Moti Ganz, the billionaire icon of the Israeli diamond industry, urged all the stakeholders to burn more money in the advertising of diamonds in a bid to lift it up from the present status where it is not performing well in the market.
Ganz, who has manufacturing plants in Botswana, China, India and Israel, also went against the trend by saying that the diamond industry is its own enemy by allowing the tender system which has seen prices sky-rocketing in the recent years.
Rough diamond prices are rising by five percent annually on compound basis which has led a number of manufacturing plants being heavily indebted. According to the industry and banking sectors, the debt level of the manufacturing plants is between US $ 12 and 13 billion while the shortage of supply and tender system is ever increasing the prices of rough.
“There is only one company which is spending money on advertising and that is De Beers. We have to spend more money in advertising,” Ganz told a select group of journalists from Botswana, India, Israel, London, Russia, South Africa and United States of America.
“We have to understand that diamonds are different and they are a luxury. They are not like a hand bag which a woman can buy this year and can give it to her maid tomorrow then get another one.
“I think we have to sit down with other miners, such as Rio Tinto and BHP and get them to understand that diamonds are different and they need to spend more in advertising,” he emphasised.
His comments were instantly supported by De Beers at the Third Israeli Rough Diamond Conference held in Tel AvivÔÇö some 20 minutes drive from Ramat GanÔÇö where Gareth Penny, De Beers Managing Director said they have always carried the industry on their back and now is the time for every player to put his hands into the pocket to promote the industry.
Ganz shrugged off concerns related to the sky rocketing prices saying that there is enough rough in the market but the problem is that it ends up in the wrong hands.
“There is enough rough worth around US $ 15-17 billion which is in stock. That is enough for one year supply and the problem we are facing is that there are no buyers because we do not advertise enough. The diamond industry is working against the global trends. What can we do with stock without buyers,” he asked.
“The manufacturers do have a great number of polished diamonds but we continue to run after the rough hence we pay higher prices,” he said.
His comment was in contrast to what the maverick billionaire, Lev Leviev, an Israeli entrepreneur, who said the ever increasing prices are a ploy designed by the world to punish the Jewish community.
“People who produce the rough want to get the maximum and they want us to pay up front. They have even introduced the tender system, which I think is a sucker and it is going to remain until it is replaced by someone anonymous,” Leviev said.
“Management of producers wants to squeeze us and I think that is a joke. How come prices do not go up in other minerals?
“Today, if you want to buy rough there is no where to buy. And you turn to the tenders, the prices are so high and that is why companies are going to go bankrupt,” Leviev said.