DW Special: Liquidity is the biggest challenge - De Beers

Diamond World spoke to Nigel Simson (Senior Vice President of Sightholder Sales) and Paul Rowley (Executive Vice President of De Beers Global Sightholder Sales) on New Sight Holder contract for the 2015-2018 period, opportunities in the Indian industry, industry performance and 2014, 2015 global industry outlook and rough & polish.

On the New Sight Holder contract for the 2015-2018 they shared, “We are currently working on the three year supply contract for sightholders in consultation with the customers and trying to redefine on how to move forward for the selection. The major key things that the industry facing right now is : Liquidity issue, banks focus on more transparency and industry facing issues to access the required liquidity, funds for investment like investing in infrastructure, marketing, manufacturing and more. Hence our major focus this time is related to the financial components.”

For fully authorised accounts, they added, “We have consolidated group structure, the debt-equity ratio will be around 70:30, and so it comes to a threshold. The accounts will be checked by qualified auditors provided by the De Beers group auditors. We have kept the transition time for restructuring till 2017 for customers. In all the diamond industry needs to have more financial transparency.”

The polish prices are down in the last one year and market is slow. But rough prices are very strong, on that they said, “Polished prices were positive, but there is a lack between polish and rough. Nevertheless we will see the prices coming back to line soon.”

Coming to the year 2014, “The start was slow, but moving towards Diwali and Indian New Year, it went well and we are positive for the Christmas season. The end of the year will set a good platform for 2015; also we are looking forward to the Chinese New Year immediately and hoping for a positive 2015.”

Talking about the Indian market, “The biggest challenge that Indian diamond industry is facing right now is liquidity issues but our customers are strongly dealing with it. The brighter side is that the new government has brought in a lot of positivity in the market, the stock market is good, the gold price going down, gold sales going good, we have confidence in the economy and hoping for the diamond industry to also go up.”