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Speech Transcript: Eli Avidar Introduces New IDI Campaign

It is very important to learn lessons from the past two years as the industry moves towards full recovery.
Mar 19, 2010 4:01 PM   By Eli Avidar
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RAPAPORT... Ladies and Gentlemen,
 
It is a great pleasure to welcome you once again to the annual IDI press lunch. Another year has passed;  2009 was a difficult year for the global diamond industry, and Israel was no exception. However, there is certainly a light at the end of the tunnel. We are seeing some encouraging signs that the worst is over, and that we are emerging from the economic crisis. However I believe that it is very important to learn some important lessons from the past two years, which we should put into practice as the world diamond industry progresses to full recovery.
 
Indeed, 2009 was undisputedly a tough year for the world diamond industry. And although the Israeli industry is thankful that the number of bankruptcies that it suffered was close to zero, being in a better situation cannot compensate for the problematic state of the industry as a whole.
 
It’s true that Israel’s polished diamond exports in 2009 were down 37 percent over 2008, totaling $3.922 billion in 2009, compared to $6.238 billion in 2008. However, with the hardships, the Israeli Diamond Industry is proud that of the three leading diamond hubs worldwide, it is the only one which succeeded in contending with the crisis independently, without government credit or assistance.
 
2009 is a milestone because it was the year when the Israeli Diamond Industry introduced a pioneering philosophy – it actually acted in contrast to the prevalent market conditions. As a rule, when business is flourishing, the IDI allows itself to be more selective about its marketing investments and it settles on a niche.
 
But when things became stormy – which was clearly the situation in 2009 – we decided to become proactive. The slogan chosen for our multi-faceted marketing campaign says it all: “Together Works.” It was clear to us that the only way to survive such a crisis was to join forces rather than adopt a policy of “every man for himself.” “Together Works” is proof of what can be achieved during the gravest crisis to affect the industry in the past 30 years.
 
“Together Works” spearheaded in two directions: The first addressed our partners in the industry all over the world, and the second – our members in Israel. Our message was clear:  We assured both groups that IDI was committed to supporting them through the entire crisis and took specific steps at our expense to ease the way for more business to be conducted even at this difficult time.
 
We ensured that resources were not wasted on superfluous competition with other diamond centers. This was not the time to bicker about which hub was superior to the other. It was a unique opportunity to pool all of our resources in order for the global diamond industry to emerge from the financial crisis stronger than ever before.
 
As to our Israeli industry members, every effort was made to expand contacts and reach developing markets. Resources were invested in creating the conditions conducive to doing business. Due to the IDI’s special buyers’ campaign – which was part of “Together Works” - a large number of buyers, many more than expected, visited the Israeli Diamond Exchange and received free hotel nights, making new contacts in the industry in the process.  
 
It’s a well known fact that every crisis also presents new opportunities. Our marketing plan enabled Israeli diamantaires to learn more about e-commerce, social networks, and additional aspects related to cutting-edge marketing strategies. New avenues of activity were opened up – a free 1-800 number for retailers and wholesalers in the United States, as well as Call Asia, a call center for Asian markets which proved to be an overwhelming success. IDI also led the industry by launching a social media marketing campaign using Facebook, Linked In and Twitter, as well as video clips which were especially created for our diamond companies and posted on You Tube. In addition we began to publish a new magazine about diamonds, jewelry design and celebrities for U.S. retailers entitled “Reflections.”
 
“Together Works” taught us that even in the most difficult of situations, having strength makes all the difference and enables us to look forward towards a better future, instead of drowning in a state of despair. We found that strength in our industry, and the members of the Israeli Diamond Industry showed us in clearest way that they have the stamina, the level of resilience and flexibility that make us what we are. We made use of every aspect of this crisis, to build the foundation for the future. We acted with full conviction that what we do in a period of crisis will echo in years to come throughout the recovery and beyond.   
 
Signs of recovery are currently being noted. Israel’s polished diamond exports in January and February of 2010 totaled $995.3 million, a 60.7 percent increase compared to 2009, when they stood at $618.9 million. At Hong Kong March Israel had the largest national pavilion and the number of Israeli exhibitors stood at 80. Israeli diamantaires returning from Hong Kong said that the volume of business was satisfactory, the best that could be expected during these days.
 
Once again I want to say that we started to “speak, sing and dance” Chinese in January 2007, and without any doubt it was an amazing investment. But it is not only about selling in China, it is about generic advertising in China in order to educate the market to consume more diamonds. I am not going to speak about those two words – generic campaign: There have been too many words said and no action in that direction.
 
India as a consuming market is positioning itself as one of the fastest growing markets in the world. Recognizing this, we signed two MOU's in India: The first in November 2009 with the Gem and Jewellery Export Promotion Council of India, and the second in January 2010 with the All India Gems and Jewellery Trade Federation.

 I do believe that there is a sense of concern among parties in India, and I want to tell them that instead of wasting our time on concerns, we should all focus on expansion. The future lies in cooperation.
 
Nevertheless, as we slowly emerge from this crisis we must be very careful not to repeat past mistakes. It is vitally important for the members of all diamond exchanges worldwide to act responsibly rather than to revert to patterns established in 2006 and 2007. Otherwise, we may well be planting the seeds for the next crisis.
 
IDI chairman Moti Ganz has spoken repeatedly about the need for greater responsibility in the diamond industry. In his position as world president of IDMA, he has called for increased accountability when it comes to manufacturing, service, credit and all the other areas that are so crucial to the industry’s welfare.
 
Moti Ganz has said that the turbulence during 2009 served as an educational year for the world diamond industry. He has called on the world industry not to forget the lessons of the past year as things get better. He has said that the leadership and the players in the world diamond industry must conduct a responsible policy in order to maintain a healthy diamond industry that will expand on the basis of a firm foundation.
 
Thus, it is with great pleasure that the IDI launches a new campaign today - in the wake of “Together Works” – called “Responsibility is Good.  Business.” The 2010 campaign advocates responsible business practices that will ensure that the global diamond industry will maintain stability not only for the next year or two but for the coming generations as well.
 
The type of responsibility that we are calling for today is related to four areas: Manufacturing, marketing, customer service, and credit. When it comes to manufacturing, a new policy must be adopted. Rough diamonds must not be purchased at any cost. Diamantaires must not be a party to actions that artificially send rough prices soaring. As Moti Ganz has said many times, manufacturing should match polished demand worldwide.
 
In addition, the Israeli Diamond Industry must be responsible in the way it markets its products. Marketing has always been a strong point for the Israeli diamond companies but we need to responsibly seek out new markets and develop the traditional ones as much as possible.
 
In the area of customer service, Israel has always been aware of the needs of its customers. But needs are changing – the area of consumer confidence is of utmost importance today and CSR – Corporate Social Responsibility is something that consumers are looking for when buying diamonds. Diamond companies need to be environmentally responsible and to include that fact in their marketing messages.
 
Related to this is the subject of responsibility in stopping all sales of “conflict diamonds.” Israel is chairing the Kimberley Process during 2010. As chair, we must ensure that the Kimberley Process, which is facing several significant challenges, will be strengthened and consolidated in order to prevent its erosion and to maintain its relevance and vitality.
 
Looking forward to 2011, there is much to be done. Here, in Europe, the effects of the crisis are still being felt. Europe has not proven to be as resilient as we expected, but we believe it is only a question of time and this vibrant continent will soon return to normal. Although we have heard the news of the last few months of economic difficulties among some of the European countries, we do believe that Europe will recover and will return to its level of strength and economic stability very soon.
 
As usual ladies and gentleman, the information about our future actions will not be revealed today but in due course. It has been our policy in years past to keep your interest, and we will make public those future actions in the future.
 
Twelve months have passed since I met some of you. Those were the most difficult 12 months in the industry in the last 30 years. But we passed through it relatively unharmed and with a set of experiences that will help us build the industry in the future.
 
We need responsibility in each and every aspect of our business. We need responsibility because responsibility is good business. Responsible policies and actions are the true foundation for a better and more stable diamond business.

Thank you for your attention.

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Tags: China, Conflict Diamonds, Consumers, Eli Avidar, Government, Hong Kong, IDI, India, Israel, Jewelry, Kimberley Process, Manufacturing, United States
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