“2015 was one of the toughest years for the industry since I joined it 42 years ago”, Koren says, “I’ve seen many ups and downs, but this year has been the roughest yet. The industry is suffering through a crisis on every front – less business activity, reduced sales and purchases, and a crisis in credit. We estimate there’s been a 30 per cent downturn in each of these parameters. It’s also felt in Israeli manufacturing”.

Q) Who is responsible for this situation?
A: It’s a combination of several factors. One is the global economic crisis, especially in China, and the second is the conduct of the major rough manufacturers. They failed to read the situation and up until three months ago, it was business as usual for them. We have noticed some change in the last three months: less supply, more consideration of sight holders, and a lowering of rough prices. They are beginning to protect the market by reducing supply and lowering prices. I hope these actions will bring about a change, and that rough and polished prices will begin to rise again.

The diamond market is influenced by economic crises, like what’s happening in Russia and China, and other global factors like lower oil prices. Nevertheless, the American jewelry market is beginning to pick up, and this is a major market for Israeli diamonds. That offsets the crisis in the East Asian market a little.

I think, and hope, that we’re beginning to see the light at the end of the tunnel. It’ll take time, but we’re seeing signs of recovery”.

Q) What characterized the industry in 2015?
A: 2015 was a year marked by decline. There’s been an economic slowdown, specifically in East Asia - a market that was especially strong in years past. As I’ve mentioned, major rough manufacturers have not read the situation correctly. Sightholders and big rough buyers rejected the rough. Fortunately, they’ve implemented changes recently and realized that they had to reduce rough prices.

Another issue was the credit given to the industry by the banks. Some banks just walked away from the industry, which resulted in a credit predicament”.

Q) What do you think should be done to turn things around?
A: “As a diamantaire and the President of IsDMA, I have several suggestions. In recent years, there hasn’t been enough marketing of diamonds worldwide. About ten years ago, the major rough manufacturers, especially De Beers, invested heavily in the generic marketing of diamonds. This branded diamonds as a desirable, high-end product. In recent years, marketing hasn’t been as strong. I’d suggest more aggressive marketing campaigns that will bring back awareness to our product.

In addition, the major rough manufacturers must conduct themselves more responsibly. If they continue to monitor the situation, curb or increase supply accordingly, the market will recover.

Of course, a global economic recovery will help us all. I hope that we will see signs of that in 2016”.

Koren also speaks of steps that need to be taken in the Israeli diamond industry: “The local industry must stress the marketing and advertising side of things. We have strong points that need to be stressed and marketed. Israel focuses in the supply of special diamonds. We can’t compete with the mass manufacturing of diamonds in India, but we can brand ourselves – and supply – customized orders. Israeli diamantaires give the best service in the industry. We’re also making every effort to bring back some of the manufacturing to Israel, like the Modern Manufacturing Center that we opened in Ramat Gan. Another plant is in the works”.

Q) What would you like to see happen in the coming year?
A: “I hope that in 2016, we’ll wrap up negotiations with the tax authorities so the industry can work with full transparency. This will make it easier to get credit from local banks and improve our image, and we’ll be able to reach growth”.

(By Michelle Moshelian, courtesy of the Israel Diamond Institute)