IDI’s Ganz outlines views on state of diamond industry
By Udi Sheintel and Rachel Lieberman
An Exclusive Interview with Moti Ganz, President of the International Diamond Manufacturers Association and Chairman of the Israel Diamond Institute Group.
Several months ago, Israel Diamond Institute (IDI) Chairman Moti Ganz was unanimously reelected for another term. We asked for his insight regarding the state of the diamond industry in Israel and abroad as well as forecasts about the industry’s future.
IDI Chairman Moti Ganz
You were recently elected for a second term as chairman of the Israel Diamond Institute. Looking back, what were the Institute’s primary achievements under your administration?
Moti Ganz responds: “The IDI’s achievements during my first term include the industry branding program that created a well-known brand for the Israeli Diamond Industry, which encourages Israeli diamond traders to expand their global activities under one brand. The brand was selected through a meticulous process.”
Moti Ganz mentions another important achievement; the expansion of the IDI Portal, which widened horizons for Israeli diamond traders, including online specialized services and tools designed to help them save time and organize their businesses more efficiently. Today, registration for appointments in the Israeli import-export room is done via the Portal, which also offers in-depth news items and articles in Hebrew, English, Chinese and Russian, while reaching out directly to new audiences in China and Russia.
According to the IDI Chairman, another achievement is related to the IDI’s decision to focus marketing efforts on designated countries and increase marketing efforts in the up and coming markets of India, China and Russia – 3 markets with great potential.
And the best part, states Moti Ganz, is the IDI’s multifaceted marketing campaign, “Together Works.”
He states: “This campaign, which incorporates intense marketing activity in a variety of areas, is intended to support the diamond industry during the current crisis. We are the only diamond center in the world to conceive and develop such a marketing project.”
What do you intend to focus on in your second term as IDI Chairman?
The IDI chairman replies that in light of the financial crisis, he intends to develop and expand on the “Together Works” plan. He adds: “I am also pleased to say that we are currently investing in training diamond cutters and polishers again.”
Do you think the IDI is doing enough to promote the Israeli Diamond Industry in this time of crisis?
Moti Ganz explains that the IDI was also hit by the drop in revenues, a decline of 50% compared to the previous year. He elaborates: “We are required to fund these new activities while using the Institute’s reserves. We will not be able to sustain that for long and eventually we will have to cut back on successful activities, with the exception of marketing, which is a field that has not been compromised despite the crunch.”
As one of the prominent leaders of the Israeli Diamond Industry, you recently met with the Minister of Industry Trade and Labor Binyamin Ben Eliezer in order to forge an agreement regarding state guarantees for the diamond industry. Do you bring any good news in this matter?
Moti Ganz responds: “Unfortunately the issue is still being studied by the highest ranking officials in the government and I hope that we will have positive answers soon. We are still the no.1 export industry in Israel, and we contribute significantly to the economy’s growth in many areas. I would like to take this opportunity to thank Minister Binyamin Ben Eliezer and the ministry’s staff for their commendable contribution to the Israeli Diamond Industry.”
The global diamond industry has been caught in the throes of a major crisis in the past year – as president of the Diamond Manufacturers Association both in Israel and worldwide, what do you think can be done to extract the global diamond industry from the mire? What kind of steps should be taken?
Moti Ganz replies that following the global financial crisis, the global diamond industry has been adjusting production to demands in the field. The crisis, which has lasted for a year now, is a global financial crisis and not a crisis specifically connected to the diamond industry. “We, as manufacturers, acted with the utmost responsibility. In the past year, diamond companies have reduced manufacturing as well as rough diamond sales. In the past two months there has been a certain resurgence in the markets, which has led to expanded purchases of rough diamonds, diamond factories reopening in Israel and the world, gradual increase of production, and an increase in polished diamond sales to jewelry stores and retail chains. This expansion policy is being carried out gradually while paying careful attention to changes in the retail field.”
In conclusion, he stressed: “Nevertheless, turnovers are still relatively low compared to previous years. I believe that the revival in the field, together with the moderate improvement in the global economy, will gradually lead to additional growth.”
You recently pointed out that diamond traders are forced to finance jewelers and other parties along the pipeline. Moreover, some of the industry’s leaders have taken a stand against the traditional “memo” method – do you think that the old ways can be changed? How do you think these systems should be restructured?
Chairman Ganz states that one of the main problems that have surfaced during the crisis is the issue of credit. The manufacturer is required to provide huge credit to jewelry retail chains. “I have suggested to my colleagues, presidents of diamond manufacturers associations, to revert to a time when the polished diamond dealer served as a mediator between manufacturers and jewelry retail chain owners. This type of dealer, who thrived in the past, knew how to offer the most appropriate credit to jewelry retail chains and take the load off of us, the manufacturers. I hope that the system in which financing the pipeline relies entirely on the manufacturer will change.”
Some people believe that there are signs of recuperation in the Israeli market. Do you think the Israeli market is on the high road? Is the Israeli Diamond Industry beginning to recuperate? What about the global diamond industry?
Moti Ganz replies: “Unfortunately, the Israeli diamond industry is not impacted by the recovery of the Israeli economy. Our diamond markets are in the United States and in Asia – only an economic recovery in these markets will lead to further recovery of the global diamond industry.
One of the ways to speed up diamond sales in the world is through generic promotion and marketing of the diamond. An international committee was recently formed, funded by the world’s biggest diamond producers – when do you think a plan will be drawn up and become a reality?
The IDI chairman explains that the International Diamond Manufacturers Association and the World Federation of Diamond Bourses fully support the concept of generic diamond marketing. “The committee is in the midst of the process of choosing a director. This matter has been delayed because of changes in Alrosa’s management and the committee members’ desire to make the decision about the director unanimous. I hope that this matter will be settled soon and that the committee will start working at full speed.”
Courtesy of the Israel Diamond Industry Portal www.israelidiamond.co.il