Low labor costs, proximity to markets in Europe, and an entry into Arab countries - the Israeli diamond industry recognizes the enormous potential of Turkey, and plans to help it establish an advanced diamond industry, sources inform "Globes." Israel Diamond Exchange senior VP Jacob Kattan said, "If we don't help the Turks in this area, there are more than a few countries that will be glad to do it, including India and South Africa. The Turkish jewelry industry appreciates Israel's capabilities in this field, and in the new cooperation, we'll help to establish advanced diamond polishing."
About 20 Israeli diamond merchants accepted the invitation by IKO, the largest organization of Turkish jewelry manufacturers, which has over 3,000 members, to participate in the recent international jewelry exhibition in Istanbul. The Israelis reported that they had been impressed by the Turkish authorities' determination to develop the local diamond industry, among other things in a way that will provide more jobs throughout the country. While the Turkish jewelry industry is considered one of the most advanced in the world, Turkey imports the polished diamonds from India, Belgium, and also from Israel. "The leaders of the Turkish jewelry industry proposed to us a program for opening a diamond compound of 150,000 sq.m. in Istanbul, a large part of which will be used to manufacture diamonds. They need the know-how and technology that we can make available to them. Labor costs in Israel are high, salaries are about $2,000 per month, and there the cost is $450-500, in addition to the attraction of proximity to markets in Europe and access to markets that are closed to us at present, such as Arab countries. With the development of our relations with Turkey in this area, we'll be able to enter more countries through the back door. We'll send experts and advanced technologies to Turkey, and do some of the diamond polishing work within Turkey," Kattan told "Globes."
Israel Diamond Exchange president Shmuel Schnitzer today called the connection between Israeli diamond merchants and Turkey a strategic one. "It is very important to strengthen commercial ties with the Turkish jewelry sector. This is a large market that can be opened to Israeli diamond merchants. Turkey is emerging as a future leading jewelry manufacturer, and the connection between us is strategically important," he said.
Following the warming of ties between diamond merchants from the two countries, the Israel Diamond Exchange in Ramat Gan is considering having the Israel Diamond Institute of Companies open an office in Istanbul, concurrently with the understandings reached with the leaders of the Turkish jewelry industry, under which the local diamond manufacturers organization will found a diamond merchants club that will be registered at the World Federation of Diamond Bourses, and will be committed to the arbitration rules prevailing in the industry. The leaders of the Israel Diamond Exchange announced that they intended to help Turkey do this. According to Kattan, even before such a club is set up, the IKO leaders will develop a binding arbitration institution to solve monetary and commercial disputes between diamond merchants from the two countries when necessary.
"This is the first time that an official Turkish organization has accepted the Israeli diamond merchants so openly," Kattan stated. "We thought at first that they be careful about keeping a low media profile in this matter, but we were surprised to find that it was being covered extensively in the local media. Turkish diamond merchants with whom we spoke about the crisis between the two countries told us that political matters should be set aside, and that the job of businessmen is to do business. At the same time, it would be right to introduce this activity gradually."
Figures published last August by Israeli Minister Counselor - Trade and Economic Affairs Joseph Abraham clearly show that despite the crisis between the two countries, trade relations are moving ahead. Trade between the two countries totaled $5 billion in 2014, and Turkey is considered Israel's sixth largest export destination. Ministry of the Economy figures show that Israeli exports of polished diamonds to Turkey totaled $6.1 million in 2014 and $7.7 million in 2013.
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2015
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