For the Betterment of the Diamond Industry

Transparency, better marketing techniques, India gaining back its strength in the mining sector were a few issues discussed at the Mines to Market conference amongst many others, reports Diamond World.

The Gem and Jewellery Export Promotion Council (GJEPC) celebrated its 50th anniversary in Mumbai at the Grand Hyatt Hotel. The ‘Mines to Market’ conference which took place on 19th and 20th March was riveting with industry experts from all over the world talking about the various road blocks that are plaguing the industry and how mine companies and Transparency, better marketing techniques, India gaining back its strength in the mining sector were a few issues discussed at the Mines to Market conference amongst many others, reports Diamond World. diamantaires can work together to make the industry more lucrative.

Inauguration
The session began by an opening address by Mr. Praveenshankar Pandya, Chairman, GJEPC. He spoke about all the issues and key areas that the 2-day conference will address. He also thanked Belgium for its unconditional support to India and its contribution towards the growth of the diamond industry in the country.

Praising Shri Goyal’s energetic and involved approach Pandya recalled the time he had extended his help to the gems and jewellery industry to solve the excise issue. “Finding new diamond mines is always very difficult and we look forward to your support to explore the opportunities in India. Our country has a lot of deposits, and a few years back, Rio Tinto had found a viable deposit in Bunder in Chattisgarh. However, the project was embroiled in several issues, including legalones, which led Rio Tinto exiting Bunder and gifting the project to the Chhattisgarh government. We urge you to use your good offices to take this project forward,” he said.

His address was followed by an inspirational speech by Mr Walter K Chidhakwa, Minister of Mines and Mining Development, Zimbabwe. In an emotional address, he said, “Africa has been a producer of diamonds and other precious minerals for hundreds of years and 60 % of the world’s diamond resources come from Africa. While this is critical for the economic development of Africa, it is high time that Belgium extends the same support it shows to India and that India in turn helps Africa.”

Mr Piyush Goyal, Minister for Power, Coal and Renewable Energy & Mines said that India has had a long history with diamonds, even in mythology diamonds have played an important role. He said that the industry needs to look beyond just manufacturing and concentrate on mining. “Exploration doesn’t cost much. Why can’t we be the leaders when it comes to producing diamonds? Developed countries like Europe and the US need to be more supportive towards developing nations. Sending a few hundred solar lamps to a poor village in Africa won’t cut it,” he said. He concluded saying, “We don’t want to say we ran out of diamonds in the 18th century, but that in India, diamonds are forever.”

Russell Mehta, CEO Rosy Blue & Vice Chairman GJEPC said that diamond industry is the original Make in India industry. He said that the industry has grown from a mere 17 million in 1965 to a whopping 17 billion in 2016. He warned the industry about the volatility in the market because of the entry of synthetics. He insisted that being transparent and adopting non corrupt practices is the only means to further development.

Survival in the Absence of Growth
Members for this session included Mavjibhai Patel, Managing Director, Kiran Gems. Pvt. Ltd.; Stephane Fischler, President, AWDC; Ernest Blom, President, WFDB; Sanjay Kothari, Vice Chairman, KGK Group of Companies; and Ghanshyam Dholakia, MD, Harikrishna Exports Pvt. Ltd.

Stephane Fischler, President, Antwerp World Diamond Centre, presented the audience with a powerful presentation and advised them to prioritize quality over low cost methods. “Stop being obsessed by cheap labour, cheap software and cheap computers, cheap is expensive,” he said.

Ghanshyam Dholakia stressed on investing in our own manpower. He also advised the manufacturers not to get carried away by the quick money that could be made in the stock markets or real estate. “Diamonds are our business and we should devote ‘Tan, Mann and Dhan’ (physical and emotional attention and investment) to them alone”.

Innovation in Stagflation
The speakers and panelists for this session included Oded Edelman, Jamesallen.com; David A. Bouffard, VP, Signet Corporate Affairs; Jean Marc Lieberherr, CEO, Diamond Producers Association; Abdul Salam, Group Executive Director, Malabar Gold & Diamonds. The panel was moderated by Chaim Even Zohar, Author, Diamond Intelligence and Rajeev Mehta, CEO, Diamexon.

Edelman, CEO, James Allen, one of world’s rapidly growing online retailers of diamond jewellery made a presentation with an engaging video to attract more Millenial audiences to their website; the video garnered three million views within a couple of weeks since its launch.

Abdul Salam said that though times are changing and they are definitely looking at more sales through their online platform, the traditional brick and mortar model is something that works for them.

Rajeev Mehta, CEO, Diamexon, quoted some of the biggest spends on marketing by the likes of Pampers and Gillette and said that Apple surprisingly doesn’t figure in the list of top twenty companies with the biggest marketing budgets. He pointed out that if a product is good, it will speak for itself and marketing is not the only means to an end. “Tesla’s spend on marketing is $0,” he concluded.

New Realities of Diamond Financing
Panelists included Biju Patnaik of IndusInd, P.N. Prasad of SBI and Kurt Looyens of ABN AMRO, and Linus Koh of the Singapore Diamond Exchange. Diamond financing has always been an area of utmost importance and this time around, the panelists gave a fresh perspective on the same. Chaim Even Zohar set the tone by stating that ABN Amro made a decent, respectful exit.

Koh through his presentation explained how the concept of the exchange was giving way to new opportunities when it comes to transparency and is giving easier accessibility to finance, and stressed on the fact that the industry should understand that diamonds need to be also promoted as a safe and attractive investment.

The bankers in the panel discussed the issues dealingwith bankability and how the banks are once again gaining trust with the traders. According to Patnaik, there are plenty of finance options in the Indian market but the business owners must be more transparent in accounting with audited balance sheets etc.

Moderators Praveenshankar Pandya and Chaim Evan- Zohar spoke about the levels of finance available and the reason why small manufacturers find it harder to secure credit. Transactional costs because of the requirement of ECGC by the public sector banks were discussed as one of the main reasons. The panel agreed that the fact that there no finance schemes for the MSME sector needs to be addressed.

Bockstael gave an overview of the discussions within the KP. The issue was addressed from the perspective of the governments of the producing countries, with Maurice emphasizing on the need to ensure fair value to producers to maximise beneficiation and boost development. Zarouki said that value needs to be determined by costs incurred and the salability of the stones, and any attempt to standardize valuation could lead to commoditization and a loss of the emotional value attached to diamonds.

Ray said that given the country’s position in the value chain it could see that there was 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.

Diamond Certification
The panelists included Tom Moses of GIA, Ans Anthonis of HRD and Debbie Azar and Mark Gershburg of GSI. The central issue of the discussion was illegal mixing of natural and synthetic diamonds. The panelists made presentations on their labs, grading and testing equipment. As discussed, the only way forward was to work in unison with the manufacturers to stop the infiltration of synthetic diamonds in the pipeline.

PM Narendra Modi’s Address
The GJEPC hosted a grand gala dinner to celebrate its Golden Jubilee. It was attended by the various delegations and dignitaries from across the world. The audience was addressed by Prime Minister Narendra Modi through live video conferencing. Giving the opening address, Mr. Pandya said, “What we could not do in 40 years, the PM has managed to accomplish in one stroke.” “The demonetisation announced by him in November last year has led to the opening of thousands of bank accounts and the making of thousands of Pan cards.”

He requested the PM to intercede at a bilateral level with the Russian President in future meetings to repeal the duty on polished diamonds being imported into Russia from India. He said that no duty was being paid on the approximately US$ 5 billion worth of rough diamonds being imported into India from Russia.

Referring to the PM’s advice given earlier to do for jewellery what had been achieved by the diamond industry, Pandya requested for the Government’s support to create Jewellery Parks in various centres in the country. This, he said would make top-end infrastructure available to jewellery manufacturers. He pledged that the GJEPC would work towards making India a No. 1 source of jewellery by 2022.

Acknowledging the contribution the gem and jewellery industry has made towards the Indian economy, PM Modi said, “In December 2014 at the World Diamond Conference held in Delhi, I announced in the presence of the Russian President that we would set up a Special Notified Zone. That promise has been kept. The laws have been changed to allow the import and export of rough diamonds from the zone. And it has shown good results. Earlier, only 80-90 big merchants had the opportunity to source rough directly from miners, now some 3000 entrepreneurs including small and medium ones, have this privilege through the SNZ. About 244 days of viewings have been held. My idea is that India should not only be the largest diamond manufacturing centre but should become an International Trading Hub.”