Calls For Joint Generic Diamond Advertising At 3rd Rough Diamond Conference

Fischer took the opportunity to apologize to De Beers Managing Director Gareth Penny for rejecting his previous call for wider participation market participation in generic diamond advertising. He followed that by calling for broader support in this effort.

Chaim Even-Zohar at the opening of the first session told listeners that the Big Bang has taken place, and that we are now in a demand-driven market where a sizable stock overhang exists.

The first speaker, IDI President Moti Ganz, said that one of the industry’s truths – that there is a shortage in rough – is not true, claiming that there is a total of $5-7 billion in polished stocks stored in the pipeline. “Chasing the rough pushes up its price,” he said, “and then we provide polished on memo to the retailers. Manufacturers are financing the entire diamond industry!” He warned the producing countries that hurting the manufacturers will hurt them as well.

Criticizing tenders and commoditization of diamonds, he said that diamonds have to be marketed as a luxury item only. Finally, Ganz called on the industry to invest in generic advertising, suggesting that the producer countries allocate 3 percent of their diamond income to advertising.

Following this, De Beers’ Penny argued that big ideas drive demand. Among the 13 current challenges that he mentioned, Penny mentioned that while demand for diamonds rises, few new mines are being discovered.

Downstream, rising bank debts didn’t decline in 2007 despite the decrease in rough and polished stocks, Penny said, contradicting the assertions of previous speakers. Retail, he added, is the biggest challenge, urging listeners to shift the fight to that field, rather than within the industry.

The industry should improve retail and marketing, for instance in India and China. Penny, too, called for others to carry some of the generic advertising burden, and suggested abandoning the U.S. dollar as the trade’s currency, suggesting that such a move will energize the industry.

Robert Ganniott of Harry Winston Diamonds told listeners that the company's growth strategy is to create limited, hand-made, items and new collections, cautiously growing their watch offerings. Answering a question by Chaim Even-Zohar, Ganniott did not reject the option of purchasing Rio Tinto’s 60 percent hold of Diavik, revealing that the two have a right of first refusal agreement between them.

An especially short presentation was given by Alrosa President Sergey Vybornov who said Alrosa has a known diamond reserve of $109.3 billion that should last for about 35 years.

Adonis Pouroulis, Chairman of Petra Diamonds, revealed that their strategy is to combine to exploration, mining and polishing, the three pillars of Petra, as he called it. Polishing will allow the company to create a story behind each diamond – where it was mined and how many people it supported.