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Israel
By Sarah Manning
Israel’s new state-of-the-art Modern Diamond Manufacturing Center officially opened in November near the Israel Diamond Bourse (IDB) in Ramat Gan. The 4,300-square-foot facility, which is open to all bourse members who have stones to cut, will also house training courses in diamond polishing, with the first students already attending. Widely applauded as representing a return of diamond manufacturing to Israel, the center includes lecture halls, events space and classrooms, as well as rooms equipped with the latest laser-cutting and automatic polishing machines. “This is a joint project between the Israel Diamond Exchange (IDE), the Israel Diamond Institute (IDI) and the Israel Diamond Manufacturers Association (IsDMA),” explained Jacob “Kobi” Korn, president of IsDMA. “Our goal is to pass on to the next generation the expertise of Israel’s diamond cutters, most of whom are approaching retirement age, and to double the number of skilled cutters. It is important for Israel to reestablish its prominence as a diamond cutting center, which has declined over the past 30 years, to complement our standing as a strong business center.”
This view is shared by Andre Messika, founder and president of his self-named manufacturing company that employs 120 people worldwide. Messika already has eight polishers working in the new facility. “I believe that it is crucial to increase local production and I hope that other Israeli companies will follow suit,” he said. “As manufacturers, we are being squeezed on all sides, with downward pressure on polished prices and the lack of bank credit making life difficult for us. Rough prices are high, but we will have to buy stones in order to keep the wheels turning, even if our share of the sale price is being cut.” Korn, who in addition to his IsDMA post is also deputy president of the IDE, is owner and managing director of Korn Diamonds. He emphasized the need for “all the industry organizations to work closely together to strengthen manufacturing in Israel, improve transparency in tax reporting and increase lines of credit for the Israeli diamond industry.”
With the pace picking up in the countdown to the year-end holiday season, retailers in North America reportedly are buying more Israeli diamonds than in previous years. Demand from the Far East and European markets is weaker but stable. In light of the stronger American economy, retailers report seeing something of an increase in consumer confidence, and Israeli suppliers are hoping that the final quarter of 2014 will be good for diamond sales in the United States. “The American market is clearly stronger than in the past two winter seasons while Europe, traditionally our main market, is experiencing a slightly weaker holiday season this year,” said Messika. Messika, who was Israel’s top exporter in 2012, the most recently reported year, said that while 2014 has been a good year for turnover, margins are tight. “Retailers worldwide are mostly buying to replace the goods that they sell,” he explained. “They are not buying to build inventory because their other costs are so high. Generally, our customers are buying a higher proportion of lower-quality goods than in the past because their clients are spending less.” Eli Sadeh of Eli Sadeh Diamonds said that while retailers are mostly buying smaller stones, they still want good colors — D to J — and fancy cuts for their discerning customers, and they are willing to pay for them. “Demand has also increased for round and fancy cuts graded SI1 to SI3. We are being asked to supply the same stones by retailers all over the world, and they are even paying above list prices to get the goods they want.”
IDE has signed a unique cooperation agreement with eBay to expand the sale of Israeli polished white diamonds on the internet. Accredited members of the exchange will receive training from eBay’s Israeli-based sales staff on running diamond stores on eBay’s sales platform. They will have to meet tough requirements for the goods they offer and the service they provide in return for eBay’s protection systems. Data from eBay shows that wedding proposals with a diamond ring are on the rise and that tens of thousands of couples around the world are buying engagement rings set with Israeli diamonds. At the announcement of the agreement, Elad Goldberg, the manager of eBay’s business development department in Israel, said: “Israeli sellers are regarded as the best and most loyal on eBay globally. They manage wonderful online stores and lead the sales charts. Since 2013, the number of Israeli sellers on the site has surged by 43 percent, and we are certain that this new cooperation deal with the IDE will open up more opportunities for additional markets.”Article from the Rapaport Magazine - December 2014. To subscribe click here.
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