The year 2011 started with a new leader at the Antwerp World Diamond Centre (AWDC), as Ari Epstein took over as Chief Executive Officer, Antwerp Facets writes. A lawyer by training, he takes on this new role after serving as Director of the Diamond Office since 2005 and acting as Deputy CEO for the past two years. We discuss the state of the Antwerp diamond sector, the position of the AWDC, and his new role as AWDC chief executive.
ANTWERP FACETS: How do you feel about taking over the management of the AWDC?
ARI EPSTEIN: This task is both a challenge and a privilege! Antwerp has led the world diamond industry for generations, and I see my role as leading the AWDC to maintain and enhance our leadership status in the next decade and beyond. Diamonds are an important sector for the Belgian economy, and the AWDC must strongly represent and position the industry both at home and around the world.
I wish to lead a mission by the AWDC to mobilise and coordinate all our various stakeholders. We need to take care of our responsibilities towards the local community, whilst at the same time strengthening Antwerp’s standing in the worldwide diamond industry.
ANTWERP FACETS: Tell us more about what the AWDC does?
ARI EPSTEIN: The AWDC is a truly dynamic organisation – we don’t just head the local industry, we are the facilitators of the diamond trade in Antwerp. AWDC is here to enable and increase good business for Antwerp and its diamond companies. The Diamond Office is at the core of our organisation – we are part of the import and export of every diamond that passes through Antwerp. We deal with every transaction with super-efficiency and the highest integrity, constantly streamlining the process to deliver customer satisfaction.
The AWDC is also the interface between the industry, the City of Antwerp, and the rest of the world. Whether organising conferences, trade fairs, or diplomatic visits, the aim of the AWDC is to professionally promote the best interests of Antwerp and diamonds.
ANTWERP FACETS: What qualities will keep Antwerp in its position as a diamond centre? What is critical?
ARI EPSTEIN: We are the world’s best; our sorters, valuers and traders are unrivalled, dealing with rough of absolutely all qualities. Testimony to this is the presence of the world’s leading producers in Antwerp with offices in our marketplace. We have a critical mass, with excellence in rough and polished trading, banking and technological know-how, and we strive to maintain our lead in all these areas.
Investors and entrepreneurs must be encouraged to do business in Antwerp. At the AWDC we intend to lead the way, showing integrity and transparency in all our dealings. We are working on new approaches and exciting projects to stimulate the diamond trade for Antwerp and the world.
ANTWERP FACETS: AWDC not only represents Antwerp to the world, but it represents the diamond sector in Belgium, at the local, regional and national levels. How do you approach that task?
ARI EPSTEIN: We need to explain clearly what we do and how we do it. We need to keep the mystique of diamonds but to remove some of the mystery about the industry. Our ‘street’ turns over $45 billion annually, with over 1,800 companies involved in a wide range of activities. External stakeholders need to understand the importance of what we do and the benefits we bring to the economy.
My approach will be to develop a clear and coherent strategy for the short, medium and long term future of our role in Antwerp, with a clear vision and targets for the AWDC.
ANTWERP FACETS: People outside Antwerp may not know very much about you. What, briefly, is your background in the diamond industry?
ARI EPSTEIN: I graduated from Antwerp University with a Master in Law. I started my professional career as a legal advisor in the private sector, focusing on international taxation and labour law. I then went on to specialise in international insurance and corporate law.
In 2005, I was invited to head the Diamond Office customs department at the Antwerp World Diamond Centre. Three years later, I was appointed Deputy Chief Executive Officer.
I witnessed massive shifts in the global diamond market and in Antwerp from a unique perspective. These events included the vertical integration policy brought about by De Beers, with the subsequent reorganisation of many diamond companies, especially in Antwerp. We also saw the onset of the global financial crisis, with its very significant effects on the diamond trade.
ANTWERP FACETS: Although the global financial crisis has passed and there appears to be an economic recovery underway, what do you see as the biggest challenges facing the Antwerp diamond sector?
ARI EPSTEIN: As the recovery gathers pace, I see our challenge as to increase our revenue share from an improving economy. We must keep investing in growth in order to retain our leadership position.
Many factors challenge our industry: changing consumer habits, competition from a more sophisticated luxury goods market, and the loss of De Beers in playing a “stewardship” role, to mention just a few. These all have the potential to diminish diamonds’ value proposition, leading to a squeeze on margins across the chain of distribution. We must embrace technology – it is a threat but also a great opportunity for our sector, whether through Internet trading or advances in manufacturing techniques.
We can only guarantee our leadership of the global diamond industry if our strengths remain relevant into the next decade. This will be possible if we innovate; creating fresh ideas and new market segments. Our goal at the AWDC is to open up new opportunities for Antwerp.
ANTWERP FACETS: The economic crisis inevitably exposed the financial weakness of small and medium-size companies, both in Antwerp and all other diamond centres. Are there steps that you believe can be taken to aid them since they play a critical role in the overall diamond sector?
ARI EPSTEIN: We must not lose sight of the fact that every large diamond company started small. Indeed, the long-term health of the diamond business is greatly dependent on its ability to attract young people, who with hard work, innovation and a will to succeed can find their place in the industry.
The continued viability of small and medium-sized diamond companies is not only desirable, it is absolutely necessary. Historically, we have seen the diamond business steer its way through periodic downturns because of the flexibility shown by smaller operations, with their ability to adapt more easily to changing market conditions.
The challenges confronting smaller companies in our modern business environment are considerable. The reorganisation of the rough diamond sector favours larger firms with more capital resources, and the demand that firms become more involved in the downstream markets weighs more heavily on companies with limited capacities.
On the other hand, there is much that can be done. New technology and particularly the Internet have levelled the playing field. Today, smaller companies can operate internationally, with an ease of access that was once the preserve of the largest firms.
The AWDC, in both its structure and operation, is increasingly attuned to the demands of smaller and medium sized firms. Indeed, we instituted reforms some years ago in part to guarantee that smaller companies are properly represented on our board of directors and professional committees.
Many of our services are designed to provide opportunities for smaller firms to do things that otherwise might be prohibitively expensive, such as our support in organising trade show representation. The AWDC has undertaken a range of programmes that are geared towards enabling Antwerp-based companies to target the international market. Larger companies do not always need our assistance, but smaller operations - which make up the grassroots of our industry - most certainly do.
ANTWERP FACETS: Are there particular countries or regions that you believe the Antwerp diamond sector needs to concentrate on more? For example, your predecessor spoke of the steps he took to maintain and strengthen relations with Russia and China.
ARI EPSTEIN: We are very excited about new initiatives in developing markets, creating partnerships and strategic alliances. Our activities in building diamond markets and consumer confidence in China is well documented, with our presence at the Shanghai World Expo being a great success. Although the USA is still a major consumer market, other important regions are emerging, with increasing purchasing power and an appetite for luxury that must be nurtured.
ANTWERP FACETS: In looking to the future, are we able to think outside of the box? Are there areas in which growth may come that were not immediately obvious beforehand?
ARI EPSTEIN: We must revisit our attitude towards the manufacturing sector. Antwerp must look to create a new competitive space for its niche manufacturing industry. Automation of local factories, employing the latest cutting technology, could be a potential model for growing our local manufacturing sector.
To make this possible, we must keep young people involved in our industry. A programme encouraging the best young talent is critical to enduring success. Young people must be empowered and attracted to the diamond world. AWDC will do all it can to ensure the next generation strives to join us, including at the highest echelons of management and entrepreneurship.
We will be looking for new pathways to profit, examining the role models of other sectors, whether through design, innovation, expertise and entrepreneurship whole new segments have been created.
I recognise the huge strength and resource that Antwerp possesses, whether in terms of people, skills, technology or capital. We are a successful, diverse, multi-cultural community and I want to use that advantage to position Antwerp at the heart of the international diamond and luxury market.
