Foreign Companies Looking to Manufacture in Israel
January 23, 05At a press conference to conclude 2004, the heads of the Israeli diamond industry revealed that at least one non-Israeli company is considering opening a polishing facility in Israel, that there are ongoing negotiations to bring a major Israeli bank (probably Poalim) to give Israeli diamond firms credit, and that in the next few months a support office will be opened in NYC.
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Concluding a year of work is usually a festive event with bright expectations for the future. True to form, the heads of the Israeli diamond industry, IDE President Shmuel Schnitzer, Manufacturers Association President Motti Gantz and IDI President Simcha Lustig, spoke of the achievements of the Israeli diamond industry during the past year and the challenges it will face in the near future.
Most of the numbers have been announced already and covered here. But there were a number of new ones. Israeli manufacturing, for instance, grew in value to $2.77 billion, 40 percent of total exports.
It is interesting to note that while the volume of polishing decreased in carat terms, the value of polished rose beyond the increase in the price of bigger goods. According to Manufacturers Association General Manager Motti Besser, this is a result of the Israeli polishers’ focus on increasingly bigger goods. Carat figures were not supplied.
According to Besser, thanks to a 25 – 30 percent reduction in polishing costs, at least one non-Israeli company is considering opening a polishing plant in the country.
Bank indebtness increased to $1.9 billion from $1.7 billion in 2003 and is currently about 18 percent of total exports.
According to IDE CEO Yair Cohen, the industry is negotiating with a “major” Israeli bank to give credit to the Israeli industry. Currently Bank Poalim, Israel’s second biggest bank, is the only Israeli bank that is not actively involved in the local diamond industry or has an office in the Exchange.
The Indian bank that voiced an interest in opening a branch in the Exchange is, according to Schnitzer, moving forward and is currently in the approval process.
De Beers’ Diamdel supplied Israeli diamond firms with $130 million worth of rough, out of the promised global supply of $500 million. The 16 Israeli Sightholders did not get a share of this supply.
Schnitzer said that he was encouraged by the desire of many young Israelis to join the trade in Israel, saying the IDE accepted about 100 new members last year. However the decision to limit the opportunity to join to sons and in-laws of Exchange members will remain for now, while perhaps allowing a few new members from outside that circle. The rationalization for this, he said, was to protect existing Israeli firms.
Lustig said that the Diamond Institute is in the midst of a branding process of the Israeli industry by branding firm Parazr and that as part of its aim to support marketing efforts, the Institute will open an office in New York in the next few months.