Israeli Diamond Firm Tzvi Or Closes

Tzvi Or, an Israeli diamond trading and manufacturing company with offices at the Israel Diamond Exchange in Ramat Gan, has closed its doors. On Sunday, the IDE posted a notice in the diamond trading hall. The company reportedly owes some $3.5 million to banks and dealers in the exchange.

According to diamond dealers in the exchange, the company recently started to return goods to suppliers. Last week the rate of returns was high and it became clear the company is suffering from financial difficulties.

According to local press reports, Tzvi Or closed its office in New York, laid off employees at its IDE offices as well as workers at its polishing plant.

Traders in Israel are moody, expressing grave concern that other companies, mostly small and medium size firms will not survive the tough times. A couple of Israeli companies are currently returning goods in the market, raising fears that more closure announcements will soon be made.

With weak diamond jewelry sales in the U.S., the reasons for these concerns are clear. Israel is the leading supplier of polished diamonds to the U.S. and stands to loose the most. In October, the last month for which there is reliable trading data, Israel exported to the U.S. $610.26 million worth of goods, compared to $955.63 million in October 2007, a 36 percent drop.

Tzvi Or was not available to comment.