Two heavy weights spoke on the second day of the World Diamond Congress in Tel Aviv, and they were worlds apart. De Beers Managing Director Gareth Penny shared his philosophy on how to drive diamond jewelry sales, while Israeli diamond magnate Lev Leviev lamented the bind in which the diamond manufacturers work these days.

 

The differences were clear, though so were the similarities. Penny and Leviev delivered forceful speeches, both receive great interest in the diamond industry, and both are carefully listened too. They differ in an interesting way. The aloof and distant Leviev easily wins the crowd with his plain speaking manner while De Beers is always puzzled by their unpopularity in the market despite their efforts to bring themselves closer.

 

The open session started with a short speech by Bank Leumi’s Rakefet Rosak-Aminach, head of the business division, who said that the bank believes in the diamond industry, noting (to the surprise of some listeners) that it is the biggest financier of the diamond industry in Israel – most believe the biggest financier is Union Bank- and the third largest in the world after ABN Amro and the Diamond Bank of Antwerp.

 

Rosak-Aminach was followed by Zeev Leshem of Sarin Technologies who outlined their diamond equipment.

 

When Leviev took the stand, the audience was not disappointed as he voiced the concerns of the diamond manufacturers, currently under duress. He accused diamond miners of not trusting their clients enough to give them credit. “They don’t ask for cash payment a day in advance, but four days before they get the rough. What, are they afraid the manufacturers will change their minds?” he said, to which the audience burst into laughter.

 

According to Leviev, manufacturers are those that are saving the industry, supporting the producers on one end, and the retailers on the other. “The majors [the big jewelry retailers], who were bankrupt just a few years ago, now demand to know from the manufacturer how much gold is in the jewelry item, the cost of labor, and the cost of the diamonds, then tell you how much profit you can make, and then take the jewelry on consignment. But that is not enough, their ‘chutzpa’ [nerve] is when they return the unsold items, they expect the manufacturer to also take goods from other manufacturers – after all, you don’t want to loose your contract with the retailer,” he said to the cheering crowed.

 

He scolded the jewelry retailers for their insistence on a limited range of colors - HIJ - for their programs. “No wonder the prices of rough are going up. Everybody is running to get the same goods.”

 

After clearly pointing his arrows at De Beers and Rio Tinto, being careful not to mention their names and adding that all are equally to blame, he said that to resolve the problems in today’s diamond market, producers should supply manufacturers with credit that will allow them to finance their operations. (See article “Leviev: Miners Should Give Manufacturers Breathing Room with Credit” here)

 

GIA’s Tom Moses followed, describing recent efforts by the grading lab, including a decision to change the way the HPHT is noted on their certificates. (Expanded coverage here).

 

World Diamond Council President Eli Izhakoff discussed recent issues regarding the impending ‘Blood Diamond’ movie, due to be released in November. Efforts to block the negative impact the movie might have on seasonal jewelry purchases include retailer education, a soon to be launched consumer website, and negotiations with movie studio Warner to clarify that the situation depicted in the movie is now over.

 

Arriving late due to a flight delay, Be Beers Managing Director Gareth Penny took to the stage with many waiting to hear a rebuttal to Leviev’s speech. However, Penney only said in the opening that rough diamonds are in a downturn, calling it market corrections.

 

Instead, Penny choose to speak about De Beers “Turning diamond dreams into lasting realities”, saying that this is the purpose of the De Beers family of companies.

 

Penny called on the industry to adopt change, noting that in Chinese the word change is made up of two characters: danger and opportunity. “We need to be selling the Diamond Dream,” he said, that is why people buy diamonds. “Maintaining the diamond dream is crucial for the future of the diamond industry and fundamental to its growth.”

 

We live in a world where McDonalds has to explain to an enquiry committee salt content in a hamburger because people are complaining about being fat after eating 20 hamburgers a day, Penny said. Everyone in the diamond industry is required to behave responsibly.

 

After referring to the DiCaprio movie, he returned to ‘turning diamond dreams into lasting realities’. He translated that statement into a set of values for the company:

• Be passionate          
• Pull together
• Build trust
• Show we care
• Shape the future

In a reply to a question from the audience Penny said that the position of diamonds needs to be constantly nourished, concluding “lets work together, let’s pull together.” (Click here for an executive summary of Penny’s keynote speech).