Diamond Conference Mines to Market Concludes

Mines to Market 2017
Chaim making concluding remarks

Mumbai: The two-day long International Diamond Conference Mines to Market organised by The Gem & Jewellery Export Promotion Council (GJEPC) as part of its 50th anniversary celebrations concluded in Mumbai on Monday after intense discussions spanning an extensive spectrum of issues related to the different stages of the pipeline.

Summing up the two-day event, which included a Gala Dinner addressed through video-conferencing by the Hon’ble Prime Minister of India Shri Narendra Modi, the chief moderator of the conference Chaim Evan Zohar said that at the end of the deliberations there was much greater clarity on many of the issues that the industry has to address.

Evan-Zohar also pointed out that a key takeaway was the Indian industry had an excellent relationship with the government and this support would be invaluable in addressing current challenges. The conference also fostered interaction between the producers, the manufacturers and other sections of the pipeline and would ensure better understanding in building cooperation to steer the industry forward. Key concerns like profitablity in manufacturing, detection of synthetics and valuation were analysed and the path forward on many of these fronts was clearly presented.

Deliberations had begun in the morning with a panel of speakers including Ghanshyam Dholakia, Stephane Fischler, Mavjibhai Patel and Sanjay Kothari discussing the proposition put forward by moderator Evan-Zohar that the mid-stream has been squeezed from all sides. Various interesting perspectives were put forward (see separate report ‘Tackling the Challenges in the Mid-stream’) before the panel concluded that what was needed was a clear plan and a professional approach to implementing it.

The highlight of the session on Marketing that followed was a presentation by DPA CEO Jean-Marc Lieberherr and the lively discussion that followed on the importance and role of generic marketing. But before that there was also an insightful presentation by Oded Edelman of James Allen.com which provided a peep into how cutting edge technology for diamond imaging and virtual reality was transforming the online experience while reaching out to the millennial generation. The third speaker, Mr Ahamed of Malabar Gold, presented the views of the brick and mortar retail and said that the touch and feel factor was so important that offline retail would always continue to be important. Moderator Rajiv P Mehta raised some thought provoking questions on size and impact of marketing budgets and whether the industry was investing enough in promotion.

The last segment of the morning session was addressed by the bankers – Biju Patnaik of IndusInd, P.N. Prasad of SBI and Kurt Looyens of ABN AMRO, and Linus Koh of the Singapore Diamond Exchange. The latter explained how the concept of the exchange was opening out new possibilities in the realm of transparency and easier accessibility to finance, and emphasised that the industry should realise that diamonds need to be also promoted as a safe and attractive investment. The three bankers addressed issues related to the bankability of the industry and the amount of finance available given that some of the older banks have left the sector. They were unanimous that the a degree of confidence was returning. Patnaik said that many finance options existed in the Indian market, but called on industry players to move towards greater transparency in accounting with audited balance sheets etc. The panel also agreed that corporatisation was not an essential requirement as a professionally run proprietorship could also secure finance if it was implementing a viable business strategy. The quality of assets should also be presented in a fair and transparent manner, they felt.

Moderators Praveenshankar Pandya and Chaim Evan-Zohar raised a few pertinent questions on the levels of finance available such as it there too much or too little finance; why small manufacturers find it more difficult to secure credit; transaction costs especially because of the ECGC requirement by the public sector banks etc. The panel agreed that while there was adequate finance for the industry as a whole, there were no special schemes for the MSME sector and these were issues that needed to be addressed.

Following a dramatic presentation by Martin Rapaport on the State of the Diamond Industry, the session on Diamond Valuation, an issue currently being discussed by the Kimberley Process took place. Moderated by Mark Van Bockstael, it had Feriel Zarouki of De Beers, Mr. Maurice of DRC and Sabyasachi Ray, ED, GJEPC as speakers. After Van Bockstael gave an overview of the discussions within the KP, and said that it was being discussed from 2002 onwards, the issue was addressed from the viewpoint of the producing country governments, with Maurice stressing the need to ensure fair value to producers to maximise beneficiation and boost development, as well as from that of the producer companies by Zarouki who said value needs to be determined by costs incurred and the saleability of the stones, and any attempt to standardise valuation could lead to commoditisation and a loss of the emotional value attached to diamonds.

Speaking from the perspective of the manufacturers, Ray said that given the country’s position in the value chain it could see that there was a validity in both the social perspective presented by producer countries and the commercial perspective of the mining companies. Other countries may wish to address the issue so as to ensure adequate revenue through taxes. Hence it may not be easy to reach a single consensus opinion across the value chain.

The final session was devoted to the question of Certification which has gained in importance following cases of illegal mixing of natural and synthetic diamonds. The panellists, including Tom Moses of GIA, Ans Anthonis of HRD and Debbie Azar and Mark Gershburg of GSI, made brief presentations on their labs, on grading and testing machines and certification and said they were keen to work in close co-operation with the trade to prevent the contamination of the natural diamond pipeline by unscrupulous mixing.

Following the summing up by Evan-Zoha, GJEPC’s Diamond Panel Committee convener proposed a Vote of Thanks.