After one of the most difficult years the diamond industry has ever known, 2010 is likely to be a year of growth, however the sector needs to understand that there is now a “new normal” in the global economy. That was message conveyed by speakers at the 2009 Antwerp Diamond Symposium on November 16, organised by the Antwerp World Diamond Centre (AWDC).
The second annual Antwerp Diamond Symposium was opened by AWDC CEO Freddy J. Hanard who said the diamond trade’s stakeholders came together last year, to discuss a strategy in times of financial insecurity. Thanks to the decisions taken during the first diamond symposium, new strategic lines came about. Antwerp is not only a trading place, but also a meeting place for diamond dialogue. He said another symposium was needed because of changing world conditions.
In 2010, said moderator Chaim Even-Zohar and economist Pranay Narvekar, the retail market would post a 0.4 percent rise. However, because of destocking in the pipeline that has taken place this year, the modest increase in retail sales will result in a 25 percent increase in polished sales in cutting centres to $17.1 billion. Recovery is underway, but it will be slow.
“The gravity of the issues facing us should not scare us,” Hanard said. "If we act proactively we will succeed. We have the destiny of the industry in our hands. Are we looking for answers, results and predictions? We will not solve all of the problems today, but we can get an insight into how we can go forward. I do not doubt that the different messages carried out through this symposium, will be put into practice in coming months.”
Despite the very difficult conditions experienced by the industry over the past 18 months, the number of business failures that occurred over the period did not exceed the rate expected in a non-recession year, symposium participants were told. This relative sense of stability was credited to a readiness on the part of diamantaires to inject personal equity into their companies. In addition, speakers said, the stability was the result of the policies of the mining companies which cut production and suspended sales during the first part of the year, and the banks which maintained the general level of credit they extend to the diamond industry.
Representatives of the banks and the mining companies who addressed the symposium expressed their continued support for the industry. Alrosa Vice President Sergei Ulin earned the warm applause of the symposium audience when he declared that, despite the difficult economic circumstances, the Russian authorities had no intention of flooding the market with rough diamonds in effort to turn a quick profit. General concern was expressed at the 30 percent increase in the price of rough diamonds that has been witnessed over the past six months, during a period in which no corresponding increase has been reported in the average price of polished diamonds. To maintain its recovery, symposium participants were warned, it is important not to create another speculative price bubble.
A key speech to the symposium was delivered by Thomas Leysen, Chairman of the Belgian Federation of Enterprises. He provided the perspective of a business leader from outside the diamond sector. “During my travels abroad as part of state delegations, we see that the diamond industry provides Belgium with both glamour and importance,” he said. “It is a calling card for our country and its image. Antwerp has weathered the crisis well, in part through the diversification of markets. The results will take time to come to fruition, but it is heartening to see that the process has started.”
A detailed report on the Antwerp Diamond Symposium will be posted on the website www.awdc.be later on.
