Stability Reigns at IDI

Eli Avidar

The announcement was made at the annual press lunch at the Baselworld show. Revealing the strategy, Avidar said, “We believe now is the ideal time to do business with the Israeli Diamond Industry – the one trading center that offers stability in a time of volatility and uncertainty.”

To reiterate this point, Avidar presented Israel’s results for 2011, during which polished diamond exports jumped to $7.2 billion; a figure that exceeded the pre-crisis peak year of 2007. “This,” he said, “demonstrates that Israel has emerged from the crisis, stronger and more resilient than ever.”

Another way of demonstrating the stability of the industry, he said, could be measured by examining the banking debt. While the other diamond centers operated under “the illusion of an expansive credit policy,” the Israeli diamond industry reduced its total debt to just $1.7 billion, down from more than $2.2 billion in 2006. “Obviously, the reduced bank credit creates challenges for us, but at the same time results in a stronger and more robust industry,” he contended.

Looking to the future, Avidar emphasized the continuing importance of the Far East to the Israeli industry. During 2011, six companies opened offices in Hong Kong – with another joining them this year. “IDI’s Hong Kong office reports that more and more Israeli companies are sending representatives to Hong Kong for longer periods in advance of opening up offices there, so we are optimistic that this trend will continue,” he said.

He also stressed the importance of China. So far, 45 Israeli companies have joined the Shanghai Diamond Exchange, with others expanding their Chinese presence in cities such as Shenzhen and Beijing.

In addition, Avidar said new markets in Asia opening up to the Israeli industry include Thailand, the Philippines, Taiwan, Singapore as well as the return of Japan. Avidar admitted that while trade with these regions may not be so meaningful in terms of volume, the IDI sees the “huge potential for a flourishing future.”

Looking closer to home, Avidar said that sitting in Basel, it was all too easy to forget that these are trying times for the European economy. While a major financial crisis has so far been averted, he said there was, obviously, no meteoric rise in demand for diamonds here last year, and according to current conditions, there will not be an increase this year either.

Finally, Avidar turned his attention to the former Soviet Republic countries. He pointed out that these countries continue to maintain high import taxes on polished diamonds – to the detriment of the Israeli industry – among others. “This is the last major market which has yet to reduce taxes on diamonds. We firmly believe that the time has come for the diamond trade in these countries to be freed up.”