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Competitive Diamond Hubs


Mar 22, 2013 6:00 AM   By Avi Krawitz
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RAPAPORT... In many respects, the contrast could not have been starker. Two vastly different diamond ‎industry events took place this week, one in Dubai and the other in Ramat Gan, ‎seemingly with different agendas and each reflecting different aspects of the trade. The ‎similarities were equally enticing; both drawing strong crowds and signaling a more ‎upbeat industry than a year ago. ‎

In Ramat Gan, dealers, fresh off the Hong Kong show, bartered their goods at the ‎U.S./International Diamond Week while the local leadership reveled in their re-found ‎relevance in the diamond trade. Like similar events in New York and Antwerp earlier this ‎year, Israel’s “festival of diamonds” revealed a need for the traditional diamond trading ‎centers to innovate and aggressively market themselves to maintain market share.‎

By all accounts, the Israel Diamond Exchange (IDE) achieved its goal for the week ‎attracting around 200 buyers from 15 countries to the event, despite mixed reviews about ‎actual trading that took place. With a reported excess of $1 billion worth of polished ‎diamonds on offer, the event also gave Israeli buyers located in the bourse an opportunity ‎to look for goods that would otherwise not be in the country before next week’s Passover ‎break. It also hosted rough and polished tenders during the week. ‎

IDE president Yair Sahar was surely thinking of Israel’s long-term strategy when he said ‎he expects to host such events every year in Israel and New York, and possibly in other ‎countries as well. Israel has been successful in penetrating the Far East market but ‎strategically recognizes the need to diversify further, or at least strengthen its existing ‎partnerships. Having lost its manufacturing mojo to India, Israel is operating in a changing ‎and extremely competitive global trading environment.‎

The Dubai Diamond Conference this week illustrated that change. In short, with more ‎rough being distributed from southern Africa, mainly from Botswana and Zimbabwe, ‎Dubai is positioning itself as the “new silk route” for diamonds on their way to India and ‎China. ‎

‎2013 may prove to be a landmark year in that development. De Beers is on track to ‎relocate its London sights to Gaborone by the fourth quarter and Onkokame Kitso ‎Mokaila, Botswana’s minister of minerals, energy and water resources, reported that the ‎state-owned Okavango Diamond Company is expecting to launch its independent rough ‎sales by the end of June. He added that the value of goods polished in Botswana has ‎grown from $28 million in 2005 to more than $600 million in 2011. The volume of goods ‎traded, manufactured, and exported from Gaborone is set to grow further.‎

Dubai’s growth has been equally impressive. Rough imports doubled from 2009 to $3.75 ‎billion in 2011, according to the most recent available data, while rough exports grew 179 ‎percent through the same period to $5.91 billion. It boasted $14.9 billion in polished ‎imports and $14.7 billion in polished exports during the same year. Peter Meeus, ‎chairman of the Dubai Diamond Exchange (DDE), emphasized Dubai’s growth in doing ‎business with Africa. Among these, he disclosed that imports from Zimbabwe grew from ‎‎$1.7 million in 2008 to $408 million in 2011. ‎

Dubai has emerged as the natural destination for Zimbabwe goods that remain ‎sanctioned in the U.S. and the European Union. It can be argued that Zimbabwe was a ‎catalyst for Dubai’s growth in the past few years as Indian cutters sought to procure ‎rough from the new, albeit controversial, Marange mines.‎

Either way, the result is that almost 600 diamond and jewelry companies and 400 ‎additional gold-related firms are located in Almas Tower, home of the DDE and the Dubai ‎Multi Commodities Centre (DMCC), according to Meeus. He added that DMCC has on ‎average five to six new companies licensed every day. Dubai has also raised its profile ‎on the international stage by hosting the World Federation of Diamond Bourses (WFDB) ‎meeting in 2011, this week’s conference, and recently too by nominating Meeus to be ‎president of the World Diamond Council (WDC), which represents industry at the ‎Kimberley Process, when the job becomes vacant in June.‎

Dubai markets itself with a solid infrastructure, zero taxes, minimal bureaucracy and ‎strong regulation that few of the established diamond centers can match. Its location as a ‎gateway between west and east, or rather between south and north, is a marketable ‎advantage, not to mention its own emerging consumer economy. ‎

The rough trading centers of Antwerp, and to a lesser extent Israel, should take note. ‎While they are correct in being proactive to raise the level of activity with their trading ‎partners, they need to work to become more investor – or diamond trader – friendly. By ‎making it easier to do business in Antwerp and Israel through simplified bureaucracy and ‎more liberal tax codes, they will come a long way to compete, prevent local companies ‎from leaving, and maintain their respective shares of the market.‎

Then again, Antwerp and Israel have aspects working to their advantage too. Certainly as ‎polished suppliers, they have historic access and relationships with the consumer ‎markets of the U.S., as this week’s Ramat Gan event illustrated, as well as in Hong Kong ‎and the Far East. And more importantly, their respective dealers have an unparalleled ‎knowledge about diamonds that keep them highly relevant.‎

But the landscape is changing. The various trading centers find themselves jostling for ‎position as the global trade diversifies between geographies. If anything, this week’s two ‎diamond industry events showed two vastly different centers united by a common ‎ambition: to be a leading diamond trading hub. With others in the game too, it will take ‎some aggressive marketing and strategic thinking to ensure their growth in a relatively ‎small market. Hopefully, there’s space for everyone. ‎

The writer can be contacted at

Follow Avi on Twitter: @AviKrawitz

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Tags: Avi Krawitz, De Beers, diamonds, DMCC, Dubai Diamond Exchange, Okavango, Rapaport
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