De Beers Execs Urge Mix of Caution and Optimism for Upcoming Year

Those that recognize and adapt will be the winners -De Beers MD Penny

De Beers Chairmen Nicky Oppenheimer has stated that staying “focused” is key in order to achieve great promise in the face of uncertainty during the next 12 months. Oppenhemier presented his case for optimism at the Diamond Trading Company (DTC) Sightholder reception on Tuesday night in London.

Oppenheimer hosted the reception, where he, Gareth Penny, De Beers Group managing director and Varda Shine, DTC's managing director, each delivered their remarks.

"Although we find ourselves, here at the beginning of a new year, in relatively better shape than we had feared, the months ahead still hold too many uncertainties for us to relax and drop our guard," Oppenheimer said. "Economic instability, lack of liquidity, consumer confidence - all of these challenges and some we haven't yet seen will continue to require from us discipline and courage."

Penny focused his remarks on the "new normal" state of the industry. He suggested that the response of businesses since the economic collapse at the end of 2008 could continue to offer a useful template for managing operations in 2010.

"The question I'm most often asked these days by people in the diamond business and beyond is 'How long will the recovery take?'" Penny said. "To me, though, this is the wrong question. The real question is, 'Where will the recovery take us?'"

“Now, as the pace of change accelerates and brings with it a new understanding of what is ‘normal,’ unparalleled opportunities are being created. Those that recognize and adapt to this change will be the winners and will define the future of our industry for years to come. We look forward to taking this journey with each of you, as your partner,” he concluded.

In her speech, Shine said while the industry was efficient in responding to the downturn, companies must still proceed with caution.

"It is unrealistic to expect consumer demand for diamond jewelry to return to pre-downturn levels during the course of 2010 and it is more likely to be a year of transition, as the world catches its breath," Shine said. "It appears that consumers are now functioning with a new normal, spending at levels between the highs of mid-2008 and the lows of 2009. The diamond industry needs to find a similar balance in 2010 and any business returning its operations to 100 percent capacity this year may therefore find that they are substantially overproducing."

“It’s going to be another busy year ahead, full of challenges, but I’m very confident in our product, our people and our passion and I know that we have a hugely exciting ‘diamond decade’ ahead of us.”