|
|
Israel
By Avi Krawitz
There was a buzz in the Israel Diamond Exchange (IDE) in the second half of August as the market prepared for the U.S. and International Diamond Week that took place in the final week of the month. Approximately 500 international buyers from 22 countries participated in the event, with 360 Israeli firms and 28 U.S. companies exhibiting on the trading floor. Yair Sahar, IDE president, stressed that the objective in organizing the event was to bring polished buyers and more rough supply to Israel. “We have succeeded in doing that,” Sahar told Rapaport Magazine. “We want to show that Israel is a great place to do business.” In addition to the larger-than-expected number of buyers, Sahar pointed to the busy schedule of rough auctions that took place during the week, hosted by ALROSA, Rio Tinto, De Beers and I. Hennig/Fusion Alternatives, with polished auctions by Rapaport Group and Tzoffey’s 1818 Auction House. IDE also announced that it is in negotiations with Dominion Diamond Corporation, owner of the Ekati mine and a partner with Rio Tinto in the Diavik mine, to conduct future sales in Israel. The diamond week is the second such event hosted in the exchange this year following the success of the inaugural one in March. IDE timed the event to take place just before the Jewish holidays, when many dealers from the U.S. and Belgium come to Israel anyway, and prior to the September Hong Kong show and the fourth-quarter retail season. The exchange has also scheduled an Israel Diamond Week in New York in November, in partnership with the Diamond Dealers Club of New York.
As the originator of the diamond week idea, Sahar is hoping the event will boost his chances of being reelected IDE president when the election takes place on October 2. He is being challenged by Shmuel Schnitzer, who served in the position from 1998 to 2004. Schnitzer outlined five points that he will be pushing in his campaign agenda. These include increasing manufacturing in Israel, lobbying for greater bank financing, adding more women to the IDE board of directors, expanding the diamond week concept and working more efficiently to reach an agreement with the Tax Authority. The crackdown by the Tax Authority on diamond businesses skirting their reporting and tax payments has been the main source of discontent among bourse members during the past year. While the overall investigation was suspended in 2012, there have been sporadic raids on individual companies in the bourse in 2013, which has increased tensions. Sahar contends that the industry leadership has hired the strongest possible team of professionals to negotiate on behalf of the industry to reach an agreement with the authority. IDE stated that negotiations to reach a final agreement with the Tax Authority are ongoing and will hopefully reach a conclusion in the coming months. “Our objective is to return business to the industry and negotiate to create a win-win situation for both the state of Israel and the bourse,” Sahar said. “But these things take time.”
Most dealers are focused on the market and will be eyeing rough prices especially in the coming weeks, while planning their sales strategy for the end-of-year season. Dotan Siman-Tov, managing director of Lili Diamonds, a manufacturer of patented special cut diamonds and jewelry, noted that it’s very difficult to profit in the current market. He stressed that strong branding helps manufacturers improve their margins. “Branding and patenting your product costs money but it gives you an advantage,” Siman-Tov said. “People look for special things today and shops want to provide that to their customers, so you have to show your added value as a supplier.”
Approximately 120 Israeli companies are registered to exhibit at the Hong Kong show, 90 of which will be in the Israel Diamond Pavilion. As part of its services at the show, the Israel Diamond Institute Group of Companies (IDI) has introduced a computerized database of all the Israeli goods in the pavilion, sorted by exhibitor. The service will enable visitors to specify the goods they want and point them to the right suppliers among the Israeli exhibitors in the pavilion and elsewhere in the show, IDI explained. Hong Kong is Israel’s second-largest market after the U.S. and Moti Ganz, chairman of IDI, stressed that there remains tremendous potential for Israel’s expansion in Asian markets. “We see Asia, with Hong Kong as its gateway, as a vast and largely untapped market for diamonds,” Ganz said. “Although there is currently a certain slowdown in Asian markets, we are convinced they will bounce back and continue to expand. We have only begun to scratch the surface.” Article from the Rapaport Magazine - September 2013. To subscribe click here.
|
|
|
|