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Israel Expects New GIA Lab to Boost Local Diamond Manufacturing
Sep 3, 2012 12:03 PM
By Avi Krawitz
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RAPAPORT... Representatives of the Israeli diamond trade expect the opening of the Gemological Institute of America (GIA) laboratory in Ramat Gan to help boost local cutting and polishing activity in the country. The lab was officially opened at the Israel Diamond Exchange (IDE) on Monday.
“Establishing the laboratory here will significantly cut the time it takes to finish a certified stone as well as the expense involved,” said Moti Ganz, the chairman of the Israel Diamond Institute Group of Companies (IDI). “This will especially help the small- to medium-size businesses who can’t afford to wait as they don’t have the capital or capacity to maintain turnover elsewhere.”
Ganz estimated that the new lab will save the industry between $30 million and $50 million a year as diamantaires will be able to save on shipment and related insurance costs, among other benefits. He added that while it could take up to six weeks to receive a stone back, having a local lab now will ensure a turnaround time of less than one week.
Previously, Israeli diamantaires sent polished diamonds to the U.S. for grading via service providers, including Rapaport Group and GemLab. Donna Baker, GIA's president, stressed that those groups will continue to work with the lab to ensure that the Israeli industry operates in an efficient manner. While other labs already operate in Israel, Baker said she expects there is sufficient demand for GIA certificates to enable GIA to grow its capacity.
The lab will handle stones of less than 2.99 carats and will start with a small capacity, which will increase as demand warrants, Baker explained. The company has hired 15 Israelis and 14 expatriates from the U.S. to work in the lab, and it intends to employ more locals to operate the lab as their expertise develops.
“We look forward to supporting the Israeli industry and developing a long-term relationship that grows with time,” Baker said.
Avraham (Bumi) Traub, the president of the Israel Diamond Manufacturers Association (IsDMA) expects the lab will grow into one of the GIA’s largest grading centers as the trade aims to restore Israel’s once large manufacturing industry.
While Israeli diamond manufacturers employ an estimated 30,000 people across the globe, only approximately 2,000 of those are based in Israel. At its peak in the 1980s, about 20,000 people were employed in Israel when local manufacturers were still focused on small, mass-produced melee goods. The decline came as the trade was unable to compete with the cheaper labor markets of India and China, and as beneficiation took shape in southern Africa.
“Manufacturing is coming back to Israel,” Traub said. “The cost of polishing today is so high that the labor cost has become a small percentage.”
Ganz added that Israel will continue to focus on developing its niche of manufacturing large diamonds. He noted that the government has offered its support to making Israel a learning center for large diamond cutting and polishing.
In addition, representatives from the industry and GIA met with Tel Aviv University on Monday to explore the possibility of offering GIA courses at the university and forging partnerships to conduct scientific research in the field.
Speaking at the opening, Lev Leviev, the chairman of Lev Leviev Diamonds, noted that the Israeli industry has lost market share but remains among the most active dealers in the market. Interjecting some humor, Leviev said, “We can thank the rough producers for that, as they have made it so difficult to profit that Israelis are looking for opportunities all around the world to make the smallest profit.” Leviev welcomed recent rough price declines which, he added, were the result of manufacturers finally learning to say no to expensive rough.
Most speakers acknowledged that the current diamond market conditions are tough but expressed confidence that the new lab will help boost the local industry.
“We are working through challenging times, but I believe opening a GIA lab will prove a historic decision for the industry,” Traub said. “Israeli diamantaires will stop being beggars as they can now increase their turnover. We believe that the diamond business in Israel will now grow.”
* Picture courtesy of GIA. From left: Lev Leviev, Moti Ganz, Avraham Traub, Donna Baker, Avigdor Liberman - Israel's Minister of Foreign Affairs, Elliot Tannenbaum - of the Leo Schachter Diamond Group.
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Tags:
Avi Krawitz, diamonds, Gemological Institute of America, GIA, IDI, IsDMA, Israel Diamond Institute, Israel Diamond Manufacturers Association, Rapaport
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