By Albert Robinson
After a tough 2015, last year provided the diamond industry with more stability and 2017 could be even better, says Yoram Dvash, President of the Israel Diamond Exchange (IDE) and Vice-President of the World Federation of Diamond Bourses (WFDB). In this interview, conducted following the International Diamond Week in Israel in mid-February, Dvash speaks on a range of issues affecting the Israeli and global diamond sectors.
How would you summarize this year's International Diamond Week in Israel?
It was the largest and most successful edition of the fair held so far. The number of buyers and visitors was up significantly. It created huge interest in the goods offered by Israeli companies who exhibited for free. We brought in many visitors and delegations, such as ALROSA President Andrei Zharkov, as well as a delegation from Hong Kong. We always look for ways to create greater interest and participation and this year's event was a great success by all standards.
What is the current state of the markets in your opinion?
After a terrible 2015, we saw that 2016 was a bit better. Currently, we see that China is going up and the US is stable and reasonable. We hope that this continues. It's possible that Trump victory will help business and the diamond trade as well this year.
What was the most significant event in the Israeli diamond sector last year?
Without doubt the signing of an agreement between the Israeli diamond trade and the national Tax Authority was the biggest thing to happen last year – and, indeed, for many years. It allows businesses to concentrate on doing what they should be doing – running their companies – and not worrying about how much tax they will or won't pay.
Israeli diamantaires will, for the first time, pay tax on their profit and not turnover. If you don't make a profit, you won't pay any tax. It's that simple. The Bank of Israel's Banking Supervisor is happy with the agreement, which is in line with the Basel III and IV regulations, and we believe it will help our members secure bank credit.
Another important event was the opening of a factory for the production of large diamonds in the diamond complex in Ramat Gan. That follows the factory for the production of smaller diamonds that was opened a couple of years ago. Furthermore, we aim to open another manufacturing plant for the production of bigger diamonds this year. Producing larger stones is the major business for Israeli diamantaires.
We have also opened an Internet center for our IDE members in the Maccabi building. This is a major way of selling diamonds now. The old days of the Mom and Pop store are melting away and we need to enable our companies to trade using more modern means. We are able to connect firms with James Allen for the sale of their polished goods, as well as our Get Diamonds initiative.
And what are the plans for this year? What new developments can we expect to see at the IDE?
This year has already started in an excellent fashion. In January, we inaugurated the new Laser Cutting Room was inaugurated in the Shimshon Building entrance. It is a private initiative of some Israeli diamantaires, but the bourse supported it and pushed it forward. This Synova laser machine can cut stones at a very high level with virtually no damage. This is the kind of exchange we want to see: more technological and energetic. Soon we expect to receive the permit for the adjacent Synova laser factory covering 400 sq m area.
The big advantage is that it is within the IDE compound. That means that diamantaires enjoy greater convenience and security. They don't need to leave the complex with the goods on them or pay shipping and insurance.
We also opened our new International Tenders Center during the International Diamond Week in Israel in February. We held four tenders of goods during the week. Our aim is to create a lot of activity by attracting as much rough as possible. ALROSA President Andrei Zharkov told us that his company is committed to bringing large amounts of rough to Israel that are suited to the needs of our members. We are delighted that this is going to happen; it shows the strength and importance of the Israeli market.
There have been reports of re-organization and other changes at the diamond exchange. Can you give us details about what changes have been carried out and how they help the IDE?
We have been looking to check every possible way of making the exchange's operations more efficient and where we can save money for our members. We have carried out changes which allow us to reduce the number of hours our security people work. This saves a lot of money for IDE tenants. We have cut worker numbers and reduced the salary bill. This has allowed us to pass on savings to IDE members by reducing their rent payments. Our aim is to help members and we will be continuing with this during 2017.
It seems that there have been many new initiatives since you became IDE President in October 2015. We used to hear that the industry's organizations found it difficult to work together, what has allowed these ventures to come about?
We have management that is excellent and open to new ideas. The Managing Director of the IDE is also the Israel Diamond Institute MD. In addition, the Israel Diamond Manufacturers Association President Kobi Korn works together with the IDE and IDI. This allows the three bodies to work together in solidarity, and could not happen without the cooperation of IDI Chairman Shmuel Schnitzer and Kobi Korn with the IDE.
What is the situation regarding credit for the Israeli diamond industry?
It's no secret that we have had problems in recent years. This was not helped by the Bank of Israel's Banking Supervisor saying that the diamond sector was dangerous. This naturally made the banks concerned.
But the new tax agreement provides us with a firm base going forward. We know that the Banking Supervisor and the Bank of Israel Governor are happy with it, and that will make it easier for us regarding the banks since the situation is now much more transparent.