Antwerp Diamond Symposium responds to global financial crisis
By Tom Wildhern
ANTWERP, November 23, 2008 – It is rare to use the word historic for a gathering, but the word could arguably be applied to the November 17, 2008, Antwerp Diamond Symposium, which responded in good measure to the industry’s demands for guidance and solutions to tackle the impact of the world financial crisis.
The big producers, De Beers Group and Alrosa, both pledged supply cuts – in Alrosa’s case, by up to 40 percent – and calls were made for the creation of a new industry body to market diamonds and diamond jewellery.
It was a concerted effort to face up to the challenges on both the supply and demand sides in the face of softening diamond prices and a tightening of credit to a highly leveraged trade.
De Beers Group have said they would cut supply in line with the prevailing demand and introduce smaller, more focused Sights, and Alrosa’s president Sergey Vybornov made a spirited pledge at the symposium to reduce supply that was met with an equally lively round of applause from delegates.
Avi Paz, head of the World Federation of Diamond Bourses (WFDB), took the initiative on the demand side by calling for a new promotional body for diamonds.
“We should use every possibility to communicate that now is a good time to buy diamonds,” he told delegates.
Gareth Penny, MD of the De Beers Group, said he hoped an effective new industry body could be up and running in 2009. De Beers reinforced the marketing initiative by announcing plans to double their media budget in the United States for Q4, 2008. De Beers’ “Fewer, Better Things” campaign is a well-focused strategy built around a woman’s preference for a single special gift rather than several, smaller gifts.
The severity of the problems facing the diamond industry was underlined by Freddy Hanard, CEO of the Antwerp World Diamond Centre (AWDC), organiser of the event, who said: “Today we are facing a universal challenge. We cannot afford to underestimate the crisis we are facing.”
The event had initially been billed as a conference focused on marketing, then was postponed, and finally was reinstated as a symposium, in response to industry leaders’ calls to face up to the economic crisis and lay out the path forward to deal with it.
“The first step that we must take is to share knowledge,” Hanard said.
It is expected that another symposium will take place in Antwerp, possibly in the spring of 2009, to follow up this event.
Delegates received reassurances from leading diamond bankers that the banking industry would continue to provide credit lines.
But the bankers warned that the trade needed to maintain self-discipline and prudence and have sound business plans. They were not in the mood to support proposals to build inventory.