Although organizers of the Israel Diamond Exchange's (IDE) February 8-12 International Diamond Week praised the success of the latest edition of the show, it was less clear if the event created business or just a lot of meetings and networking. The diamond week, as with previous editions of the show, featured a large delegation from the Diamond Dealers Club (DDC) of New York, with more than 100 members making the trip to the Ramat Gan exchange.
And the February show was also the first edition to feature a delegation of diamantaires from the Antwerp Diamond Bourse (Beurs voor Diamanthandel). The show, which aimed to raise the mood at the bourse by bringing together sellers and buyers from across the globe, also featured a delegation of around 40 jewelry firms from Turkey who came to view the approximately $2 billion of goods being offered by more than 300 Israeli diamond companies. In addition, there were hundreds of visitors from the India, Russia, China, and many European countries.
The event also featured a high-level signing ceremony of a Memorandum of Understanding (MoU) between the IDE and Russian diamond mining giant Alrosa. The importance of the event to the Israeli diamond sector was clearly indicated due to the signing ceremony at the Israeli bourse and afterwards at the official residence of Israel's President Reuven Rivlin in which leading global and Israeli diamond industry officials took part.
Shmuel Schnitzer, President of Israel Diamond Exchange, explained the importance of the signing at the President’s residence. “The signing event with President Rivlin is a symbol of the understanding's importance to the Israeli economy and to the State of Israel as a whole. It will strengthen the relationship between Alrosa and the Israeli diamond industry.”
The MoU aims to strengthen the cooperation between Alrosa and the Israeli diamond sector, to develop the diamond industries in Israel and Russia, and to promote the diamond business in international markets. IDE President Shmuel Schnitzer signed on behalf of the Israel Diamond Exchange and Alrosa Vice President Andrey Polyakov for the firm.
Both Schnitzer and Polyakov emphasized the over-arching nature of the agreement. "It also relates to a rise in rough supplied to Israel by Alrosa and this will reach $550 million annually," said Schnitzer. "But the agreement also relates to other very important factors, such as exchanging market intelligence and cooperating in a large number of areas."
Meanwhile, Polyakov stressed the technological work and achievements at the heart of Israeli diamond industry. "We are sure that we'll be able to identify the many interests and synergies we share and cooperate successfully,” he commented.
Talking about the Diamond Week specifically, towards the end of the event, Schnitzer said the semi-annual event was part of a wider trend in the global diamond industry to bring diamond and jewelry firms together in order to raise trade. He said the IDE was planning a similar event with the Bharat Diamond Bourse.
"It is really critical to bring activity to the trading floors of world's major diamond bourses. We have, to a large extent forgotten that it is crucial that we meet face-to-face to do business. Increasingly, we are working from our offices rather than going out and meeting people.
"I lost count of the number of exhibitors and of buyers from the IDE who came up to me and told me how they had met people who they see on the same corridor as them and in the elevator every day with whom they had never spoken until this week. To their surprise, they found that those people were in a position to either supply or buy from them exactly the items they need. I see this as being part of the beauty of events such as this.
"Participation does not cost a single cent. That is important because small and medium-size firms cannot afford to go to the big shows across the world in Hong Kong and Las Vegas and others. This gives them the opportunity to compete. We have a draw and people are allocated a place for their table completely at random. With this show, there is a completely level playing field. Big companies and small all receive exactly the same size table and space," he added.
Speakers at the opening day ceremony of the event emphasized the need to bring back profitability to the operations of the many businesses in the midstream part of the diamond industry. That is all the more the case due to a soft market globally for polished diamonds, tight liquidity and super-thin profit margins for manufacturers.
Dan Shapiro, the U.S. ambassador to Israel, was one of two guests of honor – along with World Federation of Diamond Bourses (WFDB) President Ernie Blom. Shapiro praised the participation of 100 American diamond dealers from the Diamond Dealers Club (DDC) of New York. Meanwhile, Belgium’s Ambassador to Israel took the opportunity to thanks members of the Antwerp Diamond Bourse who took part. In addition, there was a delegation of more than 30 members of Turkey's national jewelry association.
"The global economic crisis has affected all industries and most countries around the world, but we are pulling through," said Shapiro. "An economic recovery is now underway in the U.S., which will hopefully lead the way to a global economic recovery. This year should be a comeback year for the global economy, and for the diamond industry."
Ambassador Shapiro added that diamonds are the leading U.S. export to and import from Israel and have helped create stronger US-Israel business ties.
The International Diamond Week was organized by the IDE in close cooperation with the DDC and its President Reuven Kaufman and the Antwerp Diamond Bourse and its President Marcel Pruwer.
Pruwer said his members had reported good results from the show and were more than satisfied with the visit. Belgium could increase the number of members taking part in the Summer edition of the event in August, Pruwer added.
In excess of 300 Israeli diamond companies took part in the International Diamond Week.
As for levels of business, many exhibitors noted that although there were more visitors than at previous editions of the event, this had not necessarily translated into more business. "The show reflected the state of the market," said one Israeli diamantaire who declined to be named. "The situation is difficult everywhere, in all the markets. It is great to meet people, to make possible new clients and to network, but buyers were aggressively seeking price reductions and that did not help to create many selling opportunities."
Meanwhile, a member of the delegation from the DDC in New York said: "There is a great deal of optimism and goodwill. This is a great event for making contacts and meeting people eye-to-eye. You should not regard the fact that for the most part the event was really about the establishment of trading relationships. They are important and you can never know when they might lead to business at a future date, whether directly or indirectly. But with all the will in the world, I could not really say that a lot of business was done. Many of my colleagues said likewise."
Overall, it appeared that less business was conducted than at the parallel event last year – again reflecting conditions in the market overall. Price resistance was clear, with many buyers trying to bring down asking prices' "This is natural, of course," said an Israeli exhibitor. "Everyone tries to bring prices of purchases down. But at this difficult time when rough is being bought at a high price and then all the costs of polishing and transportation and insurance are added on, we are caught between wanting to sell and having to sell at a loss. Some sellers did that because they need to raise money to cover costs and finance other purchases, but it is not a way to run a business."
Meanwhile, Kaufman paid praise to IDE President Schnitzer for his part in developing the fair. "I always say I am coming home when I come to Israel because I have come here so many times. It is unbelievable how much business is done between Israel and the United States and how many strong connections there are between the two centers."
He said there was exceptional synergy due to the myriad business and family connections between Americans and Israelis. "Our way of doing business is similar. The idea of having three bourses coming together makes a lot of business sense.
"Unfortunately, these days, much business is done behind closed doors, but people are discovering with these shows that it's important to sit across from someone and do business face-to-face. You get a feeling for the person and for his goods. Many DDC members have a tremendous range of goods. The shows brings tremendous value.
"There is a question of cooperation versus competition: we thought maybe DDC members would not like Israeli firms coming to their turf when we held the Israel Diamond Week at the DDC last year and in 2013 and vice versa. But there are so many goods in the world that there is enough for everyone to do business. This is a tremendous idea that works well. The networking is a wonderful idea. We learn what kinds of goods other diamond people have. We need to see the person behind the stones rather than simply looking online on one of the trading platforms. There is always a wariness when dealing with someone you have never met, but when you sit opposite him you develop a relationship, one that often lasts for decades."
By our Israel correspondent Abraham Dayan
