Diamond industry sparkling

ramat gan, israel | This country’s diamond industry continues to shine.

Shmuel Schnitzer, president of the Israel Diamond Exchange and president of the World Federation of Diamond Bourses, explained that the United States is by far Israel’s largest market for diamonds, purchasing two thirds of the cut and polished stones leaving the country.

Israel’s Diamond Exchange, which is the largest of the world’s 24 such exchanges, is located in a large complex in three high-rise glass buildings in Ramat Gan (adjacent to Tel Aviv) and contains 1,000 offices and 2,500 members. Thousands more people are employed in lapidaries around the country, but it is within the secure confines of the Ramat Gan towers that trading takes place. And it is by coming to Israel’s Diamond Exchange that international diamond firms can find the best deals.

Added Schnitzer, “More and more Israeli companies are opening up offices overseas and we are sending increasing numbers of delegations to participate in major fairs.”

The Schnitzers are something of a diamond dynasty in Israel.

“I am a lawyer by education,” he said, “but since I was a teenager I went to my father’s factory to learn about cutting and polishing diamonds. And it is the same with my son Shai who is studying business administration at university.”

Schnitzer’s father, Moshe, who also served as president of the Israel Diamond Exchange, founded the family firm of M. Schnitzer and Co. in the 1940s after the owner of the lapidary in which he was the foreman returned to Belgium after the Second World War. And in many ways his story is the story of diamonds in Israel.

Sent by his parents to pre-state Israel from Romania in 1934 at the age of 13, he was one of many immigrants looking for a better life. Within a few short years he had joined the Irgun Zva’i Leumi, (National Military Organization), which aimed to reclaim the land of Israel through military rather than political means. When the tough, imposing, charismatic Schnitzer turned his energies to building the new state, he had no problem convincing dealers of the efficacy of building a diamond center in Ramat Gan.

“It was a desert here in the 1960s, not one building then,” he laughed. “People said we were crazy.”

However, until Schnitzer had the funds to found the diamond exchange he would do business in a small Tel Aviv coffee shop. Indeed the elder Schnitzer is seen as the architect of Israel’s diamond industry, which from the 1950s until the emergence of high-tech in the 1990s, was Israel’s largest foreign currency earner. Now, following the dot-com crisis of the past two years, the shine on diamonds has suddenly returned.

However, the younger Schnitzer hastens to stress that high-tech and diamonds are complementary rather than competitive sectors.

“This is a very competitive business and high-tech helps us stay ahead of the field,” he explained. “Because of cheaper labor elsewhere in the world, Israel is cutting less very small stones. We focus on medium-size and large diamonds, and we can’t be complacent about our hold on this market segment. High-tech can help us do this.”

The introduction of advanced technologies into the diamond industry, such as computer programs to design the optimum cut for a stone and laser technology for the actual cutting, has been achieved through R&D conducted by the Israel Diamond Institute on behalf of the entire Israeli diamond industry. Use of robotics is another way forward for the diamond industry.

“High-tech methods are vital in helping Israeli firms maintain and even increase their market share,” said Schnitzer. “But ultimately robots, computers and lasers are no substitute for human expertise.”

Israel in the Ballpark