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Report Date : |
14.05.2012 |
IDENTIFICATION DETAILS
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Name : |
SHLOMO BICHACHI DIAMONDS LTD. |
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Registered Office : |
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Country : |
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Year of Establishment : |
1993 |
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Legal Form : |
Private Limited Liability Company |
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Line of Business : |
Importers, Manufacturers,
Polishers, Exporters and marketers
of wide range of diamonds, specializing in small fancy cut diamonds |
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No. of Employees : |
120 employees in the Group as of end of 2008 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2012
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Country Name |
Previous Rating (31.12.2011) |
Current Rating (31.03.2012) |
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Israel |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
SHLOMO BICHACHI DIAM
Telephone 972 3 613 36 20/ 1
Fax 972 3 613 13 42
P.O. Box 3354 (52136)
54 Bezalel Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 52521 ISRAEL
A private limited liability company, incorporated as per file No.
51-329000-7 on the 26.08.2002, continuing a business founded in 1993.
Authorized share capital NIS 39,100.00, divided into -
39,100 ordinary shares of NIS
1.00 each,
of which 100shares
amounting to NIS 100.00 were issued.
Subject is fully
owned by Shlomo Bichachi.
Shlomo Bichachi
Importers, manufacturers,
polishers, exporters and marketers of wide range of diamonds, specializing in
small fancy cut diamonds.
Exports are to
large jewelry businesses and chains in the USA, Hong Kong, etc.
Operating from
owned office premises, in 54 Bezalel Street (also known as 21 Tuval Street),
Diamond Exchange, 30th floor, Yahalom Bldg., Ramat Gan, and from
offices in L.A. and New York, U.S.A., Belgium and in Hong Kong.
Also was known to
be operating from 3 plants in Israel: Netanya, Tel Aviv and Petach Tikva, as
well as from subsidiary a plant in Thailand.
Having 120
employees in the Group as of end of 2008 (same as in 2007). Current number of
employees unavailable. According to a report from March 2011 there are some 200
employees in the plant in Taiwan.
Financial data not forthcoming, however said
to be of high volumes.
There is 1 charge for unlimited amounts registered on the company's
assets, in favor of Mizrahi Tefahot Bank Ltd.
· 2005 sales claimed to be US$ 20,000,000, of which US$ 14,000,000 were for export.
2006
sales claimed to be US$ 20,000,000, of which US$ 14,000,000 were for export.
2007
sales claimed to be US$ 35,000,000, of which US$ 28,000,000 were for export.
2008
sales claimed to be circa US$ 35,000,000, of which US$ 28,000,000 for export.
According to the report published by the
Israel Supervisor on Diamonds in the Ministry of Industry and Trade, in 2010
subject exported (polished diamonds) in volume of US$ 27,000,000 (actual
overall sales presumed to be higher, as there are local sales of polished
diamonds and may have sales of rough diamonds as well) .
Later sales figures not forthcoming.
OCTAGON, a subsidiary in Thailand, diamond
dealers, manufacturers, polishers and marketers.
Mizrahi Tefahot Bank Ltd., Diamond Exchange Business Center Branch (No.
466), Ramat Gan.
Nothing
unfavorable learned.
Despite our efforts, we were unable to speak with subject's General
Manager, Mr. Shlomo Bichachi, as he was always unavailable. We left messages
which so far remain unanswered.
Shlomo Bichachi is
veteran in the diamond business and enjoys good reputation in the branch.
According to the
report published by the Israel Supervisor on Diamonds in the Ministry of Industry
and Trade, subject was ranked 25th in the 2010 list of Israel's
largest polished diamonds exporters (the list publishes the top 25 diamond
firms; subject does not appear in 2011 list, which could be either that it
ranks lower, or alternatively is that subject chose not to be included in the
list, which is its right).
A recent affair of
an underground bank is shocking the local diamond branch in these days, after
in late January 2012 Police raided the Diamond Exchange (after a long
undercover operation, in cooperation with the Exchange officials), arrested
several individuals for investigation and blocked several bank accounts (which
led to a chain reaction of not respecting checks of dealers). The Police
suspect that a group of people, including diamond dealers, run an illegal bank
in the Diamond Exchange compound for loans, money transfer abroad and exchange
in volume of NIS 1 billion for several years. The affair has already led to
several of reported bankruptcies of local diamond firms, a decrease of up to
70% in transactions, frozen bank accounts, a paralysis (especially in purchase
of raw diamonds) with substantial fear of the a collapse of the sector, while
dealers –local and foreign- face uncertainty.
In early March
2012 the Police announced it suspends the investigation of further suspects for
the time being. This move is a result of the big pressure from the diamond
branch (to stop the continuing damage inflicted) and the Government (who is
losing US$ hundred millions from decrease in tax collection).
Despite the
slow-down in activity in the global diamond branch during the last third of
2011, export by the local diamond sector in all 2011 recorded US$ 7,202 million
sales in cut diamonds, 23.5% higher than in 2010. This was thanks to the strong
first 2 thirds of 2011, which were stalled in the last third, reflecting the
current fragile global economy and fear of another recession wave in USA and
Europe. It should be noted that in karat terms, net export of cut diamonds rose
only by 4% from 2010.
Export of rough
diamonds in 2011 also climbed almost 15%, reaching US$ 3,515 million (fell
almost 29% in karat terms).
Import of cut
diamonds in 2011 summed up to US$ 5,682 million, representing 34.7% increase
comparing to 2010 (18% rise in karat terms), while import of rough diamonds
rose by 17.5% from 2010, totaling US$ 4,413 million (11% fall in karat terms).
In 2010, export
(net) of cut diamonds was US$ 5,832 million (up 48% from 2009, when it noted
37% decrease from 2008), rough diamonds export (net) reached US$ 3,060 million
(62% rise from 2009). Import of rough diamonds (net) in 2010 grew by 51% to US$
3,755 compared with 2009, and import of polished diamonds (net) saw 68% rise in
2010 reaching US$ 4,218 million.
In terms of target
export (polished diamonds) countries, in 2011 the USA continued to be the main
destination, with 39% of total export (41% in 2011). This comes after in early
2010, for the first time Far East markets became Israel’s diamond industry’s
main target (traditionally sales to the USA comprised some 60%-65% of total
export). Hong Kong is the 2nd largest target country, comprising 26%
of sales in 2011 (29% in 2010). Other main target countries included
Switzerland (6%), India (5%), UK (3%) and the rest of the World (21%).
According to the
President of the Israeli Diamonds Association, local diamond sector in general
managed to cross one of worst depressions in the global diamond sector caused
by the global economic crisis in 2008/9. The sector experienced almost an
entire freeze and collapse in sales of about 70% in the peak of the crisis and
2009 export diamonds shrank by some 40%. The President said that trade in the
sector rolls annual turnover of US$ 25 billion while total debt to the banks
stands on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the crisis.
The Ministry for Industry & Trade also assisted the local diamond exporters
by providing bank guarantees in total scope of NIS 1 billion.
Local diamond
sector employs some 15,000 persons.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Notwithstanding the lack of updated data
from subject’s officials, considered good for trade engagements.
Note: Please note subject's correct P.O. Box 3854 (P.O. Box 290 is an
internal box of Yahalom Bldg).
DIAMOND INDUSTRY –
INDIA
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From time immemorial, India is well known in the world
as the birthplace for diamonds. It is difficult to trace the origin of
diamonds but history says that in the remote past, diamonds were mined only in
India. Diamond production in India can be traced back to almost 8th
Century B.C. India, in fact, remained undisputed leader till 18th
Century when Brazilian fields were discovered in 1725 followed by emergence of
S. Africa, Russia and Australia.
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The achievement of the Indian diamond industry was
possible only due to combination of the manufacturing skills of the Indian
workforce and the untiring and unflagging efforts of the Indian diamantaires,
supported by progressive Government policies.
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The area of study of family owned diamond businesses
derives its importance from the huge conglomerate of family run organizations
which operate in the diamond industry since many generations.
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Some of the basic traits of family run business
enterprises include spirit of entrepreneurship, mutual trust lowers transaction
costs, small, nimble and quick to react, information as a source of advantage
and philanthropy.
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Family owned diamond businesses need to improve on
many fronts including higher standard of corporate governance, long-term
performance – focused strategies, modern management and technology.
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The diamond jewellery industry in India today may be
more than Rs 60000 mil and is rated amongst the fastest growing in the
world. Indi ranks third in the world in domestic diamond consumption.
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Utmost caution is to be exercised while dealing with
some medium and large diamond traders which are usually engaged in fictitious
import – export, inter-company transactions, financially assisted by banks. In
the process, several public sector banks lost several hundred million rupees.
They mostly diverted borrowed money for diamond business into real estate and
capital markets.
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Excerpts from Times of India dated 30th
October 2010 is as under –
DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT
This could be the biggest credibility crisis
the Indian diamond industry has ever faced. Fifteen banks run the risk of
losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two
months ago, they had not repaid these dues. Bankers believe many
diamantaires borrowed money during the economic downturn two years ago and
diverted funds to businesses like real estate and capital markets. Many of
themselves made money from these businesses but their diamond companies have
gone sick and declared insolvency.
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Most of the money borrowed from the banks in the name
of their diamond business has been diverted in real estate and the share
market. The banks are not in a position to seize their properties because in
many cases, these were purchased in the name of their relatives and friends.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.53.64 |
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UK Pound |
1 |
Rs.86.42 |
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Euro |
1 |
Rs.69.29 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NB |
New Business |
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This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.