Trade Must Continue Transformation, Dvash Urges

RAPAPORT... The week of September 14 was as momentous as they come for Yoram Dvash. The 56-year-old head of the Israel Diamond Exchange was elected president of the World Federation of Diamond Bourses (WFDB), having served as its interim leader since April, while his office facilitated the biennial World Diamond Congress (WDC) taking place for the first time via Zoom.Meanwhile, the historic Abraham Accords peace agreement was being signed in Washington, DC, normalizing ties between Israel and the United Arab Emirates (UAE) and Bahrain, with the diamond industry looking on as an obvious beneficiary. The bourses in Ramat Gan and Dubai wasted no time outing their relationship that same week, forging a strategic partnership that will see them share knowledge and open offices in their respective locations, among other initiatives.  In the context of the diamond industry, the deal felt natural, "because we already knew each other well," Dvash stressed of his relationship with Ahmed Bin Sulayem, chairman and CEO of the Dubai Multi Commodities Centre (DMCC). "It's a win-win-win for everyone - Israel, the UAE and the wider industry." Everyone stands to gain when you consider the global nature of the trade, Dvash explained in a recent interview with Rapaport News. "Belgians and Indians sell in the UAE and Israel, so they'll also benefit. The potential is great," he added.The agreement, along with the WDC, capped a challenging half-year for Dvash and the wider trade, as Covid-19 had "harshly affected" the industry, he reflected in his address to the congress. And while the diamantaire pointed to the unity and cooperation that the industry had managed to forge during the crisis, he also recognized the wide variety of perspectives he must consider in his role at the WFDB. Varying opinions and interestsDvash acknowledges that the trade is looking for guidance on how to navigate the crisis, but he is also sensitive to the many interests the WFDB's members hold - which makes providing that leadership a challenge. "We have to remember that we're not a private company," Dvash told Rapaport News. "We're a federation with many varying opinions and interests. India is a manufacturing center, the US is marketing, Israel and Belgium trading. All our members have different perspectives."Dvash stepped in as acting president of the WFDB after Ernie Blom resigned from the post for personal reasons. That was shortly after the coronavirus spread globally, shutting down the industry and leaving the trade unable to do business. The pandemic forced the diamond industry to work remotely, without the face-to-face meetings and handshakes that traditionally drive its business activity. While Covid-19 continues to spread, it's difficult to implement an industry-wide strategy to cope with the pandemic, Dvash admitted, given that "we still have limitations in important centers like Surat, Ramat Gan, Antwerp and New York."Shift to digitalThat said, Dvash counts some victories for the trade amid the turmoil. Covid-19 has accelerated the digital revolution that "we all knew was going to happen," impacting both the rough and polished trade."Our industry has always been based on travel. Rough dealers and manufacturers have traveled to sights and tenders; polished traders to diamond centers to inspect the stones they buy," he explained. "With no possibility of travel, we began to do business from our computers and our smart phones. We discovered that this was possible, that we could communicate with customers, suppliers, and colleagues virtually."He considers the WFDB's role in facilitating that shift to digital among the industry successes over the past six months. The umbrella body adopted Get Diamonds as its official trading platform, taking it over from the Israel Diamond Exchange to emerge as the biggest competitor to Rapaport's RapNet site. The rapid growth of Get Diamonds, which currently lists over 1.3 million diamonds valued at $5.8 billion, was an expression of unity among the trade, Dvash emphasized. Industry challengesHe wants to see a similar display of unity in other areas, particularly in ensuring the trade operates with transparency, has the right sustainability goals and is working to enhance consumer confidence. At the same time, the WFDB relies on each of the more than 30 bourses to administer these initiatives, since it's impossible to change the organization without each bourse taking small steps individually, Dvash stressed. "Our message is to make changes internally at each bourse and leave your ego aside," he said. Streamlining the bylaws of each bourse according to the central body's international standards is one such project that requires cooperation. This type of bureaucratic concern tends to dominate WFDB meetings, which was also the case during the two-day WDC - a joint gathering of the WFDB and International Diamond Manufacturers Association's annual meetings. However, that's not to say the more pressing, wider industry matters were not on the WFDB agenda.For example, Dvash recognizes the challenge that providing traceability, or source verification, might constitute for many in the trade, especially smaller dealers who make up the bulk of bourse memberships. But he also stresses that it is a positive development, since it comes from a desire to sell more diamonds and add value to the industry. Dvash takes a similarly diplomatic view regarding synthetics, recognizing lab-grown diamonds as legitimate, and emphasizing the need for transparency and full disclosures when dealing with such goods. While many bourses permit synthetics to be traded in private offices on their premises, none allow the product on the trading floor, he noted. That decision will be left to individual diamond centers. Change is foreverHowever, with the coronavirus bringing business to a standstill, Dvash recognizes that it's most important to focus on raising trading levels, boosting consumer demand and ensuring that polished suppliers and dealers who make up the WFDB's constituents are profitable in the long run.He is encouraged by the improvement in demand witnessed over the past two months. Retail in China has almost returned to pre-Covid-19 levels, and the US is working well, he observed. Businesses in the trade are operating at around 25% below 2019 levels, but are also wasting less money than before, considering the lack of travel and trade shows. While some of those market factors will eventually return, Dvash emphasizes that the diamond industry is changing forever - particularly when it comes to adopting digital. He knows the trade needs to implement further alterations, and is confident the WFDB can play a prominent role as the industry copes with and eventually exits the coronavirus crisis.After all, the coronavirus was not the sole cause of the challenges facing the industry, he noted. The trade has suffered from a lack of profitability, shortage of financing and reduced demand in recent years, and needs to transform to meet the challenges of the 21st century, Dvash urged. "This industry can take its fate into its own hands and accomplish amazing things," he concluded.Image: Yoram Dvash. (Israel Diamond Exchange)