Waldman Diamond Company

Israeli polished diamond exports down 15 percent in 2001 to $4.5b
January 10, 2002

RAMAT GAN, ISRAEL - The Israel diamond industry exported $4.5 billion worth of polished diamonds in 2001, down exactly 15 percent from the $5.3 billion of polished exports achieved in 2000, which was a record year, reported the Israeli Ministry of Industry and Trade. This reduction in polished diamond sales matched exactly the amount predicted by market analysts at the start of 2001.

"While I am not pleased that the prediction came to be, as I am heartened by the fact that we, as a company, were given time to adjust to prevailing economic climate, and consequently adapt our production and sales program accordingly" said Alexander Waldman, the president and CEO of the WDC Group, one of Israel's leading diamond exporters," Waldman said. "However, even though the writing was on the wall at the beginning of last year, indicating a slowdown of the world economy, and more specifically a slowdown of the American economy, nobody could prepare us for all the variables. Obviously, the most dramatic and upsetting were the disastrous events of September 11 and their aftermath."

As usual, the United States remained was Israel's largest polished diamond export market in 2001, accounting for 66 percent of gross sales. In 2001, the markets in the Far East, including Japan, accounted for 18 percent, while the Europe held a 13 percent market share.

Rough imports and rough exports were both down. Israel imported a net total of $3.4 billion of rough, a fall of 19 percent compared to the $4.2 billion of rough imported in the previous year. Sales of rough diamonds totaled about $1 billion, 25 percent less than the $1.3 billion of rough sold in 2000. Imports of polished diamonds fell 14 percent to $1.8 billion, compared to $2.1 billion in 2000.

"Israel's ability to attract rough from a wide array of sources is astounding," said Waldman. "The 2001 figures show, for instance, that less than a quarter of the rough imported to Israel came directly from De Beers' vaults, and the remainder from other, free market sources. Israel certainly has proven itself to be resourceful enough to adapt to the new distribution of power in the rough diamond trade." According to Israel's Controller of Diamonds, rough diamond imports from the De Beers' Diamond Trading Company (DTC) declined 33 percent in 2001 to $800 million.

Most will have been happy to put 2001 behind them, Waldman noted. But, he added, with all that happened, the difficult year underscored the diamond industry's inherent resiliency. "This past holiday sales season proved that what we sell remains the ultimate feel-good product. Because people were looking for ways to pamper themselves and those they love, it was difficult to correlate still-buoyant diamond jewelry sales with the sluggish economy. That is something to build on for the coming year," he said.