When it comes to the issue of securing rough diamonds, Israel does not have many advantages in being able to bring in the large quantities of goods it needs. Obviously, it does not have any mines. Neither does it have the benefit of being a diamond center with centuries of history as is the case with Antwerp.
It is not a huge manufacturing center employing a million workers or more, like India, so it has very little clout with the national government and banking sector in providing financing assistance. And it cannot compete with new trading centers such as Dubai which can provide enormous financial incentives and is also ideally placed between the African producers and the manufacturing and sales centers of Asia.
But as its diamond sector leadership stresses repeatedly, it does have a huge entrepreneurial spirit, recognizes new trends early on and has a great deal of nerve. And that has enabled it become a center that imports $5 billion of goods annually. In financial terms, it is as if the country were buying almost all of De Beers' annual production.
As a former industry leader explained: "Both on an individual level and on the level of the national diamond sector, Israelis are not afraid to take chances. Not only is there not a diamond center anywhere in the world where you won't find Israelis operating. Go to diamond mines, even the most remote, throughout Africa, and there is a good chance that you will find Israeli diamantaires. We have always 'punched above our weight' and that is what has enabled us to create such an important sector on a global level.
"These annual rough week events provide all the usual advantages, such as networking and enabling the producers to understand better what kind of goods the local market wants and needs. More than that, however, at a time of change when De Beers has long lost its huge power and a cluster of medium-size and smaller miners are becoming increasingly prominent, the local industry wants to create connections with them. In the old days, you were either a De Beers Sightholder – and there were many of them 20 years or more ago – or you bought the goods they did not want to deal with. In that sense, it was a relatively straightforward business. Now, however, there are dozens of miners and producers. It has become far more complicated and you need to be in continuous contact with many potential suppliers if you want to receive supplies.
It is, perhaps, against that background that the Israel Diamond Exchange, for the second year running, will be holding a Rough Diamond Week from April 12 to 16. The inaugural event in March 2014 featured a number of tenders for rough goods by some of the biggest names internationally and nationally within Israel. The companies, which will be tendering goods in April, include two of the giants of global production - De Beers Auction Sales and Rio Tinto Diamonds – along with sales staged by Fusion Alternatives/I Hennig, and Tzoffey's 1818.
Although there are smiles and pleasantries all around, the leaders of the IDE are quite clear-headed and absolutely determined in their aims. Vice President Arnon Juwal, who heads the International Rough Diamond Week organizing committee, says quite simply that more rough diamond trading and sourcing is needed in order for the Israeli diamond center to go forward.
"If we are to boost the manufacturing of polished goods in Israel, we need to increase the flow of rough to our industry. By creating an annual event for rough diamond tenders, as well as auctions, we are placing these efforts high and visibly on our industry's agenda."
With around two weeks to go before the event, Juwal said there had been an encouraging response from rough diamond producers, traders and diamond manufacturers with regard to taking part in the event. "The rough diamond supply channels are going through significant changes, with rough being produced and traded by a significantly larger number of players than ever before. Spearheaded by the IDE's efforts, Israel's diamond industry strategy is to build long-term, value adding alliances with these players."
For IDE President, Shmuel Schnitzer, the idea is not simply to hold an International Rough Diamond Week annually, but rather several times a year. "This is a long-term initiative that will strengthen and boost Israel's position as the world's most versatile and dynamic diamond trading hub. Rough diamond trading is an essential component of our industry's vitality."
Juwal notes that last year Israel's rough diamond trade passed the $5 billion mark, but that the local industry could easily absorb more goods – particularly in larger sizes. "Our goal for the Israeli diamond industry is to increase significantly rough diamond supplies to our manufacturers. Israel is a leader in the cutting and polishing of fancy shapes, in all sizes and qualities, as well as of natural fancy color diamonds in larger sizes. Our expertise, technological prowess and skills in these product categories are unmatched. We need more rough and the appropriate rough to enable significant growth in these, as well as other categories.
"We are an industry with a global presence that serves a global market. To grow, we need to secure more rough and the International Rough Diamond Week will hopefully offer options for our members to increase their rough purchases," Juwal said.
Meanwhile, Yoram Dvash, Chairman of the IDE's Industry Committee and one of the driving forces behind the establishment of the Modern Manufacturing Center in Ramat Gan, said the new facility would mean that Israeli manufacturers would be able to use more rough goods.
"The setting up of the new center means that diamonds can be polished here in Israel and that will save time for our diamantaires. Instead of sending them abroad to India and elsewhere in Asia for polishing, they will receive the polished goods much more quickly. That, in turn, means that they will be able to produce a larger quantity of polished goods if needed."
Schnitzer points out that the IDE is continuously aiming to bring more rough supplies to Israel. "The International Rough Diamond Week is one of the tools we are using to attract rough diamond producers and suppliers to the country," he says.
However, he points out that the IDE is not seeking to out-do other larger centers by bringing more to Israel. "We have our advantages and in the same way the others have theirs. Our aim is to simply create a situation where the widest possible range of producers and suppliers will see Israel as a vital market for the sale of their rough to our diamond people.
"We believe that the Memorandum of Understanding that we signed with Alrosa at the International Diamond Week in February, together with De Beers and Rio Tinto selling goods at the Rough Diamond Week sends a very powerful message to producers everywhere that Israel is a critical market and can absorb many more rough diamonds than we are currently bringing in."
By our Israel correspondent Abraham Dayan
