Mark Boston is the Chairman of H. Goldie & Company Limited, the oldest and most established diamond brokers in the world diamond industry. Mark Boston’s now over 40 year long voyage of discovery into the fascinating and often very challenging world of the international diamond business, started at the age of seventeen in 1962, when Cedric Goldie invited him to become a trainee rough diamond broker in the company founded by his father, Hugo Goldie in 1910.
Mark Boston is a well known figure and held in high esteem in India, with the diamond industry members looking up to him as a friend, philosopher and guide; and more importantly as a well wisher of the Indian industry.
Mark Boston’s latest major project, as yet unfulfilled, is to promote the publication of a book which will do justice to the largely untold, but truly remarkable story of the rebirth of India’s diamond industry, undoubtedly one of India’s greatest post-independence economic success stories. This is now available as an e-book from Amazon.
In his interview to Aruna Gaitonde, our correspondent in Mumbai, he talks about the problems now facing the diamond industry in India and worldwide.
Your views on the current global diamond industry... how do you see it panning out in the next few years, taking into consideration the changing times, ethical business outlook, consumer preferences , world economy, ecological concerns, etc.?
One of the things that make me most confident about the diamond industry is the fact that it has a very strong and resilient core (the Indian industry) aligned with all the other diamond centres giving it the confidence to address problems and changes which affect our industry. If this was to change and the industry was to become parochial and focused solely on a particular agenda (such as beneficiation in Africa) then I think this would change the industry dynamic from a global to a local one which over a longer period would be harmful for the industry’s global development. The leading players in today’s industry are all global players and that is the perspective that informs their decisions and drives the business forward. Those who buy the most substantial quantities of rough have to have effective marketing and downstream knowledge of consumer demand in order to thrive.
What steps do you think the mining companies should take now to stabilize the diamond markets in consumer countries? Do you think the current level of rough prices corresponds to polished prices?
The current difficulties in the imbalance between rough and polished prices can be very much attributed to the Rupee/Dollar exchange rate volatility which has affected considerably the confidence of the Indian industry in the forward buying which is very much their usual mode. While the mining companies have already adjusted, and may have to adjust further, it wouldn’t be reasonable to place the whole burden of the current situation on the mining companies’ shoulders. The responsibility for coming through this situation has to be borne by all stakeholders and it is hoped that the Indian government will energetically address the issues that have led to the financial demise of the Rupee in the first place.
Having been associated with the Indian diamond industry for decades, what changes have you noticed over the years, in terms of diamond/jewellery business in India? Of late, the Indian diamond manufacturers (DTC Sight Holders as well as non-Sight Holders) have been complaining about high rough prices. Your comments.
It never ceases to amaze me how the Indian industry has evolved and is always setting itself new challenges and targets which it achieves through sheer determination and hard work. Much of the growth of the Indian industry has been organic in the sense that once the Indian diamond manufacturing industry had reached maturity, the Indian diamond jewellery industry (which is now so important) grew out of that success. The industry’s downstream focus has been hugely important in developing the Indian domestic market and those of many other countries. At the same time India’s diamond jewellery, which started off as low-cost promotional product, new extends to medium to high-end jewellery and the design and creativity of the industry is now the major driver of its success rather than price alone. Indian jewellery manufacturers not only know and satisfy the demands of the Indian domestic market but also how to drive consumer demand across all markets. This trend is likely to increase as Indian manufacturers seek out new opportunities in emerging economies. Finally, rough and polished prices are quite definitely the major issue at present but I am sure that if all industry partners behave responsibly the industry will work its way through the current problems and go back to a more predictable and sustainable path.
Your assessment of the Indian diamond industry at present. What are the main challenges faced by the industry? What are suggestions for bringing stability back into the industry?
It is clearly everybody’s responsibility to keep their business operations viable so that the necessary adjustments can be made to restore the confidence and liquidity which has always been the defining characteristic of the Indian industry. Undoubtedly the banks need to play a major role in this and they and the mining houses also bear the responsibility to make sure that they are supplying the right clients, those that add value, stability and direction.
Indian diamond cutters seem to be facing various difficulties… rough shortage, depreciation of the Rupee against the U.S. Dollar, etc. With many DTC Sight Holders (SHs) as your clients, what is your assessment of the Indian diamond cutting sector now? Are the SHs too facing problems or is it only the small and medium sized units in trouble?
The Sightholders are arguably more affected than the small to medium sized companies because their credit lines have been curtailed by the Rupee’s depreciation which also affects their business more than the smaller units who buy and sell in Rupees.
It is said that more than 80% of the world's rough output is being cut in India today. But with other producing countries focusing on setting up manufacturing units in their own country, do you think the Indian diamond cutting industry’s prospects are open for future growth?
I believe the Indian industry has a critical mass and mastery of the diamond business that others simply can’t replicate and also, of course, has a growingly important domestic market which the industry itself has created and nurtured. The only thing that could impede the growth of the industry would be reduced access to the rough supply that up till now has supported it. However, this would be so much against the interests of all concerned that one would doubt that any mining companies would seek to do it. At the end of the day manufacturing always goes to those countries or locations who do the best job in not only manufacturing but marketing also and the Indian industry not only has the experience and focus I referred to previously but also a ‘diaspora’ of global interconnectivity, which again would be very difficult for any challengers to match.
The last DTC Sight saw goods being refused by SHs. Now news is that De Beers has reduced prices of rough, albeit by a small percentage. Do you feel further price reduction is in the offing or is this just a step by De Beers to calm the nerves of the industry, for the present?
I feel that De Beers wanted to be seen to be supportive and understanding of the industry’s problems and while they no longer claim or wish to be the custodians of the entire industry they continue to be the producer all the others look to, so they have to strike the right balance in protecting prices and the stock of their customers without losing sales through being overly inflexible.
With De Beers shifting rough diamond sales operations from London to Gaborone, how does it affect (if at all) the Indian Sight Holders? And do you see Dubai becoming the ‘new Antwerp’ in the future, given the massive activity seen there of late?
In my view the shift from London to Gaborone should go a long way to satisfying the Botswana Government’s legitimate aim to create a diamond hub and feel the benefits closer to home. However, the realities of the industry are such that it would be very mistaken and misguided to promote the Botswana cutting industry by curtailing supplies of rough to India. Win/win situations have to be based on both parties recognizing and respecting the contribution that they each make to the success of each other.
Aruna Gaitonde, Rough&Polished, Mumbai
