RAPAPORT... The Israel Diamond Institute (IDI) furthered its strategy to diversify its interests in different markets, proclaiming 2008 as the “Year of India.”
Speaking at IDI’s annual breakfast press conference at BaselWorld, IDI Managing Director Eli Avidar said that IDI was seeking to enhance cooperation between the two countries’ respective diamond centers, and tap into the growing diamond consumer market in the subcontinent.
“We have several leading companies already active in India, especially in manufacturing there, but we are looking at India as a consumer market,” Avidar said. “While we compliment our colleagues from India for tapping into the United States market, we believe there is room for the same cooperation in the Indian market as well. We will push forward small and medium-sized Israeli diamond companies to be active in India.”
The focus on India comes as part of the IDI strategy to capitalize on the changing global consumer landscape as the United States economy, and its diamond market, remain stagnant, while emerging economies in India and China show healthy growth.
Working StrategyIn this latest outreach to India, the Israeli umbrella organization is hoping to duplicate the success it achieved in its “2007 Year of China,” during which it increased Israeli participation at trade shows in the Far East, opened an office in Hong Kong and established a Chinese web portal.
IDI says its success with that effort shows in the statistics. Israel’s polished diamond exports to Hong Kong nearly doubled to $1.19 billion in the first quarter of 2008, compared to the same three months a year earlier, while exports to the U.S. remained flat.
During the same period, gross exports to India soared 372 percent to $41.59 million. IDI believes that by adopting a similar strategy with India as has proven so successful in China, it can keep up the momentum. IDI is planning to present itself officially to the Indian market with a pavilion for the first time ever at this year’s India International Jewellery Show (IIJS) in Mumbai in August.
Despite IDI’s new emphasis on China and India, Israeli diamantaires stressed the continued importance of the U.S. and European markets to the industry and of participating at the trade shows in these regions.
Basking in BaselIsrael had a strong delegation of exhibitors at BaselWorld in April and diamantaires seemed upbeat about the results.
“It was a good show, we did a lot of turnover and it was better than last year,” said Chaim Fink of SDI, which specializes in larger, high-end goods. “Basel has a higher standard and higher class than Las Vegas so it suits our purposes.”
Similarly, Leibish Polnauer, chief executive officer (CEO) of Fancy Diamonds, a specialist in large fancy colors, estimated that business at Basel increased by as much as 50 percent from 2007. He stressed that huge stones of 10 to 25 carats were in strong demand, especially in fancy colors, VS clarity and up. Others reported that while clean goods and large diamonds sold well, smaller and lesser-quality goods did not move at the show and remain in inventories. Israeli diamantaires dealing in these lower-end goods are cautiously looking to the Las Vegas JCK show in May to boost sales of SI and lower goods, and also as an indicator of how the U.S. consumer slowdown will play out for the diamond industry as a whole. Some, like Fink, who specialize in larger goods, are staying away from JCK altogether. “It’s just not our show,” Fink said. “Basel is more important to us.”
Young Blood in DiamondsThe Israel Diamond Exchange (IDE) is reporting growth in its membership, particularly among the younger generation of diamantaires. IDE Managing Director Yair Cohen said the exchange ended 2007 with 2,860 active members, 120 of whom joined in the past two to three years.
“What’s unique for us is the fact that about 80 percent of the 120 are diamantaires under the age of 45,” he said. “It seems the younger generation sees the bourse as a place that has a very positive future.”
Cohen split the newcomers into two categories — those who were the second or third generation in a family business and those with no diamond background. He explained that the bourse has developed its infrastructure to help the younger generation. This includes providing free access to sophisticated technology to help make the right decisions about a stone, offering educational courses on gemology and marketing and making available small credit platforms, through agreements IDE made with various Israeli banks, for those starting new businesses.
The Marketplace• BaselWorld was deemed a success for larger stones. Smaller and lesser-quality goods of SI2 and under remain in inventories.
• 3 carats+ have seen the most movement.
• Demand is average for fancy shapes in 1 carat and smaller.
• Demand is slower for rounds up to 1 carat in I1 and less.
• Demand is strong for 10 to 25 carats, especially in fancy colors, VS clarity and up.
• Prices have increased for pink and blue diamonds of 2 to 3 carats, due to lack of supply. Demand for these goods remains high in all sizes.
• Square shapes are in demand, as well as pears larger than 1.50 carats.
Article from the Rapaport Magazine - May 2008. To subscribe click here.