During his lecture to a packed hall at the Third International Rough Conference, Lev Leviev addressed the issue of manufacturers’ difficulties. “What will we bring with us from this conference? Rough producers, jewelers, manufacturers and bankers are all gathered here – but what links them all together is the manufacturer who undertakes the hardest load of purchasing the rough, paying cash and then selling it. The result is that manufacturers come and go,” stated Leviev.
“Producers want maximum prices so they use new marketing methods. They conduct tenders. The people who pay the crazy prizes in tenders are suckers,” declared Leviev.
Leviev noted that in the last five years prices of minerals have risen by 300% and more. But in the area of diamonds, prices only rose by lower double digits. Prices even dropped. He noted that there is no shortage of the other minerals but in contrast to the diamond industry, the other industries are properly structured.
“We developed a simple method. We developed a second and third tier of partners beneath us. Small and medium-sized manufacturers who manufacture for us and we sell the polished goods,” he explained.
“The large producers do not need to trigger competition among the customers. They need to allocate different types of merchandise to specific customers. The producers need to understand that for their business to grow by hundreds of percents, like other worldwide markets, they must allocate rough for designated manufacturers.”
Leviev called for all rough producers to invest in diamond advertising as a generic product. “The producers do not channel business in a uniform or sophisticated way. They must help the manufacturers with their work rather than compete with other manufacturers.”
In some cases prices rose beyond 100%. The reason is that this merchandise is in the hands of only 50 to 60 companies and they protect it. There is no competition between manufacturers.
“All of the rough producers must sit down together and build a uniform marketing strategy. A strategy for distributing the merchandise so that manufacturers will no longer compete with each other. That way everyone will have much greater profits. That way they can take care of themselves,” he added.
In response to a question posed by the Israel Diamond Industry Portal as to whether he was actually calling for a cartel of rough producers, Leviev stated that a cartel means marketing through a single channel. However, in this case he is interested in organizing the manufacturers in order to structure proper distribution of rough, with the ultimate aim of ensuring that the merchandise falls into the right hands.
Leviev added that the dollar exchange rate is currently causing harm to the Israeli economy in general and Israeli export in particular. He advised that the Bank of Israel lower the interest rate in order to stop the strengthening of the shekel.
