MIRA INFORM REPORT
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Report No. : |
333074 |
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Report Date : |
22.07.2015 |
IDENTIFICATION DETAILS
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Name : |
KUPERMAN BROTHERS DIAMONDS LTD. |
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Registered Office : |
1 Jabotinsky Street, Diamond Exchange, Macabbi Bldg., Ramat Gan 5252001 |
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Country : |
Israel |
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Date of Incorporation : |
28.08.2002 |
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Com. Reg. No.: |
51-329231-8 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers, traders, polishers, exporters and marketers of wide range of diamonds, from small to 3 karat diamonds. |
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No of Employees : |
16 |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Unknown |
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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 31, 2015
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Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
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Israel |
A2 |
B1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderate Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderate High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
ISRAEL ECONOMIC OVERVIEW
Israel has a technologically advanced market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among the leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are covered by tourism and other service exports, as well as significant foreign investment inflows. Between 2004 and 2013, growth averaged nearly 5% per year, led by exports. The global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals, following years of prudent fiscal policy and a resilient banking sector. Israel's economy also has weathered the Arab Spring because strong trade ties outside the Middle East have insulated the economy from spillover effects. Slowing demand domestically and internationally and reduced investment due to uncertainties caused by the Gaza conflict in summer 2014 have reduced GDP growth to about 2% during 2014. Natural gas fields discovered off Israel's coast since 2009 have brightened Israel's energy security outlook. The Tamar and Leviathan fields were some of the world's largest offshore natural gas finds this past decade. The massive Leviathan field is expected to come online no sooner than 2017, but production from Tamar provided a one percentage point boost to Israel's GDP in 2013 and a 0.5% boost in 2014. In mid-2011, public protests arose around income inequality and rising housing and commodity prices. Israel's income inequality and poverty rates are among the highest of OECD countries and there is a broad perception among the public that a small number of "tycoons" have a cartel-like grip over the major parts of the economy. The government formed committees and has started splitting up the oligopolies to address some of the grievances but has maintained that it will not engage in deficit spending to satisfy populist demands. Over the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only 9% of the workforce, with the rest employed in manufacturing and services - sectors which face downward wage pressures from global competition.
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Source
: CIA |
Company
name & address
KUPERMAN BROTHERS
DIAMONDS LTD.
Telephone 972
3 575 20 17/ 8
Fax 972
3 575 02 33
Email: il@kupermanbros.com
1 Jabotinsky
Street
Diamond Exchange,
Macabbi Bldg.
RAMAT GAN
5252001 ISRAEL
HISTORY
& LEGAL FORMATION
A private limited company, incorporated as per file No. 51-329231-8 on
the 28.08.2002.
Subject is succeeding business activities originally founded by Shlomo
Kuperman in 1963 (during that time for many years until 2002, also operated
under a general partnership called KUPERMAN BROTHERS, established 1979).
SHARE
CAPITAL
Authorized share capital NIS 100,000.00,
divided into –
20 management shares (2 shares
issued),
99,980 ordinary shares (200 shares
issued), all of NIS 1.00 each,
of which shares amounting to NIS 202.00 were
issued.
SHAREHOLDERS
1. Shlomo Kuperman, 50%,
2. Ehud (Udi) Kuperman, 50%,
brother of Shlomo.
DIRECTORS
1. Shlomo Kuperman,
2. Ehud (Udi) Kuperman.
JOINT
GENERAL MANAGERS
1. Shlomo Kuperman,
2. Ehud (Udi) Kuperman,
3. Yaniv Radia.
BUSINESS
Importers,
traders, polishers, exporters and marketers of wide range of diamonds, from small
to 3 karat diamonds.
60% of sales are
for export.
Most purchasing is
from import.
Operating from
office premises, owned by the shareholders, on an area of 150 sq. meters, in 1
Jabotinsky Street, Diamond Exchange (3rd floor, Room 336), Macabbi
Bldg., Ramat Gan, and from branches in New York, London, Belgium and Hong Kong.
Having 16
employees in Israel (had 17 employees in 2013), and further several employees
serving in the branches abroad.
MEANS
Financial data not forthcoming, however known to be financially solid.
There are 6 charges for unlimited amounts registered on the company's assets, in favor of Union Bank of Israel Ltd. (charges were placed in 2002 – 2014).
REVENUES
Sales details as informed to us by subject's officials in the past:
2007 sales claimed to be US$ 70,000,000, of which US$ 50,000,000 for export.
2008 sales claimed to be circa US$ 60,000,000, of which US$ 50,000,000 were for export.
2009 sales claimed to be circa US$ 48,000,000, of which US$ 42,000,000 were for export.
First 9 months of 2010 sales claimed to be US$ 41,000,000, of which
US$ 36,000,000 were for export.
Subject's officials refused to disclose later sales figures.
According to the data published by the Israel Supervisor on Diamonds in the Ministry of Industry & Trade, net export of polished diamonds by subject (actual overall sales presumed to be higher, as there are local sales of polished diamonds and may have sales of rough diamonds as well), were as follows:
2010 sales for export (net) were US$ 49,841,454.
2011 sales for export (net) were around US$ 57,000,000.
2012 sales data unavailable.
2013 sales for export (net) were US$ 63,517,850.
2014 sales for export (net) were US$ 36,673,634.
OTHER
COMPANIES
KUPERMAN BROS DIAMONDS USA INC., USA
KUPERMAN BROS DIAMONDS (U.K.) LIMITED, UK,
KUPERMAN BROTHERS DIAMONDS (HK) LIMITED, Hong Kong.
BANKERS
Union Bank of Israel Ltd., Ramat Gan Branch (No. 062), Ramat Gan,
account No. 93710/17.
A check with the
Central Banks' database did not reveal any negative information regarding
subject's a/m account.
CHARACTER
AND REPUTATION
Nothing
unfavorable learned.
Subject's
officials refused to update financial data.
This is a veteran
family diamond business, enjoying good reputation in the branch.
According to the
report published by the Israel Supervisor on Diamonds in the Ministry of
Economics, subject was ranked 17th in the 2014 list of Israel's
top-20 largest polished diamonds exporters, 12th in the 2013 list,
ranked 17th in the 2011 list (did not appear in the 2012 list), 13th
in 2010 list.
It should be noted
that it is to the own company's discretion whether it would like to appear in
the list, meaning there are larger diamond exporters that chose not to appear
in the lists for their own motives (hence in 2012 either subject chose not to
appear, or it did not make the list in terms of exports).
Israel's diamond
industry continued the growth trend in all trade parameters in 2014, after the impressive
growth in 2013 in most parameters, based on the data by Israel's Diamond
Administration (IDA) at the Ministry of Economics: Net export of polished
diamonds rose by 0.6% from 2013, reaching US$6.269 billion (after rising 11.6%
in 2013), and net rough diamond exports totaled US$3.061 billion in 2014, up
4.2% from 2013 (after a mere rise in 2013). The market has been volatile over
the last years after experiencing its worst depression due to the global
economic crisis, then recovered in 2010 but fell again in 2012. The recovery in
2013 and 2014 is positive news for the local branch (still away from its peak
on the eve of the crisis with export of polished diamonds of US$ 7 billion),
however it is reported that profit margins have been decreasing due to smaller
gaps between rough and polished diamond prices (leading the diamond dealers to
search for new rough sources in hope to decrease costs). Overall, IDA reports
that 2014 was tough year for the diamond industry in Israel and globally.
Net imports of
polished diamonds in 2014 totaled US$4.514 billion, and net import of rough
diamonds totaled US$ 4.022 billion, marking 4.8% and 0.8% increase from 2013,
respectively (in 2013 import was in similar levels to 2012).
The United States
continued to be Israel’s major market for polished diamonds, accounting for
30.8% of the market in 2014 (37% in 2013). Hong Kong is the next largest market
with 29.7% of exports (27% in 2013), with Belgium 8.5%, Switzerland 6.5%, and
U.K. accounting for 3.7% of Israel's polished diamond export.
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local
diamond sector rolled annual turnover of US$ 25 billion while total debt to the
banks stood on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the
global crisis.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Local diamond
sector employs some 20,000 persons.
An affair of an
underground bank shocked the local diamond branch, after in late January 2012
Police raided the Diamond Exchange (after a long undercover operation),
arrested several individuals for investigation, caught diamonds and various
assets worth NIS millions, and blocked several bank accounts. It is suspected
that a group of people, including diamond dealers, run an illegal bank in the
Diamond Exchange compound for loans, money transfer abroad based on fictitious
transactions and exchange in volume of NIS 1 billion for several years.
The affair led to
several of reported bankruptcies of local diamond firms, a decrease of up to
70% in transactions in 2012, frozen bank accounts, and for a while to paralysis
(especially in purchase of raw diamonds) due to uncertainty among local and
foreign dealers.
In March 2012 the
Police decided to lower the profile of the investigation for a while 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). In November 2012 the Police and Tax Authorities recommended
on indictments against the 25 suspects in the affair, among them diamond
dealers, for the said suspicions and obstruction of the investigation.
In June 2013 it
was reported that the Police resumed its raids on the diamonds branch, and
although names of suspects were not released, sources said that it is also
related to the above underground bank affair. In parallel, it is also reported
that the Tax Authorities and diamonds dealers' representatives are trying to
reach an arrangement for past debts.
In July 2014 3
indictments were filed to the Tel Aviv District Court against central
defendants in the affair, who provided foreign currency services to the
"underground bank" (not against diamond dealers at this stage), for
felonies of money laundering and tax evasion in volumes of US$ millions.
SUMMARY
Notwithstanding the refusal to update sales
figures, considered good for trade engagements.
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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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 –
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Gem & Jewellery Export Promotion Council in its
statistical data has shown the export of polished diamonds to have increase by
28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in
February, 2012, India exported $ 1.84 billion worth of polished diamonds in February
2013. A senior executive of GJEPC said, “Export of cut and polished diamonds
started falling month-wise after the imposition of 2 % of import duty on the
polished diamonds. But February, 2013 has given a new ray of hope to the
industry as the export of polished diamonds has actually increased by 28 %. It
means the industry is on the track of recovery and round tripping of
diamonds has stopped completely.” Demand has started coming from the US, the
UK, Japan and China. India’s polished diamond export is expected to cross $ 21
bn in 2013-14.
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The banking sector has started exercising restraint
while following prudent risk management norms when lending money to gems and
jewellery sector. This follows the implementation of Basel III accord – a
global voluntary regulatory standard on bank capital adequacy, stress testing
and market liquidity.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs. 63.65 |
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1 |
Rs. 99.14 |
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Euro |
1 |
Rs. 68.91 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
ASH |
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.