Leaders of the Israel Diamond Exchange (IDE) have presented the initial plans for the establishment of a new diamond factory for the cutting and polishing of large diamonds – from 10 carats and bigger – in the heart of the IDE complex in Ramat Gan. Management and members took part in a meeting in early September to provide information about the factory, which will be the next step in the IDE's stated aim of bringing manufacturing back to Israel.
Over the past 20 years or so, there has been a continuous shift in the production of polished diamonds to low-cost centers such as India, China, Vietnam, Russia, Armenia and Thailand.
Earlier this year, the Israeli diamond sector – including the Israel Diamond Institute and the Israel Diamond Manufacturers Association as well as the IDE – opened a manufacturing plant close to the exchange for the cutting and polishing of smaller diamonds. The center also holds polishing courses and several courses have already been held with graduates now working in the profession.
The diamond sector believes that not only is it important to return some of the manufacturing work back to Israel, but also to train young polishers since the average age of polishing workers is above 55.
"We are putting the emphasis on manufacturing and showing that we want to advance," IDE President Shmuel Schnitzer told the meeting which was attended by score of IDE members. "Without manufacturing, there cannot be a trading center. Nobody thinks otherwise. They go together," he said.
Schnitzer said the factory will be located right in the Maccabi building – one of the four inter-connected buildings of the IDE. There will be a passageway from the Maccabi building to the new factory, which is being built, adjacent to the Harry Oppenheimer Diamond Museum.
"We believe this will be a very real asset for Israeli diamantaires due to its location which will allow diamantaires to very easily and conveniently go and consult and check on the polishing work on their stones. This is an important day for us following the opening of the small diamond factory, which cuts and polishes stones of up to three carats. We see the picture as now being completed with the opening of a plant for larger stones."
Israel Diamond Manufacturers Association President Kobi Korn said: "Every now and again over the years the idea has arisen for the establishment of such a factory. The idea of a cutting and polishing plant here started several years ago. Large diamonds worth hundreds of thousands of dollars that are polished abroad need a high level of supervision and security. Although the factory won't be in the sealed IDE complex, there will be a hermetic passageway to it from the IDE.
"This will allow us to see the stones during production and save costs and create an infrastructure here in Israel for polishing. It's no secret that the situation in the diamond industry today is not good, but I say that even during such times, there are opportunities and after all the changes that are taking place there will be room to build this factory. As with the first plant, we will run a pilot scheme first. I very much hope this will succeed and create a basis for further development."
Meanwhile, the Ministry of Economy's Diamond Controller, Shmuel Mordechai, said: "I believe this factory will be a blessing for the domestic diamond sector and for all those who use the new plant's facilities. I am sure that we are heading for a new period in our history which will lead to the return of a significant part of our manufacturing here."
IDE Industry Committee Chairman Yoram Dvash, who has been among the leading forces in pushing through both the plant for smaller diamonds and the current plans for a factory for the polishing of larger diamonds, gave a detailed briefing on the factory and the conditions that diamantaires need to meet to be accepted.
"I am very happy to be a member of the management that is working on two planes simultaneously," he said. "We are trying to deal with the ongoing problems while also sowing the seeds of future success. Our job is to create a better environment and the conditions for people to flourish. This factory came about because of necessity after people turned to Shmuel, and then to me.
"There are many Israeli firms which manufacture large goods. When we checked it out more deeply we found that there are several issues with the insurance companies. Large diamonds need two security people to accompany them because they are so expensive. I was also told by manufacturers that large diamonds are sent to Belgium and New York for manufacturing because the conditions in Israel are not there for the cutting and polishing of such diamonds.
"But this factory gives a range of solutions. Regarding the insurance companies, we sat with just about all of them to discuss it. We are going to create the plant with a passageway from the bourse to ensure security is tight. As long as the person does not step out of the bourse complex, and this is what I was promised, as long as he does not go out, as far as the insurance firms are concerned he is considered as still being within the exchange, the insurers said."
Dvash said that the IDE's aim was to continue to advance the plans and building of the new plant. He showed the building plans for the factory, which will take up 400 to 450 square meters of space and said that IDE members were welcome to propose suggestions and modifications.
Not so long ago, few members of the IDE would have thought it possible to return a meaningful level of manufacturing to Israel. But as labor and other expenses in the Chinese, Indian and other lower-cost labor centers have risen, the gap between their overall costs and those in Israel has narrowed. And the result? The possibility of polishing a wide range of diamonds at home with all the advantages that provides.
What percentage of diamonds are being polished in Israel now? That is difficult to say, and likely to be a relatively small amount. However, now that facilities exist for polishing, courses in cutting and polishing are being run with young polishers being trained and a new plant is already being considered, one can cautiously say that the future of diamond manufacturing looks promising.
By our Israel correspondent Abraham Dayan
