We publish courtesy of IDI blog
Author: Roe Kalb
By Hila Weissberg & Ora Koren and, TheMarker
Like a well-directed scene in an action movie, three men accompanied by a young woman entered a diamond exhibition in Mumbai last month. Their target, it appeared, had been picked ahead of time – Dalumi Israel’s diamond booth. While the men began examining the diamonds on display, the woman quickly grabbed a box containing $1.4 million worth of diamonds and slipped it into her bag. By the time the Dalumi salespeople noticed the theft and reported it to the expo organizers, who identified the thieves on the security camera footage, it was too late. The four had vanished from the expo area and safely taken off for Hamburg via Dubai. Interpol helped stop them at the Dubai airport and return the diamonds to their owners.
This amazing story, which created no small stir in the diamond industry, did not flap Israel Diamond Exchange Honorary President Shmuel Schnitzer. “It’s not easy to steal diamonds,” he declared in an interview with Ora Koren and Hila Weissberg for TheMarker financial newspaper. “The only thefts happen at expos that are open to the general public – whether it’s Las Vegas, Hong Kong, or India. The Israeli booths are equipped with security cameras, which is exactly how the thieves were caught at the India expo – they were filmed. On the other hand, cases of diamantaires being robbed are frequent. It happens to diamond dealers operating in the US or east Asia, and it’s a problem.”
As if the [global financial] crisis weren’t enough, in recent years diamond dealers are facing a new, unexpected threat: handmade (synthetic) diamonds. These are diamonds created in laboratory conditions that look like the real thing – to the naked eye, certainly – and cost much less. According to estimates published on the Israel Diamond Institute website in 2008, 500 million carats of handmade diamonds are being produced every year, at prices lower by double digits than prices for real natural diamonds.
Again, Schnitzer seeks to calm the panic. “People aren’t threatened at all. These are diamonds made in a laboratory, and that’s the difference,” he stresses. “When a woman is given a diamond, she doesn’t want an imitation, but the real thing. An expert can spot the difference in a second. So we don’t feel competition, and we didn’t feel any drop-off in sales. Handmade diamonds bit into a different market sector – I don’t want to say ‘gemstones’ so as not to put them down – but it could be said that handmade diamonds come at the price of other jewelry.”
Even so, this is a niche that is intended to deceive
“Correct, that’s why there’s a law that requires full disclosure, and people take care to do so – they don’t want to be sued.”
Only one option – go into the business
After two difficult years, 2010 began with a more optimistic mood: diamond exports woke up, and if everything goes as planned, Schnitzer believes that within two years exports will return to their record levels of 2008 – over $6 billion worth of polished diamonds and $3.3 billion in rough diamonds. The US was and remains the main market for Israeli diamond exports, and its place at the vortex of the crisis had a severe effect on the Israeli Diamond Industry. If in 2007 the US accounted for 65% of all diamond exports, today it represents 35-40%, with China, Hong Kong, and India slowly taking its place.
Schnitzer, 61, has breathed diamond dust since he was born. His father, the late Moshe Schnitzer, was one of the founders of the Ramat Gan Diamond Exchange, and like many sons who grew up in the lap of diamonds Shmuel eventually found his way into the family business. It didn’t end there. Like his father, who served as president of the Israel Diamond Exchange for 26 consecutive years, Schnitzer was drawn into diamond politics. After three terms and six years as president of the bourse and after serving as president of the World Federation of Diamond Bourses, Schnitzer was named honorary president of the IDI and WFDB for life.
“I grew up in a home where there was one business in the world – diamonds,” Schnitzer says. “There were no other possibilities, like my children have. There was one option – go into the business. It was as clear as day. My father was president of the bourse for many years, so the politics were also always at home. Fortunately, I liked it and enjoyed it. I got the passion for diamonds from my father.”
“This exhibit will interest everyone”
An exhibit of gemstones carved into animals and flowers called “And Thou Shalt Breathe Life Into a Gem” opened last month at the Diamond Museum at the Ramat Gan bourse, and will run through the end of December. The gems were designed by artisans from the German city Idar-Oberstein, one of Europe’s diamond and gemstone centers. The exhibit, which is being held under the auspices of German Ambassador to Israel Dr. Harald Kindermann, will feature over 140 items, worth tens of millions of dollars.
Shmuel Schnitzer, honorary president of the Israel Diamond Exchange and chairman of the directorship of the Harry Oppenheimer Diamond Museum, explains that this is the most important exhibit the museum has held since the Kremlin jewels were put on display in the 1980s. “This is art that has never been displayed in Israel, because there usually isn’t a lot of willingness in the world to bring art treasures here,” he says.
“The Israel Diamond Exchange has excellent relations with the Idar-Oberstein bourse, and the exhibition reflects that. Our industry is relatively weak in the European market, because the Antwerp diamond center is closer, geographically. So strengthening the ties with German diamantaires will strengthen the entire Israeli industry’s connection with Europe.”
Schnitzer notes that the museum expects some 3,000 visitors a month. “The museum is the face of the industry,” he explains. “And so especially after the economically challenging period we weathered it’s important to highlight the artistic side and appeal to a broad public.”