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Home > Israeli Diamond Industry > History > 1990s

1990s

The Israeli Diamond Industry in the 1990s

By Shira Ami

diamond
Moshe Milner Enlarge

Aerial view of the Ramat Gan diamond exchange from the 1990s

Several factors combined to create the “crisis of the nineties”: inability to maintain a margin between the price of polished diamonds and that of rough diamonds; fluctuations in the market for small diamonds, a change in marketing methods and financial instability in the Far East. The events in the Far East market drastically altered the ratio between the volume that the diamond industry was accustomed to manufacturing and world consumption.

The erosion of profitability in the diamond industry began in 1989 and became much more serious from 1992 on. Profitability was further reduced – considerably – when the exchange rate insurance was canceled, in 1993.

diamond
 Avi Ohayon Enlarge
 President Shimon Peres, at that time Prime Minister viewing the city of Ramat Gan from the roof of the Diamond Exchange in 1996 alongside Ramat Gan Mayor Tzvi Bar

The Israel diamond industry responded with several structural changes. The most prominent change in this decade is the gradual disappearance of the middlemen, who were replaced with direct marketing by the manufacturers themselves. The growing transition from marketing large packages in the exchange buildings to selling single diamonds and shipping to all corners of the world required considerable expansion of the marketing and administration departments and significant increases in operating costs.

The Israel diamond industry has invested efforts in improving profitability in national and international spheres alike. At home, after long, persistent negotiations, the Israel Diamond Manufacturers Association, together with the Israel Diamond Exchange, obtained eligibility of the diamond industry for the industry and trade ministry’s marketing fund, as well as recognition of depreciation on equipment by the tax authorities. On the international scene, the presidents of the diamond organizations worldwide undertook a campaign to persuade the CSO to take measures to increase profitability: statements of concern were issued at the world diamond congress held in Singapore in 1997, followed up by further talks. By mid-1997, a policy of reduced quotas of rough diamonds was already evident at the Sights.

diamond
 Amos Ben Gershom Enlarge
 

Aerial image of Ramat Gan from the 1990s

The 1990s also saw energetic activity of the Israel Diamond Institute in the fields of technology and marketing. For example, IDI organized delegations to exhibitions and diamond markets and held numerous seminars on existing and potential markets. In 1997, it was particularly active in Indonesia, the Philippines, Turkey, Basel and elsewhere.

In the last few years of the decade there was a notable addition of the younger generation to the Israel Diamond Exchange. More than 350 young members joined the exchange, adding new energy to the development of the Israel diamond industry.

Source: HaYahalom - State of Israel Jubilee edition

Images courtesy of the Govenment Press Office

By: Shira Ami
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