There was plenty of good news as the leadership of the Israeli diamond industry met to sum up 2005 and report on the year ahead. Israel's rough and polished exports broke the $10 billion mark, membership of the Israeli Diamond Exchange was up and the creation of an Israeli brand diamond was announced.

 

Net polished exports in 2005 rose 5.8 percent to reach an all time high of $6.707 billion, compared to $6.337 billion in 2004. Rough diamond exports rose 20.5 percent in 2005 to $3.517 billion, up from $2.920 billion in 2004. 

 

Net imports of rough diamonds totaled $5.318 billion, an increase of 3.2 percent over $5.151 billion in 2004. Israel's import of polished diamonds increased 9.3 percent in 2005 to reach $3.897 billion, as compared to $3.564 billion in 2004.

 

Though the U.S. remained the major export market for Israel's polished diamonds, its export share declined from 67 percent in 2004 to 61 percent in 2005, with a greater weight shifting to Far Eastern and European markets. Diamond leaders noted that this was a positive trend, and pointed to a greater diversification in export markets. Hong Kong accounted for 14 percent of Israel's polished exports, Belgium 8 percent, Switzerland 5 percent, England and Japan 2 percent each, and China 1.5 percent.

 

In absolute terms polished exports to the U.S. and Hong Kong rose substantially. Gross polished exports to the U.S. stood at $7.443 billion in 2005, compared to $7.039 billion in 2004. Gross exports to Hong Kong rose to $1.795 billion, compared to $1.411 billion last year.

 

Rough diamond imports from the DTC declined from 21 percent in 2004 to 18 percent in 2005.

 

It was also announced that the increase in the number of Israel Diamond Exchange (IDE) member, which now stands at 2600, means that demand for office space is at a premium. 100 new members joined the exchange in 2005 alone. Therefore, reported Avi Paz, IDE president, plans for a new 28-floor, 28,000 square meter tower are underway. The new tower will be connected to the four buildings that currently make up the IDE by means of a pedestrian bridge. While not revealing where the proposed building will be located, it is understood negotiations are ongoing with the owners of a lot across Jabotinsky Street.

 

The Israel diamond, which industry leaders hope to make as recognizable as the Jaffa orange brand, is set to debut at the Basle World 2006 trade fair. If however, it is not ready by April, the diamond will be launched at the World Federation of Diamond Bourses (WFDB) Congress, which opens in Israel on June 23 this year. The diamond brand program has a total budget of $2 million, with half a million being spent during the first year.

 

The current state of the industry's bank credit was also discussed. Currently five banks share the debt, which rose from $1.782 billion in 2004 to $2.042 billion in 2005. However, the industry is eager to attract additional banks. Talks with Bank Hapoalim are underway, with meetings due to be held in a fortnight's time. Negotiations are also in progress with an unnamed Indian bank, believed to be the State Bank of India. 

 

However, it was not all good news for the industry, with an announcement about the difficulties being encountered by the automated polishing service offered by the technological center of the Israel Diamond Institute following the death of the project's leader.

 

The project, which Moti Besser, the managing director of the Israel Diamond Manufacturers’ Association, called "a revolutionary approach," aims to improve Israel’s manufacturing position. The initiative should improve Israeli competitiveness and offer help for struggling small and medium size companies.

 

Simcha Lustig, IDI chairman, said that the goal of the project is to reach fully automated manufacturing of 1/4 carat and above of round and fancy cut diamonds at a cost of $15 - $17 per carat, which would enable a greater part of Israel's polished goods to be manufactured here.

 

The project was set to launch in 2005, but it is now hoped will be finished in 2006.