Presidents’ Meet Discusses Industry Future

Chief industry concerns like industry financing and falling profitability, overgrading, synthetic stones, generic marketing and other subjects centered the discussions at the recently concluded biennial Presidents’ Meeting World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA) at the Tel Aviv Hilton Hotel in Israel. Hosted by Israel Diamond Exchange (IDE) and the IDMA, the meeting was held during 14-16 June 2015. It is the second time a Presidents' Meeting is being held in Israel.

During the afternoon session of the first day of the June 14-16 meeting, the GIA’s Vice President and Chief Laboratory and Research Officer Tom Moses provided the presidents of the WFDB and of the IDMA with an update on the lab’s work. This was followed by the opening of a new exhibition at the Harry Oppenheimer Diamond Museum in Ramat Gan called ‘Diamonds On 45’. WFDB President Ernest Blom told at the opening event that the Museum was keeping diamonds in the public eye with exhibits that were relevant to the general public and would attract visitors to the Museum to learn about the process of diamonds, from mine to retail store. Prior to the opening session, the WFDB Trade Promotion Committee meeting heard a report of the progress made by the World Diamond Mark Foundation (WDMF) by WDMF Chairman Alex Popov. In addition, WDMF Program Director Krisztina Kalman- Schueler gave a presentation of future projects that include consumer oriented diamond fashion shows and exhibitions in larger markets, such as the United States.

During the opening event of the morning session on June 14, 2015, third edition of World Diamond Mark (WDM) Generic Marketing Think Tank discussed progress so far by the body and ideas for how it can progress further. IDMA President Maxim Shkadov and Secretary General Ronnie Vander Linden stressed on the need to put the hard facts on the table as IDMA’s members are struggling for survival. “Due to the ever changing conditions, the seesawing of the industry’s — and our members’ – performance, the future of global diamond manufacturing is in the balance,” IDMA President Maxim Shkadov stated.

“The manufacturers are those who carry the largest and most significant burden of the diamond pipeline - a burden that particularly during the past years has put diamond manufacturers in each and every country where diamonds are cut and polished at risk. No matter where diamonds are cut, we are experiencing unendurable pressure from all the market’s segments and players,” Shkadov added. Maxim Shkadov was speaking during Think Tank meeting about generic diamond promotion and advertising to consumers.

IDMA Secretary General Ronnie Vander Linden pointed at the dwindling number of IDMA members. "We are about to lose Namibia and the jury is still out on Canada. In Sri Lanka, diamonds factories have been closing and it is putting the Sri Lanka Diamond Manufacturers sustenance in jeopardy. All this is a direct outcome of the precarious state of our industry. This is not only worrying, it is potential disastrous," Vander Linden said. IDMA will welcome members from Armenia, Belgium, Botswana, China, Germany, India, Israel, the Netherlands, Russia, South Africa, Sri Lanka, Thailand and the USA to the 2015 Presidents Meeting in Tel Aviv.

At the opening session of the Presidents’ Meeting, Israel Diamond Exchange President, Shmuel Schnitzer, spoke of the importance of solving the current hurdles which have a macro impact on the global diamond industry, by citing a micro view of what is currently being faced by the Israel diamond industry.

He touched upon three key topics – profitability, finance and transparency and the price list. Profitability, according to him, ‘is a difficult, painful problem that runs like a thread through all the diamond centers in the world. We have to sound the alert. We must find a solution to the industry's problem of profitability.’ Obtaining finance was one key subject he touched upon. He mentioned that ‘as a result of the changing regulations, including Basel II and III, and as a result of the AML laws, which are making very strict order in the economy, the global banking industry has changed its attitude to the diamond industry. This change is making it hard for diamantaires to obtain credit, regardless of their economic and business situation. We are certain that this attitude is totally unjustified. Our industry is becoming increasingly transparent by the day. So the opposite is true - I think that the time has definitely come for more banks and non-banking financial institutions to join in financing the diamond industry’.

Other speakers at the opening session included Maxim Shkadov, the president of IDMA; Jacob Korn, the president of the Israel Diamond Manufacturers Association (IsDMA), Dr. Gaetano Cavalieri, president of CIBJO; Vipul Shah, chairman of the Gem & Jewelry Export Promotion Council and Onkokame Kitso Mokaila, the minister of minerals, energy and water resources of the Republic of Botswana.

On Day 2 of the meeting, WFDB President Ernie Blom spoke about the development over the past year. Blom told the presidents that although the industry was facing many challenges, the WFDB, was always ready to accept responsibility for dealing with difficult issues. He further said that WFDB would be soon announcing a new Executive Director, who will be driving forward the WFDB agenda and make it even more dynamic force in the global diamond trade. Blom said the WFDB continues to hold meetings with banks, producers and labs in order to maintain strong relations. He told members of the concerns of the banks regarding the diamond trade and the specific issues that the banks would like to see dealt with, such as unqualified reports, price discovery, pre-post delivery and mitigation risk.

He also spoke about the different types of WFDB membership categories available, since the body is keen to expand its membership beyond purely bourse members. In addition to bourses, there is a national category for states to join, and associated members in which category India’s Gems and Jewellery Export Promotion Council and ABN Amro Bank have joined the WFDB.

About Presidents’ Meeting
During the two-and-a-halfday event, the leaders of the 30 diamond bourses affiliated to the WFDB, and IDMA’s 16 member organisations discussed the most pressing issues affecting the global diamond industry.

They were joined by an exclusive group of invited guests, mostly representatives of the major rough producers; companies and entities that provide crucial services to the industry, such as banks and other financing institutions; insurers; logistics, security and technology providers; governmental and nongovernmental organizations and other industry interest groups.

Instituted in the early 1980s, Presidents’ Meetings take place every two years, with the full World Diamond Congress held in the intervening years. Originally, the scope of the Presidents’ Meetings was more limited in size and attendance, but over the years, the need to meet and discuss crucial issues grew, and with that the range and number of participants in Presidents’ Meetings.