Mr. Ephraim Zion, Founder of Dehres Limited, honors us with his opinions on the most pressing issues facing our industry today.
1. What is the best business advice you received when you were starting out?
My father was not a business man but he was a very wise man. He told me three things which remain ingrained in my mind:
Learn something every day – learn, learn, learn.
Whatever you do in life, do it the best that you can and be the best at what you do!
Keep a good reputation. "A good name is better than precious ointment" --Ecclesiastes
I couldn’t have gotten better advice in life from the man I loved and admired
2. What do you consider to be your greatest professional accomplishment?
I’ve been in the business for 55 years (10 years as a cutter). After separating from my family business, my wife and I started Dehres in 1985, bringing the company to the level where it is recognized in the industry as one of the most important diamond companies in the world. It was an incredible journey, fraught with many challenging situations but eventually we were able to achieve our goals of building a successful enterprise. We are going to continue our efforts at transmitting our legacy to the next generation.
Of course, my greatest personal accomplishment is my close family and having my three sons joining our business.
3. Why diamonds?
They are the purest and the most beautiful minerals in the world, making them one of the most brilliant of all other gemstones. And they are the hardest substance of all other minerals. They are durable and not subject to scratching and bruises like CZ and other simulants. And of course diamonds are ideal gift of love, especially in occasions such as engagements, weddings and anniversaries. They represent a tremendous, emotional and sentimental value to those who own them. It unites people in every culture and nation. It is also a status symbol indicating the success and achievements of those who have ‘arrived’.
And of course they are rare and valuable and therefore represent a great concentration of wealth and ease of transport ability.
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4. What was your first job?
Moving from Afula to Tel Aviv at the age of 11, I started to work as a locksmith first in one of the junkyards owned by one of the neighborhood relatives. But that was only for a few months, after which I started to work in my uncle’s workshop as an apprentice in charge of painting wall units and kitchen cabinets with a special lacquer.
5. How did you find yourself in the diamond business?
As a young boy of eight/nine years old, I was always fascinated by my brother’s fascinating stories about the art of cutting diamonds. He was an apprentice in one of the diamond cutting factories in Tel Aviv (I was living in Afula that time). He would always share with me the cutting process he had learnt in the factory starting with the first four corners of a diamond known as “blocking”, and then turning them into eight top corners and eight bottom pavilions.
Another time he came back from work telling me about the brillianteering stage, starting from the lower girdle facets and upper girdle facets and then of course the stars. All the talks about stars had sparked my imagination and inspired me to think of all these stars that I would be cutting in the future. At that moment, I decided that when I grow up, I would be a diamond cutter so I could see all the stars.
That day came when I was thirteen years old. During the summer holiday, my brother found a factory owner who was willing to take me as an apprentice. And that’s how I learnt the art of cutting diamonds.
6. What do you think will be the biggest challenge for our industry?
We need to see things as they are and not as we would like them to be, both in the macro and micro perspective.
In the micro: Some of the immediate challenges relate specifically to our state of our diamond industry.
Firstly, we are facing a situation of high rough diamond prices that are affecting the profitability of the diamond cutters and even their viability. With such high rough prices and diminishing profit margins, it is doubtful whether many companies can sustain such stress and pressure for long, especially when banks are losing their confidence and not willing to cooperate by lending their support to the diamond industry.
Another major hurdle is the high level of inventories that is plaguing many cutters and wholesalers. Most of them are holding huge amount of stock at high prices without being able to sell them. How could they continue to finance their high rough purchases while the market is slow and there is such an oversupply of all types of goods?
Add to that the weak consumer demand and their lack of enthusiasm to purchase diamonds at this stage and you have a recipe for continued weakness and erosion in our business environment.
One of the long-term challenges that our industry is going to have to consider is the lack of advertising and promotional campaigns. Without investment in generic advertising and promotion, our industry will lose an important market share to other luxury products. We have to revive and sustain the diamond dream and illusion at all cost!
In the macro: The general economic environment in the world, the severe slowdown of the Chinese economy (from 12% down to 6% and there are no signs of improving growth) and of course the harsh anti-corruption campaign that the Government launched two years ago. The collapse of industrial commodity prices especially oil and others did not help either. The Eurozone crisis and the insolvency of Greece are major challenges to be dealt with as well. And finally, the conflicts in the Middle East, the Russian-Ukrainian crisis and the severe sanctions imposed on Russian by the West are all having negative impact and taking their toll on the world economy and the demand for diamonds.
7. What do you think we should do to overcome these challenges?
Unfortunately we have an oversupply of polished diamonds while the demand worldwide is weakening. This imbalance has to be corrected by reducing and restricting the supply of additional rough onto the market.
We have to restore the consumers’ confidence and illusion, bring back the allure, uniqueness and the beauty of diamonds and engrave it into the minds of consumers.
To achieve that, we have to launch massive advertising and promotional campaigns to promote diamonds as unique store of value and a rare and durable object of beauty. to the synthetic diamonds. As long as there is full disclosure and transparency, synthetics have a place in the industry; people who can’t afford to buy diamonds will buy synthetic. It may chip away part of the business but if we know how to and brand it right, we can navigate our way back and overcome this challenge as well.
8. What is one thing that nobody knows about you?
Despite my occupation, and the blessed bounty surrounding me, I'm not at all materialistic. I like to play music, I like reading inspirational books and biographies of great leaders and appreciate learning and contemplation in science and medicine.
9. What would you do if you weren’t working in diamonds?
I would probably be either a doctor or a teacher.
Growing up I was a very sick child and throughout my younger years of illness I had accumulated a great deal of medical information. To this day I like to delve into science and medicine, especially understanding causes and symptoms of diseases and how to cure them.
I have always wanted to help people. I also discovered, as a child, that I had the ability to simplify and explain information to others in a way that they can understand and follow - an important quality for a teacher.
10. What did you learn about yourself while running your business?
I learned that if you want to pursue your dream and to achieve your goals, you have to have the 3Ps and the 3Ds as follows:
3Ps : Passion, Patience and Perseverance.
3Ds : Desire, Determination and Discipline.
Owner of : DEHRES
Located in: 3501, Edinburgh Tower, The Landmark, Central, Hong Kong
Married plus : 4 children
55 years in the diamond business
3rd generation in the diamond business