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DW Special: The Israeli Diamond Industry
Opening Windows of Opportunity despite the Crisis
By: By Rachel Lieberman, Content Manager, Israel Diamond Institute Portal
Jan 30 2009 6:25PM
Reference: 3494  


Avidar adds that he anticipates some positive developments in the industry around Easter 2009 and even more tangible growth by September 2009.

Israeli Diamond Industry leaders have taken several steps to boost the industry. Avi Paz, IDE President and President of the WFDB, along with Moti Ganz, Israel Diamond Institute Chairman and President of IDMA, appealed to Israeli banks to loosen the credit crunch. In response, the banks have reportedly agreed to preserve current credit lines and loosen the noose.

As the representative of the Israeli Diamond Industry’s leaders, Moti Ganz approached the Bank of Israel to request its intervention. Avi Paz approached the Israeli government and requested that the sector be included in a government aid package. Deputy Prime Minister and Minister of Industry Trade and Labor, Eli Yishai, pledged his support for the plan at a meeting with the industry leaders.

Other efforts to jumpstart the industry include the Israel Diamond Institute’s initiative to host buyers interested in visiting the IDE at the former’s expense. The initiative has been highly successful and buyers from all over the world have visited the Ramat Gan complex. Others have expressed an interest in the plan.

Moti Ganz recently stated that the current period presents a window of opportunity for the Israeli Diamond Industry to reinstate its status as a cutting and polishing center. Itzhak Lopatin, veteran diamantaire and chairman of the Israel Diamond Exchange’s (IDE) Control Committee, concurs and explains the reasoning behind this proposal: “Despite the current crisis, the Israeli Diamond Industry’s basic stability is greater than that of other centers due to the fact that the industry’s debt to the banking system stands at 10% of its annual volume of activity. Israel has always served as a major trading center.”

He stresses: “But Israel also has at its disposal a unique infrastructure of polishers and cutters trained to deal with all sorts of diamonds. The Israeli Diamond Industry has the capacity to set up a viable polishing and cutting center within several weeks. Added to this is the industry’s unmatched technological know-how which is also immediately available to Israeli polishing units.”

Lopatin believes that once the industry revives there will be demand for different kinds of stones, not necessarily the sizes and types which were popular before the crisis. “I believe that the demand will be for halves, three-quarters, and one-carat to two-carat stones. Rough prices will undoubtedly decline. The Israeli polishing industry is extremely flexible and knowledgeable regarding all of the diamond sizes. Labor costs will no longer represent a cardinal issue.”

Lopatin notes that the Israeli industry is free of red tape, making import and export procedures swift. He adds that there is a good chance that the Israeli government will soon approve a Free Trade Zone, which will further boost Israel’s position as a polishing center: “Israel is halfway between South Africa and India. Many companies will prefer Israel over Dubai and Belgium. It simply makes sense for Israel to become the world’s leading cutting and polishing center.”

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