More trouble hitting Antwerp's diamond industry
July 18, 19
This week another chapter was added to the troubles of the Belgian diamond industry and trade. On June 26, the Antwerp World Diamond Centre (AWCD) board basically voted to shutter the Scientific and Technical Research Center for Diamonds (WTOCD) in the Antwerp suburb of Lier. The next day, the board delegated AWDC's Chief Financial Officer to relay the board's decision to the general assembly of the WTOCD.
The Permanent Committee of the WTOCD, however, retained an Antwerp-based law firm, Van Houcke Advocaten, to instruct the AWDC to disavow the decisions taken by its board on June 26, with regard to the WTOCD.
According to a letter sent by Van Houcke Advocaten to the AWDC, the AWDC has announced that it would not finance the WTOCD's "mini-WOS" project -an automatic, grain-independent polishing venture that reportedly is one of the WTOCD's most exciting and promising flagship projects. Further, it will refuse to "execute further cash injections into the WTOCD allowing the WTOCD to meet its financial obligations till the end of 2019
Since its foundation in 1977, the financing of the WTOCD has been "highly dependent on the AWDC." For 2019, the WTOCD was allocated a core budget of €500,000, as well as "project-based financing, conditional on approval of a committee to be installed [and] royalties on equipment sold through HRD Antwerp."
The letter continues as follows: "I, therefore, formally instruct you to disavow or confirm said decisions within 48 hours. In case these decisions are not disavowed, the Permanent Committee of WTOCD will duly act in accordance with its legal responsibilities, at which point, the Permanent Committee cannot exclude that bankruptcy or liquidation proceedings will be opened over WTOCD. With this letter, which holds no detrimental recognition of any kind, my client chooses to reserve all rights in this matter."
What's next? Time will tell.
AWDC discontinues financial contribution to WTOCD
July 19, 2019: The Scientific and Technical Research Center for Diamond (WTOCD) can no longer count on the unrestricted financial support from the Antwerp World Diamond Centre (AWDC), the umbrella organization for the Antwerp diamond industry. "The current market situation has led us to take this decision," says Margaux Donckier, AWDC spokeswoman.
The WTOCD was established in 1977 as an independent research center in support of the Belgian diamond manufacturing sector. Over the years, the WTOCD has developed a range of devices used in the polishing, screening and grading of diamonds.
While it conducted no commercial activities, the WTOCD has always had the opportunity to diversify its financing. The AWDC hopes it will now do so quickly, given that it will not be able to continue its financial support in the future, considering the decline in trading and manufacturing activities.
"As a result of the high cost of labor in our country, almost the entirety of our diamond manufacturing has relocated abroad. This has put the WTOCD in a difficult situation," says Donckier. "The market for these high-quality machines in Antwerp continues to shrink. They are also too high-tech, and too expensive, for the majority of polishing units in low-wage countries."
In an attempt to bring the polishing industry back to Antwerp, the AWDC and the WTOCD for the last ten years have tried to improve its competitiveness and remedy the difficult situation by developing the FENIX, a revolutionary technology that fully automates the diamond-polishing process. "The technology has the potential to spark a revolution in diamond polishing, but at this point we recognize that additional investments are needed to ready the product for the market."
Unfortunately, given the current market situation, this is no longer feasible for the AWDC. However, the AWDC is now considering the options for making a fresh start. The AWDC will continue in the future to facilitate scientific and technological research.
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