(IDEX Online News) – Ahead of the World Diamond Congress in Dubai, IDEX Deputy-Editor David Brummer caught up with World Federation of Diamond Bourses president Ernie Blom to ask about issues concerning the diamond industry.

 

David Brummer: The three main themes of the World Diamond Congress are Transparency, Responsibility and Sustainability – how will the Congress focus on these? Is the further reduction of the use of conflict diamonds and closer cooperation with the World Diamond Council, for example, one of the ways that the above issues will be tackled?

World Federation of Diamond Bourses: These themes seek to address all the challenges facing the global diamond industry. These include a lack of financing and declining profitability, the issue of overgrading of diamonds, generic marketing of diamond jewellery, and the undisclosed mixing of synthetic diamonds with natural mined goods. We believe these overarching themes cover the issues that the industry faces and sets the stage for a wide-ranging debate at the World Diamond Congress in Dubai in May. We have a strong and ongoing relationship with the WDC and are in full agreement on the need to ensure that conflict diamonds are excluded from global trade. Clearly, transparent and responsible trading applies to the challenge of dealing with the threat of conflict diamonds.

 

DB: What will be the WFDB’s role in monitoring/advising on those three pillars?

WFDB: The WFDB is taking the initiative in leading the global diamond sector. Our aim is to be the 'go to' voice for the industry. As a result, we believe that creating a debate on the themes we have declared creates the conditions needed for businesses across the world to work to the highest business and ethical levels.

 

DB: Many industry members say that generic diamond promotion and marketing are key to help diamonds regain some of their lost ground to other luxury goods – what plans are in place to facilitate that?

WFDB: There is no doubt that generic marketing of diamond jewellery is critical since the industry has not been doing this in a unified way for almost a decade. We are inviting key speakers to address the congress on precisely this issue.

 

DB: How will the World Diamond Mark Foundation and the Diamond Producers Association be able to work more closely?

WFDB: The WFDB launched the World Diamond Mark three years ago which has made tremendous progress in spreading consumer awareness of diamond jewellery and helping retailers to sell more in some key areas. The WFDB is in communication with the Diamond Producers Association on an ongoing basis. We believe the DPA is going to play a huge role in generic marketing and that working together with the WFDB can complement its activities. This is such a huge task that no single body can succeed alone. There has to be industry-wide cooperation and we are aiming to bring this about.

One important aim will be to attract the so-called Millennials, 18-35-year-olds who prefer items such as smartphones and other electronic gadgets and so-called “experiential” activities, such as a vacation to an unusual destination. How do we reach out to Millennials? We need to be talking their language and that is one area we will be focussing on.

DB: The 2015 Presidents’ Meeting ended with many serious concerns about issues within the diamond industry – particularly lack of profitability, banking and finance and the lack of liquidity, lab-grown diamonds and over-grading. Many of these still seem to be ongoing concerns, how will the Congress address them?

EB: The WFDB is the world's largest diamond industry body, with 30 affiliated bourses and around 20,000 members of those exchanges dealing in around 95 percent of the diamonds traded worldwide. We have excellent relationships with other stakeholders, including banks, producers, labs and others, and we will be welcoming them to the World Diamond Congress. In addition to speeches where the different bodies will put forward their points of view, there will also be panel discussions and the opportunity for networking and a large number of informal meetings where our positions will be strongly set out. The Congress aims, together with our colleagues from the International Diamond Manufacturers Association, to hold an all-enveloping debate on the main challenges facing our members and to set a path for them to follow which we believe will best aid them.

 

DB: There were divisions/discrepancies between what producers thought was necessary to maintain balance throughout the diamond pipeline, and the experience of diamantaires and manufacturers in the mid-stream. Has this relationship become more balanced in 2016?

EB: The second half of last year saw a realistic calibration of rough prices. The producers realised that prices were simply not viable and that an industry where manufacturers could not produce polished goods at a profit was creating extreme imbalance. We are encouraged to see large amounts of rough diamonds bought in the first quarter of this year as manufacturers have replenished inventories. I hope the lesson has been learned that irresponsible buying can only serve to work against the interests of the midstream.

 

DB: Can you provide short- to medium-term predictions/expectations of what will happen in your part of the diamond pipeline in 2016?

EB: I have been involved in the diamond industry for more than 40 years. In that time, I have seen many ups and downs. The thing that always gives me great hope and optimism is that the industry has always bounced back from declines which are a natural part of the business cycle. I cannot predict what might happen – best or worst case (although I am encouraged by sentiment in the first quarter) – but I do know that we are all fortunate to be working in an industry which produces such beautiful items of diamond jewellery. Not only that, but the diamonds we manufacture and in which we trade signify the most beautiful and noble human sentiments: love, long-lasting relationships and commitment.

 

DB: Stuller Inc recently announced its intention to add lab-grown diamonds to its product mix, do you think more retailers will take that choice?

EB: I cannot forecast what retailers will do, but I would just reiterate that the WFDB has no problem in principle with synthetics. Our only issue is that they are fully disclosed. Consumers can decide for themselves if they want a diamond grown in a lab last year, or a natural, mined diamond whose journey took it from deep in the earth to their ring, bracelet or necklace over the course of several billion years. I believe diamonds have a story to tell, and natural, mined diamonds have a wonderful story.