Israel Diamonds Exports Grow By 6%

By Israel News Agency Staff

Ramat Gan ----July 5..... Israel net polished diamonds export industry rose 6% from January to June 2005, according to statistics reported by the Israel Ministry of Industry, Trade and Labor's Diamond Controller, Shmuel Mordechai.

Net Israel polished diamond exports reached $3.479 billion in the first six months of the year, compared to $3.287 billion for the same period in Israel for 2004. Israel's net polished diamond exports declined 17% in June 2005, reaching $400 million, as compared to $482 million in June 2004.

Net imports to Israel of rough diamonds increased by 28% in June 2005 to reach $534 million, as compared to $417 million for the same period in 2004. From January to June 2005 rough diamond imports increased by 9%, reaching $2.663 billion, as compared to $2.443 billion in 2004.

Rough diamond exports from Israel continued to rise, increasing 29% in June 2005 to reach $ 368 million, compared to $285 million in the same period last year. In the first half of the year they rose 24% to total $1.900 billion, as compared to $1.531 billion for the same period in 2004. Israel's imports of polished diamonds increased 16% in June to $341 million, as compared to $294 million in the same month last year.

From January to June net imports of polished diamonds rose 17% to $1.861 billion, up from $1.588 billion in the same period in 2004. Polished exports to the U.S. rose 13%, to Hong Kong 31%, to Belgium 28%, to Switzerland 61% and to Japan 4%.

The major export markets for Israel's polished diamonds in March were the United States with 60%, Hong Kong 20%, Belgium 8%, Switzerland 4% and Japan 3%.

Israel Diamond Controller Shmuel Mordechai said that the decline in June's polished exports could be attributed to returns of inventory from two international trade shows in Hong Kong and the United States. Mordechai also said that the 6% rise in polished exports to the US, Europe and Asia since the beginning of the year points to a continuation of the positive growth trend in the Israel industry, which is expected to continue until the end of 2005.

The diamond industry in Israel is one of the leading world diamond trading centers for polished and rough diamonds. Approximately half of the world's gem quality diamonds come out of Israel and can be found on a substantial portion of the most beautiful diamond jewelry sold worldwide.

Israel diamonds polishing factories, considered the most advanced in the world, are equipped with sophisticated polishing and processing technologies, most of which were developed in Israel. A highly qualified workforce, employing advanced technologies, places the Israeli industry in a leading global position.

With a high profile presence in the world marketing and sales centers, as well as at international exhibitions held around the world - the Israel diamond industry continues to adapt to changes in the diamond world. An example for the industry’s flexibility is the trend of cooperative endeavors and joint ventures between Israel and foreign companies in manufacturing, production and marketing.

Capitalizing on state of the art technology, a highly trained workforce and the integration of second and third generations into the business - Israel's diamond industry maintains its leading status in the world arena.

Why Buy Diamonds from Israel?

Israel is one of the world’s leading diamond manufacturing and trading centers, selling to numerous markets over the world. Israel sold over $6.3 billion worth of polished diamonds in 2004 for the following main reasons: half of all gem quality diamonds sold around the world is coming from Israel.

Israel is the largest consumer of rough diamonds in the world. Israel produces high quality diamonds, based on expert craftsmanship combined with innovative technology. From lasers to robotics, Israel is at the forefront of technological advances in diamond manufacture.

The Israel Diamond Exchange is the largest in the world, offering the greatest selection of diamonds under one roof. Buying in Israel is safe and convenient – the Diamond Exchange complex is a virtual citadel, where diamonds are traded in complete security. Israeli diamantaires are reliable, flexible and gear themselves to clients’ needs. Israel leads the world diamond industry in innovating new cuts.

Owning diamonds from Israel has always meant possessing something of great beauty and lasting value. Israel Diamonds are certainly the most precious of all nature's creations. Their fiery brilliance captures our hearts as the eternal symbol of love. But if you're like most people, you probably know very little about diamonds.

Diamond is the name given to the crystalized form of the element Carbon. Diamonds were formed under extreme heat and pressure at our Earth's core. They traveled to the surface through volcanic pipelines known as kimberlite during the Earth's formation. Due to their unique physical properties diamonds have been sought after by Kings and nobles throughout eons of time. The value of a diamond is determined by its exact quality as defined by the 4C's: Cut, Color, Clarity and Carat-Weight.

Israel Diamonds in the News:

Israel’s Ministry of Industry, Trade and Labor has declared China to be a preferred export target and will set up two permanent trade centers in two of China’s provinces, the ministry said in a press release on July 11.

A special committee from Israel will choose the locations, thus ensuring Israel’s permanent commercial trade presence in China. India, Mexico, and Brazil are already considered preferred export targets by Israel. Under the new plan, two companies in China will be awarded tenders by the end of 2005 and will receive a low flat fee covering overhead costs according to Globes on July 12.

The estimated boost to Israel’s export potential to China is about several hundred million dollars. Managing Director of Israel Diamond Institute Ephraim Raviv told Rapaport he welcomed the move saying “throughout the world the offices of the ministry provide services to the diamond industry. We are very grateful. This will be a positive step for us. We are in the process of opening an office in New York and are seriously considering opening another office in Hong Kong, both dedicated to the diamond industry.” China was Israel’s ninth largest export destination for polished diamonds in 2004 with exports reaching $98.1 million.

In 2004, Israel’s total exports to China rose 30 percent to $765 million as compared to $591 million in 2003. Diamond exports to China rose by 16 percent. The increase in Israel’s diamond exports to China is largely attributed to the easing of import taxes on diamonds to China. Diamond exports make up 13 percent of Israel’s total exports to China. Many Israeli owned diamond manufacturing firms have established plants in China over the last couple of years and are listed on the Shanghai Diamond Exchange.

The Israel Diamonds industry continues to shine. For many years, Israel has been one of the world’s leading centers for both the manufacture and trade of polished diamonds. Processing about one-half of the world’s gem-quality rough in dollar terms, Israel diamond companies today provide the stones that garnish a vast amount of the diamond jewelry sold worldwide.

As it looks to the future, this wholly export-based industry seeks to expand into new markets, to broaden its ties with rough diamond suppliers, and to continue its technological development in order to streamline the diamond manufacturing process in Israel. Leading the industry in these efforts is the Israel Diamond Institute (IDI), a non-profit, public interest company funded by the government and the diamond sector, which represents all of the industry’s organizations and institutions.

IDI, whose main functions encompass marketing, industry-wide R&D, expansion of rough sources, professional training and security consulting, has recently embarked on a multipronged plan to enhance Israel’s position as a world diamond hub. “The impressive figures for 2003 and 2004 point to the inherent health of Israel’s diamond industry and its ability to adapt to changing conditions,” said Simcha Lustig, Chairman of the Israel Diamond Institute. “They also reflect the major efforts of Israel’s diamond industry, under the leadership of the Israel Diamond Institute, to expand its business activities to reach new horizons in both the rough and polished fields,” he added.

As in all export industries, marketing is one of the main ingredients in success. The Israel diamonds center in Ramat Gan, the largest in the world, was built to accommodate thousands of diamond buyers every year.

As the number of buyers visiting the center has decreased, the Israeli industry has redoubled its efforts to reach out to the buyer. The Israel Diamond Institute has led the way, by introducing Israel Diamond Pavilions at the leading trade fairs around the world. Moreover, IDI has organized high-level diamond trade delegations to both emerging and traditional markets, such as one to China this June and Japan the year before.

The shakeup in the industry worldwide caused by De Beers’ cutback in the number of sightholders receiving monthly rough diamond supplies has caused IDI to invest great efforts in seeking new sources of rough diamonds.

According to Simcha Lustig, who also heads the Institute’s Rough Diamond Committee, this is one of the most significant challenges facing the industry today. “We are working on all fronts to ensure our industry with a steady supply. We are active in all of the existing and emerging rough diamond centers, developing strong relationships with producers in Canada, Russia and Africa. We are also working with the De Beers group to increase supplies through their subsidiary Diamdel as well as on the free market, which is especially important for small and medium-sized manufacturers.”

Lustig added that IDI organized a Rough Diamond Seminar here in July, 2004, to bring diamond producers and explorers from all over the world into direct contact with Israeli manufacturers, and he expects this to result in new trade and investment ventures.

The third leg of IDI’s plan concerns investment in technological research to streamline the manufacturing process. Israel diamonds manufacturers are active all over the world, and much of Israel diamonds exports are manufactured in countries with lower labor costs. IDI’s Lustig hopes that by increasing investment in automated manufacturing systems Israel will be able to reclaim a good part of this manufacturing activity. His plan is to develop a totally mechanized process, which will be employed in a “service factory”, that can provide manufacturing services to local companies on an “outsourcing” basis. Plans are to begin testing the beta site later this year.

The Internet is also opening up new horizons for the Israel polished and rough diamonds industry.
The IDI recently inaugurated a new portal site, www.diamond-il.co.il The highlight of this Israel diamonds portal, and a feature of great importance to potential buyers from abroad, is a powerful search engine that enables them to locate diamantaires by types of goods offered. Registration for this Israel diamonds site and the number of entries has increased steadily since it was launched in February 2004.

The Israel diamonds industry has indeed come a long way since it was first launched in the 1930’s by enterprising immigrants from Belgium. A handful of factories operated in Netanya and Tel Aviv in the 1940’s, and came together to establish the Israel Diamond Exchange in 1947. During WW2, when the traditional European centers fell under German occupation, Israel became a major source for polished diamonds. With the establishment of the state in 1948 came a large influx of immigrants, who were enlisted to work in this growing industry. Locally-developed manufacturing techniques made it possible to train workers within months.

As the Israel diamonds industry began to export globally, Israeli diamantaires became increasingly cosmopolitan, first selling their goods in the far corners of the world and later setting up offices in New York, Antwerp, Hong Kong and Tokyo. With the entry of the second and third generation of Israeli diamantaires into their family businesses, manufacturing and marketing methods have become more sophisticated.

Still the essence of the Israel diamonds industry has remained the same for the past 60 years: a high level of professional expertise, combined with originality, creativity and ability to adapt to changing conditions. Building on these assets the Israel Diamond Institute is confident that Israel will retain its position as a major world diamond center, and its leaders are committed to investing all necessary efforts to ensure that this is so.