Ari Epstein, CEO of the Antwerp World Diamond Centre (AWDC), dwelled on the results of the past year and the current situation in the diamond market in his interview to Rough&Polished. He also shared his view of the fourth edition of the Antwerp Diamond Trade Fair.
How do you assess the results of the past year for the global diamond industry?
We don’t have access to figures of the global diamond industry, but we can say something about Antwerp and conclude we had a very successful year. We are still the force in the global diamond trade. Despite the economic difficulties that we've seen in various sectors of the world economy, Antwerp performed remarkably well in 2012. While 2011 was a record year for Antwerp's diamond sector, our diamond import and export results were only slightly lower than the previous year.
Do you have any concerns about the current year?
Obviously the economic difficulties and challenges for our industry will remain a concern in 2013. However, we can conclude from the results of the past few years that the diamond industry is very resilient compared to other industries and we have hope that the global crisis will start to diminish slowly.
What are the priorities for the Antwerp diamond business?
Almost a year ago we launched the Antwerp Diamond Master Plan. It is clear that this plan has not merely been a matter of window dressing, but a tangible plan that helps us to consolidate Antwerp’s leading position in the international diamond trade. We launched the Antwerp Tender Facility this year. It is an enormous success. It is attracting significant interest from diamond producers and miners in general. Also small and medium-size diamond miners are very interested. They consider Antwerp as a preferred channel for the sale and distribution of their rough diamonds, particularly because of the fully transparent and well-regulated trading procedures we uphold here. (See answer next question) In this year, we will also continue to reinforce our ties with two of Antwerp’s most important partners; Russia and China.
Do you share the opinion that "impure" diamonds continue to flow to Antwerp?
Please clarify what you mean by ‘impure’ diamonds. I can only repeat that Antwerp is subjected to probably the strictest legislation concerning the implementation of the Kimberley Process and anti-money laundering requirements, we apply a zero-tolerance policy.
How do you assess the effectiveness of the Kimberley Process?
Antwerp has played an instrumental role in the development of the KP principles. We uphold the strictest legislation concerning the implementation of the Kimberley Process and anti-money laundering requirements in the world. This is proving to be one of the strongest sales arguments of Antwerp in the years to come. Antwerp can deliver the full transparency that publicly listed companies need today and jewellery brands and consumers are looking for. The presence of “in house” customs clearance, including physical inspection at the Diamond Office, is a very important asset in Antwerp’s unrivalled reputation.
Is there any threat to global market from synthetic diamonds?
No. We see that synthetic diamonds are still predominantly targeted at industrial use, and much less for gem quality. In addition to that, the Bain Study – Lifting the veil of mystery, developed in cooperation with AWDC, indicates that consumers do not regard lab grown gem quality diamonds equal to their natural counterpart, partly because of the intrinsic, emotional value a natural diamond carries within itself. Evidently, synthetic diamonds are traded in Antwerp, but in small amounts. The share of synthetic diamonds of the total diamond trade in Antwerp is 0,00002%.
Do you think current diamond prices are fair?
We believe that one of the key arguments to do business in Antwerp is the fact that Antwerp has the critical mass necessary to absorb productions without negatively influencing the market. Antwerp also has the people with the skills needed to fine tune the assortments to the market needs, thereby guaranteeing the best possible return for the seller, within the shortest possible delays.
When, in your opinion, rough diamonds prices will stabilize?
I think that the price of diamonds will continue to show a steady, consistent rise in the years to come, as they have done over the past decade. Driving factors are the scarcity of the product, a rising demand worldwide (specifically in the BRIC countries) and the increased interest in diamonds as an investment product.
How do you evaluate the activities of the world leading producers of diamonds and what do you expect from them in 2013, in particular from ALROSA?
For the past three years, Alrosa, the world's largest supplier of rough diamonds and Antwerp, the prime diamond hub for the global rough trade, have been committed to a long-term agreement of rough supply. From a total of twenty-three Long-Term Customers, no less than thirteen diamond companies are based in Antwerp, underscoring the strong and mutually beneficial ties between the Russian mining giant and Antwerp.
What are your expectations from the upcoming Antwerp Diamond fair?
I am very pleased that we are beginning the year with such a prestigious event as the Antwerp Diamond Trade Fair (ADTF). The ADTF is powered by the AWDC as chief sponsor and we're proud of the initiative of Antwerp's two leading bourses – the Antwerp Diamond Bourse and the Diamond Club of Antwerp.
Now in its fourth year, I think it is safe to say the Antwerp Diamond Trade Fair has grown beyond infancy, both in terms of size and scope; the amount of exhibitors has more than doubled, and so has the number of visitors and companies that are attending, representing a wide array of important polished markets all over the world; China, Russia, the America's and the Middle East.
The success of the ADTF lies in the combination of Antwerp’s strengths: we are home to the largest concentration of polished suppliers in the industry; guaranteeing competitive prices; carefully managed supply chains and stocks; reliability of tailor-made supply and predictability of assortments. It is an event that is by far superior to any other in the world - hosting Antwerp's top diamond companies and their exquisite goods - in a setting that mirrors our notorious historical authority in the polished diamond market.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
