The diamond trade is a significant segment of Israel’s economy, representing 15 percent of the country’s total industrial export value and employing about 20,000 out of 55,000 people in the diamond industry globally. Among many organisations in Israel that help promote the industry in the international sphere, the Israel Diamond Institute (IDI) plays a central role in effectively developing new horizons and innovative methods for the industry.
In May 2018, IDI appointed Aviel Elia as managing director to lead the institute. Hong Kong Jewellery talked with him recently on the current situation of Israel’s diamond industry, its SME diamantaires’ development, markets of mainland China and Hong Kong, to name a few.
HKJM: Hong Kong Jewellery
AE: Aviel Elia
HKJM: How’s Israel’s diamond trade this year so far compared to 2017?
AE: This year we have seen a certain decline in diamond exports, due in large part to reduced bank credit to the diamond industry. But we are taking major steps to correct this. One of these is cooperation with the Israeli government which has created a tailor-made financial and marketing package to support the diamond sector. With this aid and the steps we are taking, we are very hopeful that Israel’s diamond exports will spring back.
HKJM: Hong Kong is a main market of Israel’s diamond exports. With a rising demand from Hong Kong, or more broadly China, how would you comment on the future trend of this market?
AE: We believe in Asian markets and we know that even if there are rough patches, and we have experienced some here and there, we are looking at the long-term. China’s middle class is growing and the demand for diamonds will grow as they become more prosperous. It is already happening. China’s consumer market has bounced back and the demand for luxury goods is rising. We need to make sure that we continue to be important players in the supply of diamonds to China.
Asia, especially Hong Kong and mainland China, is so important to us that we participate in all four trade shows in Hong Kong every year. This year we will take part in China International Import Expo in Shanghai in November.
HKJM: SME diamantaires constitute about 70 percent of Israel’s diamond trade, what are the challenges facing them?
AE: SME diamantaires make up the backbone of the industry. They are facing significant challenges, not the least of which are the bank credit difficulties. Since 2008, bank credit to the Israeli diamond industry was reduced from US$2.2 billion to US$1.5 billion. We are working with the Israeli government to try to rectify this situation which is choking the industry. The government has established a special fund to provide financing especially to the smaller players. We are also negotiating with additional banks to enter into the industry.
HKJM: What are other measures taken by IDI recently to promote the trade and help Israeli diamantaires?
AE: IDI has been the major factor in several areas that we believe will make a difference in future. We are expanding our presence in major trade shows in new markets. Besides that, we also know that traditional trade shows are on the decline, so we are working with the Israel Diamond Exchange (IDE) to promote the annual International Diamond Week in Israel (IDWI), which has become an important trade show for the diamond industry, with minimal costs and maximum business opportunities. Our format has been copied by other diamond centres as it is successful. The next IDWI will be held during 28-30 January 2019.
An additional area in which we have led the industry is e-commerce. We established Get Diamonds, a free B2B platform for the Israeli industry and we see it growing from year to year. We initiated relationships with major B2C e-commerce sites, where Israeli diamantaires are selling diamonds directly to the public around the world.
HKJM: What is your plan to better serve IDI and the trade in your term?
AE: I believe that marketing is a key element in expanding Israel’s diamond trade, and that is one of the areas that IDI is responsible for. With the encouragement and even budgets from the Israeli government, we are creating a marketing programme for the next 18 months that will include some very new and exciting marketing initiatives, which we will be leading.
HKJM: With the recent rapid development of some emerging diamond trading hubs in the globe, how do you see Israel’s current status in the global diamond industry?
AE: Israel will remain an important diamond trading hub for both rough and polished diamonds. While we have been known for many years as a centre for the polished trade, in recent years we have become a significant player in the rough diamond trade as well. The world’s major diamond producers are now holding rough tenders in Israel, especially of their larger and high-level goods.
As for diamond polishing, we are working on revitalising the polishing business of large stones in Israel. In the next few months, we will be opening, together with IDE, two new polishing factories especially for large stones, where we will offer special terms and convenient locations to attract diamond polishers. We have signed an agreement with the Shanghai Diamond Exchange, which we will polish Chinese diamonds in Israel.
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