, segment results still fell 28.5%.
That is the difference between a volume engine and an earnings engine. Agriculture still brings the scale. The technical segment produces the surplus.
What is actually inside the technical segment
This is where the easy headline can mislead. “Technical applications” sounds broad. In 2025, almost the entire segment was carried by one product group.
Sacks, bags and covers generated NIS 189.4 million, about 95% of the segment. Reservoir-lining films generated only NIS 9.7 million. That means the economics of the technical segment do not mainly sit in local infrastructure projects. They sit in a broader industrial offering: vacuum bags used in composite-material production for wind energy, aerospace, automotive and marine industries; protective films for buildings under construction or renovation; other technical films for industrial uses; and assorted bagging and packaging solutions.
There is good news here, but there are also clear limits.
The good news is that the activity is relatively diversified. No customer in the segment accounts for 10% or more of group revenue, and the company also says there is no single customer whose loss would materially affect the segment. There is no material dependence on any one sales channel either, even though European sales are conducted mainly through distributors and in part directly by Flextech.
The limits matter just as much. This is not an order-book-protected engine. The company says explicitly that the segment’s order book is not material and that activity is affected by projects and tenders. The demand profile is less seasonal than agriculture, but it is not truly smooth. It still depends on project timing. So the protection here does not come from long-duration backlog. It comes from manufacturing flexibility, customer-specific adaptation and delivery capability.
And on competitive positioning, the picture should not be overstated. In Europe the company describes significant competition from international and local producers and estimates that its market share in technical films is not material. It also says that in reinforced bags there are no material barriers to entry or exit. That means this engine can be highly profitable, but it should not be described as dominant, or even as a heavily protected niche.
Flextech is the critical production layer, but also the bottleneck
Flextech is not just an old subsidiary. Since June 2022 Ginegar has owned 100% of it, so any improvement in capability and earnings now belongs entirely to the group. That matters because when the technical segment is read through 2025, the Italian production platform is increasingly the place where the earnings weight actually sits.
At the end of 2025 Flextech employed 114 people, versus 112 at the end of 2024. Of those, 96 were in operations and production. The company says the increase in headcount over recent years reflects preparation for a gradual expansion in production capacity. In other words, this is not just a commercial build-out. It is a manufacturing build-out.
The critical number here is utilization. Flextech’s theoretical annual capacity stood at 9,000 tons at the end of 2025, and actual utilization was 89%, after 95% in 2024 and 92% in 2023. This is no longer an underused platform waiting for orders. It was already operating at a relatively high load before the current expansion is fully complete.
That is what makes the next step important. During 2024 Flextech began a capacity-expansion process that includes land acquisition, construction of a new industrial building, purchase and installation of an additional multilayer production line, and renewal and upgrading of an existing line and equipment. The company says the additional line and the planned upgrade increased Flextech’s capacity by about 2,000 tons, and that the overall expansion process is expected to be completed in the first half of 2026. The end-2025 balance sheet already reflects this in part: the increase in PP&E included advances of about NIS 10 million for machines ordered for the Italian production site.
That creates a clear test. If 2025 proved that the technical segment carries the earnings load, 2026 has to prove that it can also widen the production base without sacrificing efficiency.
So are Flextech and the technical segment Ginegar’s real anchor
At the earnings level, yes. At the full-group economics level, not by themselves yet. Agriculture still accounts for 68% of sales, so weakness there still shapes the consolidated picture. But anyone trying to understand where Ginegar’s operating profit actually comes from in 2025 should not start in greenhouses. They should start in Italy and in the technical segment.
That is also why the follow-up read has to be sharper than the headline. Flextech is not just an industrial growth story. It is already Ginegar’s main earnings engine. But it operates in a competitive market, without a material order book, and with a clear need to finish the current manufacturing expansion if it wants to sustain the next stage. On top of that, the company itself says it does not expect tariff relief for the group’s industrial products that are mainly produced in Italy. So not every tailwind that may help agriculture will help this engine too.
The thesis of this follow-up is straightforward: 2025 showed that the technical segment is Ginegar’s island of profit, and Flextech is its center of gravity. What still has to be proven is not the existence of that profitability, but its durability. If the Italian expansion lands cleanly, and if the technical segment continues to hold a high margin even without the protection of a material backlog or customer concentration, Ginegar will have a credible earnings anchor. If not, 2025 will be remembered as the year in which one third of sales rescued the group, but also exposed how narrow its profit layer has become.
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